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Joshua Rodriguez
Joshua Rodriguez
Articles (44) 

Now Is the Time to Follow George Soros

With trade wars threatening economic stability, it is time to follow the guru's lead

June 20, 2018

George Soros (Trades, Portfolio) is one of the most successful investors that ever lived. To gain this title, Soros became popular for exploiting economic trends by mixing his incredible knowledge of economic movement with investing acumen that’s second to none. In fact, in at least two moves that come to mind, Soros earned $1 billion or more in a single trade:

  • He broke the Bank of England - In one of the most popular trades Soros ever made, he bet on the inevitable devaluation of the British pound. So he decided to short the currency in a trade that would ultimately net him $1 billion!
  • Breaking the yen - In another massive move, Soros shorted the Japanese yen as monetary easing started to take hold. In doing so, his management fund made a $1 billion profit, opening a year where Soros himself personally made $4 billion and setting him at the top of the list of highest earning hedge fund managers.

So why are we digging into all of this? Well, if economic events lead to potential gains in the market, there’s no better time than now to follow the guru's lead. 

A trade war leading to global economic implications

It is no secret that a trade war is taking place. With President Donald Trump pushing for changes to how the United States trades around the world, with the goal of giving American companies an upper hand in the global market, we’re seeing implications around the globe. From China to Europe and everywhere in-between, we’re seeing wide swings in valuations of not only currencies, but securities. Even the Canadian markets are seeing incredible volatility as the trade war continues.

At the end of the day, the U.S. is the largest economy in the world. Therefore, any changes to how the U.S. trades with other countries is likely to lead to economic movement. Of course, Soros is likely seeing incredible opportunity in this economic movement, the type of opportunity that could lead to yet another billion-dollar profit for his firm.

Assets Soros is likely watching

We all know that not all assets are created equally. If you want to trade like Soros, though, it’s important that you watch the assets he’s likely watching. With the trade war having a profound effect on some specific regions, he is likely paying close attention to the following assets:

  • The U.S. dollar- The U.S. is right in the middle of the trade war. While there could be positive implications, it could also lead to a negative impact on the economy. Considering this, Soros is likely watching the U.S. dollar for strong opportunities.
  • The Chinese yuan - When thinking about the trade war, China also comes to mind as it  has been the most vocal and active it response to tariffs and other actions by the U.S. Of course, Trump has retaliated with threats of further action. As a result, the Chinese yuan has seen tremendous volatility so far this year and is on a downward trajectory. Considering this, Soros is likely following the yuan closely as well.
  • The Canadian dollar - Finally, the Canadian dollar is in the limelight as President Trump works to renegotiate the North American Free Trade Agreement. With high volatility and tremendous exposure to the trade war, the currency is likely a prime target for Soros.

What to watch for

While its important to follow these assets, it is also crucuial to know what you should be looking for. At the end of the day, traders should be alert for news that could lead to tremendous movements, such as:

  • Geopolitical news - Look for any news associated with the trade war that could have a direct impact on the countries associated with the previously mentioned currencies. Increased tariffs or other actions could have large economic implications, leading to wide swings in value.
  • Monetary policy changes - Soros made his big trades by predicting declines in the values of currencies based on monetary policy. When economies are in jeopardy, we tend to see movement in economic policy. Any movement here could lead to big moves in the correlated asset, presenting a strong opportunity.
  • Economic reports - Finally, keep a close eye on economic reports. Gross domestic product, employment, consumer sentiment, investor sentiment and other reports could give strong clues as to where currency values are headed.

Final thoughts

If you want to trade like Soros, follow strong economic opportunities. Considering the global trade war, there’s no time better than now to do just that.

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