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George Soros' $2.0 billion Bet on A Stock Market Collapse

September 04, 2014 | About:

cody56

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George Soros' (Trades, Portfolio) company, Soros Fund Management, has increased its bear call bet or Hedging is portfolio through the S&P 500 ETF(SPY). Soros Fund Management put options on the (SPY) ETF has increased a wopping 605% from the previous quarter. The man who broke the bank of England in 1992 when he shorted the British pound for a net gain of $2 billion. He forced the bank of England to devalued the currency.

George Soros' (Trades, Portfolio) put option (SPY) ETF

Soros Fund Management put options on the (SPY) ETF is now the largest holding in the company's portfolio. Soros Management increased the company's put position from 1.6 million to 11.29 million, that equivalent of going from $299 million to $2.2 billion in notional value. Normally, a large investment firm will place hedge positions whether long or short to mitigate risk. But the 605% increase from the previous quarter and total position is the largest in Soros' portfolio. The put position went from 3.0% of the portfolio to 16.7% of the portfolio over the previous quarter. That massive jump from one quarter to the next clearly shows that George Soros is making a bearish call on the S&P 500 by using put options. Soros Fund Management alson increased the firms S&P 500 ETF (SPY) calls to 2.1 million share, to now 3.1% of the portfolio. That up from the previous quarter of 0.7% or a 405% increased over one quarter. A 605% increase his is put position and a 405% on is call position in just one quarter, kinda says that George Soros (Trades, Portfolio) is making a bearish bet against the market with a small hedge as well. Soros did add to is positions in Facebook (FB) and Apple (AAPL) from the previous quarter including adding a 185 new positions as well.

Increasing his holdings In gold companies

He also doubled down on gold mining ETF and added plenty of gold-based companies to his portfolio. Soros' position in the Market Vectors Gold Miners ETF (GDX) increased from 1.16 million in the first quarter to 2.05 million now, now stands at $54 million.

S&P 500 Overvalued or Not?

  • Trading at all-time highs
  • Historic average P/E 15.15 and currently trading at 19x earnings.
  • Is 22.3% overvalued based on its 134 year historic average of 15x?
  • Based on CAPE the S&P 500 is selling at 26.11x earnings.
  • CAPE 134 Average is 16x earnings, that means the S&P 500 is overvalued by 57%.
  • S&P dividend yield is currently 1.85% and its 134 year historic average is 4.32%

It clear that the S&P 500 is over valued and that its also clear based on George Soros (Trades, Portfolio) actions in his portfolio from put option to increasing is gold company holds that he going bearish. Soros is legendary for his bearish calls and backing those calls with his money and reaping massive financial rewards from it. Is George Soros (Trades, Portfolio) Hedging his portfolio as some in the financial media is saying or is he setting up for massive profits from betting against the marketl?

George Soros Full Second Quater 13F Filing

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 13F

FORM 13F INFORMATION TABLE
OMB APPROVAL
OMB Number: 3235-0006
Expires: July 31, 2015
Estimated average burden
hours per response: 23.8

COLUMN 1 COLUMN 2 COLUMN 3 COLUMN 4 COLUMN 5 COLUMN 6 COLUMN 7 COLUMN 8
VALUE SHRS OR SH/ PUT/ INVESTMENT OTHER VOTING AUTHORITY
NAME OF ISSUER TITLE OF CLASS CUSIP (x$1000) PRN AMT PRN CALL DISCRETION MANAGER SOLE SHARED NONE
ABBOTT LABS COM 002824100 38,126 932,181 SH SOLE 1 932,181 0 0
ABBVIE INC COM 00287Y109 8,466 150,000 SH SOLE 1 150,000 0 0
ACORN ENERGY INC COM 004848107 93 39,326 SH SOLE 1 39,326 0 0
ACTUATE CORP COM 00508B102 5,088 1,066,666 SH SOLE 1 1,066,666 0 0
AFFILIATED MANAGERS GROUP COM 008252108 19,102 93,000 SH SOLE 1 93,000 0 0
AGNICO EAGLE MINES LTD COM 008474108 17,140 447,525 SH SOLE 1 447,525 0 0
AIR LEASE CORP CL A 00912X302 9,645 250,000 SH SOLE 1 250,000 0 0
ALLIED NEVADA GOLD CORP COM 019344100 3,760 1,000,000 SH SOLE 1 1,000,000 0 0
ALLY FINL INC COM 02005N100 35,732 1,494,450 SH SOLE 1 1,494,450 0 0
ALPHATEC HOLDINGS INC COM 02081G102 58 35,816 SH SOLE 1 35,816 0 0
AMAZON COM INC COM 023135106 4,872 15,000 SH SOLE 1 15,000 0 0
AMERICAN AIRLS GROUP INC COM 02376R102 108,869 2,534,188 SH SOLE 1 2,534,188 0 0
AMERICAN APPAREL INC COM 023850100 150 166,500 SH SOLE 1 166,500 0 0
AMERICAN CAP LTD COM 02503Y103 459 30,000 SH SOLE 1 30,000 0 0
AMERICAN CAPITAL AGENCY CORP COM 02503X105 47,784 2,041,169 SH SOLE 1 2,041,169 0 0
AMERICAN INTL GROUP INC COM NEW 026874784 98,392 1,802,717 SH SOLE 1 1,802,717 0 0
AMERICAN RLTY CAP PPTYS INC COM 02917T104 7,267 580,000 SH SOLE 1 580,000 0 0
AMERICAN SUPERCONDUCTOR CORP COM 030111108 119 72,700 SH SOLE 1 72,700 0 0
AMERICAN TOWER CORP NEW COM 03027X100 1,800 20,000 SH SOLE 1 20,000 0 0
AMICUS THERAPEUTICS INC COM 03152W109 235 70,500 SH SOLE 1 70,500 0 0
ANADIGICS INC COM 032515108 67 82,700 SH SOLE 1 82,700 0 0
APACHE CORP COM 037411105 10,544 104,794 SH SOLE 1 104,794 0 0
APOLLO INVT CORP COM 03761U106 486 56,500 SH SOLE 1 56,500 0 0
APPLE INC COM 037833100 170,412 1,833,764 SH SOLE 1 1,833,764 0 0
ARES CAP CORP COM 04010L103 475 26,600 SH SOLE 1 26,600 0 0
ARIAD PHARMACEUTICALS INC COM 04033A100 6,370 1,000,000 SH SOLE 1 1,000,000 0 0
ARQULE INC COM 04269E107 122 78,600 SH SOLE 1 78,600 0 0
ASTRAZENECA PLC SPONSORED ADR 046353108 11,147 150,000 SH SOLE 1 150,000 0 0
ATMEL CORP COM 049513104 26,861 2,866,666 SH SOLE 1 2,866,666 0 0
ATWOOD OCEANICS INC COM 050095108 6,141 117,014 SH SOLE 1 117,014 0 0
AUDIENCE INC COM 05070J102 4,385 366,666 SH SOLE 1 366,666 0 0
AURICO GOLD INC COM 05155C105 6,763 1,587,650 SH SOLE 1 1,587,650 0 0
AVEO PHARMACEUTICALS INC COM 053588109 90 49,076 SH SOLE 1 49,076 0 0
AVIAT NETWORKS INC COM 05366Y102 95 74,117 SH SOLE 1 74,117 0 0
BAIDU INC SPON ADR REP A 056752108 35,494 190,000 SH SOLE 1 190,000 0 0
BAKER HUGHES INC COM 057224107 27,451 368,721 SH SOLE 1 368,721 0 0
BARRICK GOLD CORP COM 067901108 8,849 483,570 SH SOLE 1 483,570 0 0
B/E AEROSPACE INC COM 073302101 6,768 73,172 SH SOLE 1 73,172 0 0
B/E AEROSPACE INC COM 073302101 6,752 73,000 SH Put SOLE 1 73,000 0 0
BIOAMBER INC *W EXP 05/09/201 09072Q114 497 194,000 SH SOLE 1 194,000 0 0
BIOLASE INC COM 090911108 68 30,949 SH SOLE 1 30,949 0 0
BLACKROCK INC COM 09247X101 1,598 5,000 SH SOLE 1 5,000 0 0
BLACKROCK KELSO CAPITAL CORP COM 092533108 487 53,500 SH SOLE 1 53,500 0 0
BLACKSTONE MTG TR INC COM CL A 09257W100 26,651 918,990 SH SOLE 1 918,990 0 0
BLYTH INC COM NEW 09643P207 121 15,500 SH SOLE 1 15,500 0 0
BODY CENT CORP COM 09689U102 25 27,700 SH SOLE 1 27,700 0 0
BOEING CO COM 097023105 15,420 121,196 SH SOLE 1 121,196 0 0
BROADSOFT INC COM 11133B409 12,399 469,842 SH SOLE 1 469,842 0 0
BROADSOFT INC NOTE 1.500% 7/0 11133BAB8 5,620 5,500,000 PRN SOLE 1 5,500,000 0 0
C&J ENERGY SVCS INC COM 12467B304 2,196 65,000 SH SOLE 1 65,000 0 0
CBS CORP NEW CL B 124857202 28,704 461,917 SH SOLE 1 461,917 0 0
CBS CORP NEW CL B 124857202 22,370 360,000 SH Call SOLE 1 360,000 0 0
CME GROUP INC COM 12572Q105 2,129 30,000 SH SOLE 1 30,000 0 0
CADENCE DESIGN SYSTEM INC COM 127387108 29,150 1,666,666 SH SOLE 1 1,666,666 0 0
CAESARS ACQUISITION CO CL A 12768T103 76,378 6,174,465 SH SOLE 1 6,174,465 0 0
CAESARS ENTMT CORP COM 127686103 119,408 6,604,383 SH SOLE 1 6,604,383 0 0
CAL DIVE INTL INC DEL COM 12802T101 72 54,200 SH SOLE 1 54,200 0 0
CAMECO CORP COM 13321L108 44,702 2,279,563 SH SOLE 1 2,279,563 0 0
CAPITAL SOUTHWEST CORP COM 140501107 281 7,800 SH SOLE 1 7,800 0 0
CELGENE CORP COM 151020104 59,086 688,000 SH SOLE 1 688,000 0 0
CEMEX SAB DE CV SPON ADR NEW 151290889 3,527 266,624 SH SOLE 1 266,624 0 0
CENTERPOINT ENERGY INC COM 15189T107 61,143 2,394,013 SH SOLE 1 2,394,013 0 0
CHARTER COMMUNICATIONS INC D CL A NEW 16117M305 203,821 1,286,908 SH SOLE 1 1,286,908 0 0
CHESAPEAKE ENERGY CORP COM 165167107 1,100 35,400 SH SOLE 1 35,400 0 0
CHESAPEAKE ENERGY CORP COM 165167107 20,979 675,000 SH Put SOLE 1 675,000 0 0
CHURCHILL DOWNS INC COM 171484108 63,513 704,839 SH SOLE 1 704,839 0 0
CIENA CORP NOTE 0.875% 6/1 171779AE1 45,828 46,000,000 PRN SOLE 1 46,000,000 0 0
CITIGROUP INC COM NEW 172967424 5,045 107,114 SH SOLE 1 107,114 0 0
CITRIX SYS INC COM 177376100 136,122 2,176,220 SH SOLE 1 2,176,220 0 0
COCA COLA CO COM 191216100 3,092 73,000 SH SOLE 1 73,000 0 0
COMCAST CORP NEW CL A 20030N101 5,368 100,000 SH SOLE 1 100,000 0 0
COMMSCOPE HLDG CO INC COM 20337X109 19,421 839,649 SH SOLE 1 839,649 0 0
COMMVAULT SYSTEMS INC COM 204166102 9,834 200,000 SH SOLE 1 200,000 0 0
CONATUS PHARMACEUTICALS INC COM 20600T108 178 19,500 SH SOLE 1 19,500 0 0
CONSOL ENERGY INC COM 20854P109 234,417 5,088,283 SH SOLE 1 5,088,283 0 0
CONTROLADORA VUELA CIA DE AV SPON ADR RP 10 21240E105 2,181 242,311 SH SOLE 1 242,311 0 0
CORINTHIAN COLLEGES INC COM 218868107 20 68,900 SH SOLE 1 68,900 0 0
CORONADO BIOSCIENCES INC COM 21976U109 50 29,279 SH SOLE 1 29,279 0 0
CROWN CASTLE INTL CORP CNV PFD STK SR A 228227500 8,670 85,000 SH SOLE 1 85,000 0 0
CROWN CASTLE INTL CORP COM 228227104 1,857 25,000 SH SOLE 1 25,000 0 0
CTRIP COM INTL LTD AMERICAN DEP SHS 22943F100 50,233 784,400 SH SOLE 1 784,400 0 0
CURIS INC COM 231269101 82 44,000 SH SOLE 1 44,000 0 0
CYPRESS SEMICONDUCTOR CORP COM 232806109 30,184 2,766,666 SH SOLE 1 2,766,666 0 0
DELTA AIR LINES INC DEL COM NEW 247361702 12,274 317,000 SH SOLE 1 317,000 0 0
DEPOMED INC COM 249908104 1,051 75,600 SH SOLE 1 75,600 0 0
DIAMONDBACK ENERGY INC COM 25278X109 12,877 145,000 SH SOLE 1 145,000 0 0
DIGITAL RIV INC COM 25388B104 10,287 666,666 SH SOLE 1 666,666 0 0
DIGITAL RIV INC NOTE 2.000%11/0 25388BAD6 123,780 123,625,000 PRN SOLE 1 123,625,000 0 0
DISH NETWORK CORP CL A 25470M109 110,028 1,690,664 SH SOLE 1 1,690,664 0 0
DORAL FINL CORP COM PAR 0.01 25811P852 125 28,900 SH SOLE 1 28,900 0 0
DOW CHEM CO COM 260543103 42,495 825,792 SH SOLE 1 825,792 0 0
DYNEGY INC NEW DEL *W EXP 99/99/999 26817R116 2,769 615,300 SH SOLE 1 615,300 0 0
EP ENERGY CORP CL A 268785102 3,086 133,900 SH SOLE 1 133,900 0 0
EQT CORP COM 26884L109 179,897 1,682,857 SH SOLE 1 1,682,857 0 0
EASTMAN KODAK CO *W EXP 09/03/201 277461133 63 6,681 SH SOLE 1 6,681 0 0
EASTMAN KODAK CO *W EXP 09/03/201 277461141 61 6,681 SH SOLE 1 6,681 0 0
EASTMAN KODAK CO COM NEW 277461406 471 19,228 SH SOLE 1 19,228 0 0
EBAY INC COM 278642103 18,647 372,500 SH SOLE 1 372,500 0 0
EMBRAER S A SP ADR REP 4 COM 29082A107 3,999 109,770 SH SOLE 1 109,770 0 0
ENABLE MIDSTREAM PARTNERS LP COM UNIT RP IN 292480100 11,576 442,000 SH SOLE 1 442,000 0 0
ENDEAVOUR INTL CORP COM NEW 29259G200 114 83,000 SH SOLE 1 83,000 0 0
ENERGEN CORP COM 29265N108 195,148 2,195,635 SH SOLE 1 2,195,635 0 0
ENZON PHARMACEUTICALS INC COM 293904108 52 50,123 SH SOLE 1 50,123 0 0
EXAR CORP COM 300645108 53,329 4,719,395 SH SOLE 1 4,719,395 0 0
EXTREME NETWORKS INC COM 30226D106 6,956 1,566,666 SH SOLE 1 1,566,666 0 0
FACEBOOK INC CL A 30303M102 123,899 1,841,260 SH SOLE 1 1,841,260 0 0
F5 NETWORKS INC COM 315616102 8,469 76,000 SH SOLE 1 76,000 0 0
FIDELITY NATIONAL FINANCIAL CL A 31620R105 1,982 60,500 SH SOLE 1 60,500 0 0
FIFTH STREET FINANCE CORP COM 31678A103 475 48,300 SH SOLE 1 48,300 0 0
FIRST SEC GROUP INC COM NEW 336312202 51 23,400 SH SOLE 1 23,400 0 0
FIRST SOLAR INC COM 336433107 7,106 100,000 SH SOLE 1 100,000 0 0
FLEXION THERAPEUTICS INC COM 33938J106 405 30,000 SH SOLE 1 30,000 0 0
FRANCO NEVADA CORP COM 351858105 5,304 92,500 SH SOLE 1 92,500 0 0
FREEPORT-MCMORAN COPPER & GO COM 35671D857 5,102 139,781 SH SOLE 1 139,781 0 0
GSV CAP CORP COM 36191J101 444 42,000 SH SOLE 1 42,000 0 0
GENERAL MOLY INC COM 370373102 63 54,400 SH SOLE 1 54,400 0 0
GENERAL MTRS CO COM 37045V100 140,359 3,866,654 SH SOLE 1 3,866,654 0 0
GLADSTONE CAPITAL CORP COM 376535100 187 18,600 SH SOLE 1 18,600 0 0
GLADSTONE INVT CORP COM 376546107 259 35,000 SH SOLE 1 35,000 0 0
GLOBAL EAGLE ENTMT INC COM 37951D102 1,959 158,000 SH SOLE 1 158,000 0 0
GLOBALSTAR INC COM 378973408 10,927 2,571,017 SH SOLE 1 2,571,017 0 0
GLYCOMIMETICS INC COM 38000Q102 87 10,300 SH SOLE 1 10,300 0 0
GOGO INC COM 38046C109 6,740 344,589 SH SOLE 1 344,589 0 0
GOLDCORP INC NEW COM 380956409 12,341 442,172 SH SOLE 1 442,172 0 0
GOLUB CAP BDC INC COM 38173M102 683 38,600 SH SOLE 1 38,600 0 0
GOOGLE INC CL C 38259P706 111,886 194,489 SH SOLE 1 194,489 0 0
GORDMANS STORES INC COM 38269P100 74 17,300 SH SOLE 1 17,300 0 0
GREENHILL & CO INC COM 395259104 1,655 33,600 SH SOLE 1 33,600 0 0
GTX INC DEL COM 40052B108 54 38,828 SH SOLE 1 38,828 0 0
HALLIBURTON CO COM 406216101 160,910 2,266,008 SH SOLE 1 2,266,008 0 0
HARMAN INTL INDS INC COM 413086109 13,429 125,000 SH SOLE 1 125,000 0 0
HARTFORD FINL SVCS GROUP INC COM 416515104 2,328 65,000 SH SOLE 1 65,000 0 0
HERCULES TECH GROWTH CAP INC COM 427096508 509 31,500 SH SOLE 1 31,500 0 0
HERTZ GLOBAL HOLDINGS INC COM 42805T105 42,669 1,522,272 SH SOLE 1 1,522,272 0 0
HILLSHIRE BRANDS CO COM 432589109 12,460 200,000 SH SOLE 1 200,000 0 0
HOLOGIC INC FRNT 12/1 436440AG6 155,062 141,367,000 PRN SOLE 1 141,367,000 0 0
HOME DEPOT INC COM 437076102 4,048 50,000 SH SOLE 1 50,000 0 0
HOST HOTELS & RESORTS INC COM 44107P104 45,418 2,063,515 SH SOLE 1 2,063,515 0 0
HUBBELL INC CL B 443510201 37,730 306,371 SH SOLE 1 306,371 0 0
HUTCHINSON TECHNOLOGY INC COM 448407106 52 20,986 SH SOLE 1 20,986 0 0
ILLUMINA INC COM 452327109 34,834 195,102 SH SOLE 1 195,102 0 0
IMATION CORP COM 45245A107 46 13,500 SH SOLE 1 13,500 0 0
IMPERIAL HLDGS INC COM 452834104 70 10,200 SH SOLE 1 10,200 0 0
IMPERVA INC COM 45321L100 3,731 142,500 SH SOLE 1 142,500 0 0
INFORMATICA CORP COM 45666Q102 8,467 237,500 SH SOLE 1 237,500 0 0
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INTEL CORP COM 458140100 120,697 3,906,048 SH SOLE 1 3,906,048 0 0
INTERMOLECULAR INC COM 45882D109 103 44,100 SH SOLE 1 44,100 0 0
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INTUIT COM 461202103 12,080 150,000 SH SOLE 1 150,000 0 0
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JDS UNIPHASE CORP COM PAR $0.001 46612J507 13,301 1,066,666 SH SOLE 1 1,066,666 0 0
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KIOR INC CL A 497217109 9 25,900 SH SOLE 1 25,900 0 0
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REGIONS FINL CORP NEW COM 7591EP100 10,241 964,300 SH SOLE 1 964,300 0 0
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ROVI CORP NOTE 2.625% 2/1 779376AB8 220,563 217,437,000 PRN SOLE 1 217,437,000

Rating: 4.9/5 (7 votes)

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Comments

gurufocus
Gurufocus premium member - 1 week ago
Responses from Soros' firm to this story:



Investing.com

”That Misleading Story About George Soros (Trades, Portfolio)”

Jeff Miller


A seriously flawed story about George Soros (Trades, Portfolio) got a lot of media coverage Friday. In the midst of options expiration and breaking news from Ukraine, this story might not seem very important.


It was big enough to earn a play from all of the major news sources and a feature on CNBC.


No one got the story right!


I am not going to list all of the errors. If anyone had exposed the problem they would be in line for my Silver Bullet award! Instead, everyone seems to have lamely tagged along with some anonymous sources. I hope no investors traded on this “information.”


The Basic Claim


The news story was that George Soros (Trades, Portfolio), one of the most successful investors in history, had made a big bet on the market moving lower. That the bet was much larger than in past filings (up over 600%!!). That what he had risked was the equivalent of 17% of his fund. Etc.


The Reality


None of these claims can be supported from the actual filing. Here are the problems. Those that should be obvious to anyone:


The information need not be filed for 45 days. In the era of high frequency trading, this is ancient history.


There is no way to determine whether the positions are hedges against other holdings, nor to evaluate the relative size.


These items might require an options professional, but there are plenty of them around who would be happy to comment:


The reports are based upon “notional value.” This is a calculation of the number of option contracts multiplied by 100 and by the value of the underlying security.


The notional value does not represent how much was spent on the option, so using it to show the percentage of the portfolio invested is completely inaccurate.


The report does not show which strike price was used. If buying puts, you could buy some that were 10% or more out of the money (tail risk?) and the notional value would be the same as if you bought puts that were deep in the money.


Put another way, the report does not show the “delta” of the options — how much the options change in price given a change in the underlying security.


The 13F filing does not require disclosure of short positions, including short puts. Short puts are actually a long position, so you can see the confusion. The reported options could be part of a complex spread — and probably are. The spread might not even represent short deltas. We simply do not know.


To summarize: Soros might have a boatload of cheap tail risk puts. He might have a put spread, including one that might actually lean long. He could have some kind of volatility play, since he reports both long calls and puts. He might have taken the entire position off weeks ago.


Do we really care about this? You probably should not be influenced by George Soros (Trades, Portfolio)’s position from 45 days ago, but it gets played as a big story.


What has gone wrong?


Our news sources completely failed on this story. What went wrong?


Budget cuts? Summer vacations? A shorter news cycle?


Whatever the reason, the mainstream media sources are rushing to publish questionable information and conclusions. I suppose there are a few investors out there who made a decision based upon what George Soros (Trades, Portfolio) was doing. Some sources said this was evidence that “the big one” was at hand.


And of course, the government is no help. The required filings are well-intentioned, but do not provide even the most basic information required to discern the actual position of these managers.


I always try to make a constructive suggestion. Requiring the actual holdings — strike prices, both long and short — would allow readers of the filing to evaluate the position as of the stated date. That is the best the government can do. Trying to put a number on the position value is a moving target that changes with time and price. Leaving out the short positions turns the exercise into a joke.

chompinchuck
Chompinchuck - 6 days ago
gurufocus has highlighted many George Soros (Trades, Portfolio)' positions in the past and many of them have been quite dramatic. I'd like to see if anyone ever has made any money off of these ideas particularly given that by the time we read about them he has most often completely changed his mind and his position.

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