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George Soros Was ‘Long’ on Pound Before Vote on Brexit

33 points by redcastle 10y ago

lmm 10y ago
Link should have an autoplaying video warning.
- daniyel 10y ago
  It did not autoplay for me. Maybe because I use uBlock Origin.
  - loxs 10y ago
    I use uBlock Origin and it did auto play.
- deleted 10y ago
  [deleted]
- theandrewbailey 10y ago
  Didn't autoplay with Firefox + NoScript.
  - ceejayoz 10y ago
    No shit.
- rplnt 10y ago
  I saw a "please disable ad-blocker" content-blocker.
Wonnk13 10y ago
not really that surprised; despite the razor thin margin I think most people (myself included) thought a Leave majority was just incomprehensible. I've just returned from a month in London - this has been a good learning experience for me in terms of how my personal biases help rationalize expected outcomes. And also why I just throw money at passive index funds - I'm not experienced enough yet to gamble on these sorts of things.
- Someone1234 10y ago
  Here's a legitimate question, have index funds ever "crashed?" If you look at the last ten years, they didn't do well during the recession years, but over the entire period either matched or exceeded most managed funds but without nearly as high of a fee. People act like index funds are a "risky investment" compared to bonds. But is that actually true? Seems like countries getting into trouble is so common now that bonds aren't as rock solid as they used to be, and over tens of years index funds have shown to be extremely stable.
  - skybrian 10y ago
    Conventional wisdom is that they are risky if you might need to sell right away. Not so much if you're going to hold for 5-10 years or more.
    - loeg 10y ago
      I've always heard 20 years. Look at stagflation in the US in the 70s.
  - loeg 10y ago
    Index funds crash whenever the market does. In 2008/2009 they were down 50% just like the indices they track.
  - nabla9 10y ago
    Risk is an umbrella term. The risk we are talking here is risk according to the modern portfolio theory. It's the variance of a portfolio. Index funds spread the risk across multiple stocks, to reduce variance. Stock markets have overall greater variance than bonds, so the risk of index funds is is higher than bonds. The risk decreases with time. This is why you should see index funds as long term investment. In 10-15 year time period total return of index funds is relatively low risk. There are other risks in all financial investments. Variance is not the only one.
  - berberous 10y ago
    Index funds just reflect the entire market. The stock market crashes frequently, e.g. 2001, 2008, etc. In a bad crash, you could lose 50+%. And there's no guarantee of a swift recovery: in Japan, levels have still not recovered to the pre-1991 highs. With bonds however, if you are buying a high credit quality bond, you will almost certainly get your money back at maturity (in the interim, the price can decline due to changes in interest rates). With a long enough investment horizon however, being invested in the entire US stock market has historically worked out very well, and should hopefully continue to do so in the future barring very extreme destabilizing world events. You should get growth that you cannot achieve with bonds. So it all depends on your time horizon (e.g. longer than an economic cycle) and risk appetite (appreciation vs. maintaining principal).
Symmetry 10y ago
“Now the catastrophic scenario that many feared has materialized, making the disintegration of the EU practically irreversible” is I think something that people aren't considering enough regarding the recent Brexit vote.
- draugadrotten 10y ago
  High value words like "Catastrophic", "feared", "disintegration", "irreversible" are all markers that indicates propaganda, not analysis. Cooler heads will prevail.
  - foldr 10y ago
    Cooler heads have completely failed to prevail so far. I'm not sure why you think that comment is propaganda. Catastrophic things do happen sometimes.
    - andybak 10y ago
      And even when they don't it doesn't invalidate the warnings. You want to avoid even a small risk of a very big negative outcome.
    - calpaterson 10y ago
      > Cooler heads have completely failed to prevail so far. We are halfway through day 2 of a process that will take many years
  - andybak 10y ago
    To understand Soros you need to be aware of his childhood in WWII Hungary: https://en.wikipedia.org/wiki/George_Soros#Early_life https://en.wikipedia.org/wiki/George_Soros#Early_life His attachment to the EU is partly based on his belief that we are too sanguine about Europe's recent past being exceptional and non-repeatable. I don't think this is entirely unreasonable. Some commentators in the 1910's possessed a similar optimism.
    - 10y ago
OneOneOneOne 10y ago
All the short sighted articles are surprising. It is uncertain whether the "brexit" is better long term solution for the UK. Taking a look at the stock market a day after the vote is not going to show the true impact. Mr Soros's comment reflects my current opinion... “Britain eventually may or may not be relatively better off than other countries by leaving the EU, but its economy and people stand to suffer significantly in the short to medium term,”
- yclept 10y ago
  So is it better for the EU / global economy?
- jonknee 10y ago
  This isn't a short sided article... George Soros is famous for "breaking the bank" in the early 1990s so there were tons of people curious as to where he was positioned on Friday. That's it. It doesn't matter if this turns out to be a disaster, neutral or a good thing for the UK. All that people wanted to know was if Soros hit the lottery twice. http://www.investopedia.com/ask/answers/08/george-soros-bank-of-england.asp http://www.investopedia.com/ask/answers/08/george-soros-bank...
  - auntienomen 10y ago
    The thing is, we don't know how or even if Soros bet on Brexit. The article doesn't say. We know he was long the pound, but we don't know what the rest of his portfolio looked like. (If he was short European stocks or long gold, he might have done really well.) It makes sense that people were curious about his pound position, given his history. But we haven't got the knowledge needed to compare his massive public outright pound bet to his pre-Brexit referendum positioning.
- ralfd 10y ago
  Sure, we don't know how it will turn out. BUT: The EU has a big incentive to make the UK regret their referendum, as it is not in their interest that other countries exit too. That prevents a favorable deal like for non-members Switzerland or Norway.
joeyspn 10y ago
I doubt he was long and I doubt he's going to disclose to the press his real strategies...

33 points by redcastle 10y ago

lmm 10y ago

Link should have an autoplaying video warning.

daniyel 10y ago
It did not autoplay for me. Maybe because I use uBlock Origin.
- loxs 10y ago
  I use uBlock Origin and it did auto play.
deleted 10y ago
[deleted]
theandrewbailey 10y ago
Didn't autoplay with Firefox + NoScript.
- ceejayoz 10y ago
  No shit.
rplnt 10y ago
I saw a "please disable ad-blocker" content-blocker.

Wonnk13 10y ago

not really that surprised; despite the razor thin margin I think most people (myself included) thought a Leave majority was just incomprehensible. I've just returned from a month in London - this has been a good learning experience for me in terms of how my personal biases help rationalize expected outcomes. And also why I just throw money at passive index funds - I'm not experienced enough yet to gamble on these sorts of things.

Someone1234 10y ago
Here's a legitimate question, have index funds ever "crashed?" If you look at the last ten years, they didn't do well during the recession years, but over the entire period either matched or exceeded most managed funds but without nearly as high of a fee. People act like index funds are a "risky investment" compared to bonds. But is that actually true? Seems like countries getting into trouble is so common now that bonds aren't as rock solid as they used to be, and over tens of years index funds have shown to be extremely stable.
- skybrian 10y ago
  Conventional wisdom is that they are risky if you might need to sell right away. Not so much if you're going to hold for 5-10 years or more.
  - loeg 10y ago
    I've always heard 20 years. Look at stagflation in the US in the 70s.
- loeg 10y ago
  Index funds crash whenever the market does. In 2008/2009 they were down 50% just like the indices they track.
- nabla9 10y ago
  Risk is an umbrella term. The risk we are talking here is risk according to the modern portfolio theory. It's the variance of a portfolio. Index funds spread the risk across multiple stocks, to reduce variance. Stock markets have overall greater variance than bonds, so the risk of index funds is is higher than bonds. The risk decreases with time. This is why you should see index funds as long term investment. In 10-15 year time period total return of index funds is relatively low risk. There are other risks in all financial investments. Variance is not the only one.
- berberous 10y ago
  Index funds just reflect the entire market. The stock market crashes frequently, e.g. 2001, 2008, etc. In a bad crash, you could lose 50+%. And there's no guarantee of a swift recovery: in Japan, levels have still not recovered to the pre-1991 highs. With bonds however, if you are buying a high credit quality bond, you will almost certainly get your money back at maturity (in the interim, the price can decline due to changes in interest rates). With a long enough investment horizon however, being invested in the entire US stock market has historically worked out very well, and should hopefully continue to do so in the future barring very extreme destabilizing world events. You should get growth that you cannot achieve with bonds. So it all depends on your time horizon (e.g. longer than an economic cycle) and risk appetite (appreciation vs. maintaining principal).

Symmetry 10y ago

“Now the catastrophic scenario that many feared has materialized, making the disintegration of the EU practically irreversible” is I think something that people aren't considering enough regarding the recent Brexit vote.

draugadrotten 10y ago
High value words like "Catastrophic", "feared", "disintegration", "irreversible" are all markers that indicates propaganda, not analysis. Cooler heads will prevail.
- foldr 10y ago
  Cooler heads have completely failed to prevail so far. I'm not sure why you think that comment is propaganda. Catastrophic things do happen sometimes.
  - andybak 10y ago
    And even when they don't it doesn't invalidate the warnings. You want to avoid even a small risk of a very big negative outcome.
  - calpaterson 10y ago
    > Cooler heads have completely failed to prevail so far. We are halfway through day 2 of a process that will take many years
- andybak 10y ago
  To understand Soros you need to be aware of his childhood in WWII Hungary: https://en.wikipedia.org/wiki/George_Soros#Early_life https://en.wikipedia.org/wiki/George_Soros#Early_life His attachment to the EU is partly based on his belief that we are too sanguine about Europe's recent past being exceptional and non-repeatable. I don't think this is entirely unreasonable. Some commentators in the 1910's possessed a similar optimism.
  - 10y ago

OneOneOneOne 10y ago

All the short sighted articles are surprising. It is uncertain whether the "brexit" is better long term solution for the UK. Taking a look at the stock market a day after the vote is not going to show the true impact. Mr Soros's comment reflects my current opinion... “Britain eventually may or may not be relatively better off than other countries by leaving the EU, but its economy and people stand to suffer significantly in the short to medium term,”

yclept 10y ago
So is it better for the EU / global economy?
jonknee 10y ago
This isn't a short sided article... George Soros is famous for "breaking the bank" in the early 1990s so there were tons of people curious as to where he was positioned on Friday. That's it. It doesn't matter if this turns out to be a disaster, neutral or a good thing for the UK. All that people wanted to know was if Soros hit the lottery twice. http://www.investopedia.com/ask/answers/08/george-soros-bank-of-england.asp http://www.investopedia.com/ask/answers/08/george-soros-bank...
- auntienomen 10y ago
  The thing is, we don't know how or even if Soros bet on Brexit. The article doesn't say. We know he was long the pound, but we don't know what the rest of his portfolio looked like. (If he was short European stocks or long gold, he might have done really well.) It makes sense that people were curious about his pound position, given his history. But we haven't got the knowledge needed to compare his massive public outright pound bet to his pre-Brexit referendum positioning.
ralfd 10y ago
Sure, we don't know how it will turn out. BUT: The EU has a big incentive to make the UK regret their referendum, as it is not in their interest that other countries exit too. That prevents a favorable deal like for non-members Switzerland or Norway.

joeyspn 10y ago

I doubt he was long and I doubt he's going to disclose to the press his real strategies...