George Soros is a well known figure in the realm of politics and finances. In 1947, he fled Hungary and went to London, England. During his time there, he attended the London School for Economics. After he graduated, he found his way to the United States of America, and there made a name for himself in finances. He is known for a variety of different investments, but the biggest one he is known for is his bet against the British pound in 1992. He earned around a billion dollars off that bet alone, and has proven himself knowledgeable time and again.
The financial tycoon has made an interesting play as of the past week. He had the Soros Fund Management dump all their stocks into three energy companies: Chevron, Chesapeake Energy, and NRG Energy. This move has been an upset in the stock market for one major reason: the energy sector has been incredibly volatile lately, and for good reason.
Although no one will question low oil prices, they should. Low oil prices mean that there is a lot of oil, but little demand. Saudi Arabia and Russia have been rather upset over the low prices, and have decided to try and do something about it. They have joined together in a pact to supply less oil, therefore hoping to drive oil prices up. The lower oil prices means that these countries do not profit as well as they want to off of the oil.
The two countries have also tried to get Iran into the pact as well. However, Iran has about a third of the world’s known oil supplies. Just to spite Russia and Saudi Arabia, Iran has promised to continue dumping oil into the world supply available, and keep oil prices low. More information on this pact can be found in the original article from The Street.
Returning to Soros, there has been a lot of speculation about why he has dumped all his stocks into those three specific companies. One theory is that he knows something the rest of the world has yet to figure out. Another, just as popular, theory is that he has acted prematurely and will end up loosing money on these investments. Something will end up giving when the energy companies release their reports, giving investment outlooks and predictions about what will happen in the future. These reports, however, are expected to be rather grim.
Soros will have his hands full, no matter what the energy market decides to do. There’s almost nothing to do but wait now.