Wednesday, February 17, 2010

SOROS

Far from selling gold as some misunderstood from his comments at the World Economic Forum, George Soros has been buying gold as ArabianMoney suspected. In a filing with the US Securities and Exchange Commission, Soros Fund Management owned 6.2 million shares of SPDR Gold Trust, the popular GLD exchange traded fund.



At the Davos World Economic Forum the famous hedge fund manager reckoned to have made a billion from the devaluation of sterling in late 1992 refused to say whether he was buying gold. But he did describe gold as the ‘ultimate asset bubble’ leaving some headlines concluding Mr. Soros a seller of the yellow metal.



Gold bug



Instead he emerges as a born-again gold bug with a hoard valued at $663 million at the end of 2009. Mr. Soros therefore joins John Paulson among the hedge fund managers to undergo a conversion to gold.



As ArabianMoney thought at the time Mr. Soros might well hold that gold was the ‘ultimate bubble’ but not necessarily consider it to be one just yet. He is therefore buying in advance of this bubble and putting his money where his logic takes him.



Under the principle of reflexivity that Mr. Soros has long propounded the actions of players in a market place are self-fulfilling to some extent and compound. That will certainly need to happen if gold is to truly become a bubble asset class.



Good timing



At present the gold trend line is a neat upward slope and shows none of the parabolic behaviour that would normally indicate a price spike. The one gorilla in the front room right now is an overdue stock market correction that would surely also take gold prices down as it did in late 2008 by 30 per cent.



To second-guess Mr. Soros again, and with a little more confidence having gotten his Davos statement right, then he ought to be a buyer on weakness. Building up a sizeable position in any commodity at reasonable prices is never easy, and two-thirds of a billion dollars is already no small holding.



Mr. Soros remains among the biggest market speculators in the world


http://news.goldseek.com/PeterCooper/1266416176.php

27 comments:

  1. Speaking of gold, we're going to be jumping on the sprott ipo (PHYS) in our non-retirement account. Supposedly closed and does not have the restriction of being taxed as a colectible as GLD does. Wondering if anyone heard anything good or bad about this before we go in?

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  2. Homer,

    Any decision you make is going to be just fine, heheee!

    palmer

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  3. Hey Joe - no decision freeze here unlike last week when I tried to squeeze a little more out of the miners. ;-)

    I'm going to get details tomorrow but it sounds like a no lose. Backed by physical gold, cap gains and can redeem shares for physical gold (here's where I really want details). Just trying to figure out where the catch(es) are.

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  4. I noticed an article on Yahoo end of day related to your post that Soros is continuing to add to gold...663 million, he would not be that heavy in it without conviction.
    Homer, no experience with your question so not ignoring, just no value to add from me on that question.
    Tough trading market today. I'll be okay, just need to set on an ice bag for awhile. - Analyze.

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  5. NP Analyze, appreciate it. Hope the ice bag feels good and I am positive you will be okay.

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  6. Homer,

    I miss your posts, you used to post more often, how is life treating you? Any plan for retirement?

    palmer

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  7. EWI tonight....Gold] countertrend rally has carried the percentage of gold bulls from 13% on February 8 to 45% yesterday, relieving a pessimistic extreme. Prices rose from $1043.80 on February 5 to a high today at $1127.91. There are two valid ways to interpret the near-term subdivisions. One way places gold at the top of an expanded flat upward correction that started at $1073.85 on January 28. In this scenario, prices should be at the forefront of the next phase of decline. A selloff beneath $1098.35 will signal the onset of the next leg lower. Another way to interpret price behavior is to consider a larger upward expanded flat (see EWP, p.46) underway, one that started at $1074 on December 22. If this scenario is unfolding, gold will continue up to just above $1162.45, the January 11 high. The push will complete the upward flat pattern and lead directly to a strong third-wave decline. We listed this labeling under "Alt:" on the chart. Last Friday we said we'd move this latter view to top status with today's rally, but we are for now keeping it as the alternate because prices are again bumping up beneath the broken uptrend line from October 2008, which has previously acted as resistance. In addition, gold pushed above the February 3 high ($1126.20) by a few ticks intraday, unconfirmed by silver, and then sold off toward the close, creating a small inter-market non-confirmation. This behavior favors the first scenario described above. Both interpretations should eventually result in gold declining into the $950-$970 area, the apex of the wave (B) triangle, which remains the next downside target within Primary wave C (circle).
    Texasblondie...

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  8. EWI...da rest of the story...The shift from extreme pessimism to neutral is just as swift in [Silver] and even more dramatic. In just 7 trading days, silver bulls, as measured in the Daily Sentiment Index (trade-futures.com), have gone from just 8% at the February 5 low to 49% at yesterday's close. So the countertrend push from $14.65 (Feb. 5) has "worked off" the pessimistic extreme. Spot prices came up to the 38.2% retracement of the decline from January 11 at $18.92 and then reversed lower. A decline beneath $15.75, a small degree previous first wave high, will be the initial signal that the next leg down to new lows is already underway. Breaking $15.19 will confirm it. The next potential downside target is $13.75-$13.94. Any rise above today's $16.36 high will mean that the next phase of selling is delayed by another day or so.
    TXB

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  9. Analyze,

    How was your day, did you trade?

    joe

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  10. Joe, I traded but in retrospect wish I had not lol. Greed overrode reason, had a position reverse on me that I was being aggressive in, too fast to even react to. Got out but still got dinged. Never works to try to thread the needle on a trade on one of these days where GS is all over things to prop it up. Live and learn I guess.
    BTW I was looking last night at that huge bet TXB mentioned a week or more ago on SMN, it looks like the person putting in the 5M still left most of it on, but they took a 80% haircut so far. Dangerous times, especially to get over-zealous to hit a big trade. For today I should have stayed with the game plan that has been working. Never seems to work to try other areas, humbling experience to get ponzi'd after thinking I would not get hit. - Analyze.

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  11. Analyze,

    5M bet on SMN? DANG!

    palmer

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  12. That's called being on the wrong end of it lol. It still feels like another wave down is needed for the moves up to be "real", kind of similar to what we posted awhile ago, they can float it up on fumes here, but it feels like it should have gone down to 1025. - Analyze.

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  13. Hey Joe - got another 10 years or so for retirement, more if everything goes south. ;-) You know me, cautious and low risk is the way for me, it's tough to be a swing trader/bottom feeder in this market though and I can't follow day to day anymore cause there's just too much going on at work (good thing). My 401K account is a goof, standard Mutual Fund offerings as with any big corp, rules on excessive trading, 30 day rule, I'm handcuffed all the way so its mostly cash and I dip in and out of a pimco commodity fund. Wife's retirement account is where we play but are still much too passive/reticent and still way too exposed. I think I'll get a little more aggressive this year, maybe spend some time on the weekends to map out some positions in advance.

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  14. For what it is worth Soros is also a big share holder in BPZ a Peruvian base oil and gas company about 9 million shares.

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  15. Kli,

    In view of corrections anticipated in gold and silver mentioned in Texasblondie's posts, what strategy are you employing with regard to your mining stocks?

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  16. I have been looking online where to buy some gold and silver. Does anyone have a good place? I have heard some stuff from Howard Ruff and he thinks holding both is a good idea and I tend to agree. After that what size of coinage. Just not sure. Have an idea on what I want to do but want to see what others think.
    Jeff
    Also, I'm sorry about the other blog that you must have taken down. I just have real passion about that subject and love a good debate. I may have been out of line and I am sorry.

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  17. Jeff I luv it too but this blog is followed by some people that don't want it...so I try to avoid it also...... Anon Tex Blond may be right with EW BUT and a BIG but You gotta have a position on the miners and NOW. Add heavy if they crash the miners....

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  18. Oh I do have a position in AUY and GDX. Trade in and out of GDXJ and GFI. Do not like the big miners by themselve in an ETF I am OK with it. On any pull back to the breakout trend line. I think is a good place to add to positions. I would add both gld slv and physicals as well along with miners. I need to look at other instead of using GDX and GDXJ.
    Jeff

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  19. I looking for some opinions on this one, I am having a hard time on which way to lean. On one hand I see the EW's reasoning why gold and the stock market will get absolutly clobbered, But I also see why a lot of you at this sight say gold will go straight up. I am really torn. I guess the real question is will gold go up and the stock market go way down, becuase if that happens like I said earlier be some where else.

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  20. www.tulving.com works for me

    bought several times from them. no issues. fast everything.

    -C

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  21. Guys, just so you know, I don't know if EWI will be right(I do ok with the service)...I do follow and trade some based on the updates(3Xs a week) and then some. I trade more based on candlesticks, other TAs. Just so you guys know, I hold physical gold and silver...have for years...including antique silver wares. I am a long term gold/silver bull...silver more so. I held the miners long from the bottom...just not holding them for now, as I believe we will see a further correction in the PMs...copper another story...I am shorting it...buying puts on FCX and PCU(large position on this one)(based on fundies) I post EWI sometimes for your added consideration. TexasBlondie :)

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  22. I agree copper is broke. I am short FCX right now and will be that way for a while I suspect. I have gotten my head handed to me the last few days but I do have long positions in certain stocks that I really like long term: PEP PG KFT ABT AUY GDX and have been selling calls against positions
    Jeff

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  23. Oh I forgot about JNJ MCD PFE and PHO
    Jeff

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  24. jeff......By and large most of the traders on this board do NOT think gold is straight up .....to the contrary many of us have shorted it recently....BUT there are many that read this that are not traders.....they must have positions in the miners ....favorites are ANV EGO JAG GG.....SLW SSRI oh forgot my GFI....I won't give a percentage I own only that I have a big piece of cash waiting just in case and to trade

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  25. one more item.....gold is a scary animal to short....you could literally wake up and have it up 500 dollars or more overnite....do some studying there are a couple of events that could precipitate that move...so be aware when someone is shorting gold..(except Joe..the mthrfker is a whale and respects golds danger) I worry ...thats all. BTW I tried shorting gold three times 2mo ago and swore never again....but thats me

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  26. All,

    The best course of action for most of you in regard to Gold miners is to have some core position and then hope for meaningful retracement so you can add to your positions. Trying to time the miners or shorting Gold without having extensive expertise is not advisable. During deflationary period, the BEST time to make serious money from Gold miners is when you start noticing the decoupling relationship between Gold & the Dollar ( both going up). I have mentioned this before and great example of it was after October of 2008 when Gold and dollar started to go up and broke the inverse relationship, that is the INDICATOR of miners bottoming.

    joe

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  27. "Utlimate bubble" as in the last bubble of his lifetime?!? Soros is an old man. This may well be his last great gamble.

    But what puzzles me is why all these major speculators are advertising their positions?!? Soros and John Paulson among them. What's up with that? Makes me nervous. I do not recall John Paulson advertising his mortgage shorts or was I just not listening at the time?

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