Billionaires Soros, Paulson Bet Big on Gold

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twomp

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According to Bloomberg News, Paulson & Co. and Soros Fund Management bumped up exposure to SPDR Gold Trust to 21.8 million shares and 884,000 shares, respectively. Paulson & Co. now has 44 percent of its $24 billion fund exposed to bullion.
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http://news.yahoo.com/blogs/abc-blo...-1c45f5d866cb/comments?count=20&sortBy=oldest

Right smack dab on the front page of Yahoo. What do you guys think is going on here? Why would they announce something like this if they were trying to make money? Do you guys think they are intentionally trying to drive up the price of gold? I am very uninformed on this issue so any thoughts or opinions would be greatly appreciated.
 
It's public information, and newsworthy information as well. The deals they struck preceded the headlines and the prices have already gone up.

Love how they call the asset purchase "exposure to bullion". :rolleyes:
 
... and what is the endgame on this? Seems odd that Govt. sucklings would get into gold.
 
Lord Xar said:
... and what is the endgame on this? Seems odd that Govt. sucklings would get into gold.
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What exactly is odd about some rich firms investing in gold. These sharks will go whereever money can be made.

To the OP, why would they make it a secret that they're investing in gold, when it's more profitable to them to drive the shares up?

Only thing I might read into this is that during times of economic uncertainty, gold becomes a safe and even good investment if enough are buying into it to drive the price up.
 
TheGrinchWhoStoleDC said:
What exactly is odd about some rich firms investing in gold. These sharks will go whereever money can be made.

To the OP, why would they make it a secret that they're investing in gold, when it's more profitable to them to drive the shares up?

Only thing I might read into this is that during times of economic uncertainty, gold becomes a safe and even good investment if enough are buying into it to drive the price up.
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Obviously I don't know much about this but my initial impression was that they were doing this to drive up the price of gold.

I guess my theory was that they already have a large supply of gold which they have gotten at a cheaper price. They then somehow get the media to do articles like this to drive up the price of gold. Finally once the price hits a point that they like, they then sell a large amount. Once a large amount of gold is released, prices start dropping and they start buying again.

Obviously, its the conspiracy theorist in me thinking all this.
 
One thing that I don't get. If the market is manipulated, and there isn't enough physical bullion to account for all the traded shares AND if people like Paulson, Soros understand this, then why wouldn't they just by physical? If all that is true, surely it would drive the prices up even more, especially when it got hard to fulfill delivery orders...
 
DEGuy said:
One thing that I don't get. If the market is manipulated, and there isn't enough physical bullion to account for all the traded shares AND if people like Paulson, Soros understand this, then why wouldn't they just by physical? If all that is true, surely it would drive the prices up even more, especially when it got hard to fulfill delivery orders...
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The markets aren't manipulated. People think Soros has some secret knowledge. He doesn't. He's good at managing risk. He probably has slightly more losing trades than winning trades. He's good at riding trends for all their worth and good at exiting trades quickly if the trade doesn't materialize.

Paulson lost 55% last year. Not sure that he necessarily should be copied.
 
misean said:
The markets aren't manipulated. People think Soros has some secret knowledge. He doesn't. He's good at managing risk. He probably has slightly more losing trades than winning trades. He's good at riding trends for all their worth and good at exiting trades quickly if the trade doesn't materialize.

Paulson lost 55% last year. Not sure that he necessarily should be copied.
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Glad to know that someone with no inside knowledge can tell us definitively whether Soros has inside knowledge or not. :rolleyes:

And if you don't think the markets are manipulated with plenty of people using inside knowledge to their advantage, then I've got some ocean-front property in Arizona to sell you. Just make sure to send me the check before you open up a Ron Paul book ;)
 
TheGrinchWhoStoleDC said:
Glad to know that someone with no inside knowledge can tell us definitively whether Soros has inside knowledge or not. :rolleyes:

And if you don't think the markets are manipulated with plenty of people using inside knowledge to their advantage, then I've got some ocean-front property in Arizona to sell you. Just make sure to send me the check before you open up a Ron Paul book ;)
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People have said the markets are manipulated forever. They aren't. No one player is big enough to move any liquid futures market or an entire stock market for any sustained period of time. Government fiscal and monetary policy are the only tools large enough to move markets.

The burden of proof is on you to prove that Soros has some inside knowledge. He and Jim Rogers were very successful long before they would have access to any "insiders."
 
misean said:
People have said the markets are manipulated forever. They aren't. No one player is big enough to move any liquid futures market or an entire stock market for any sustained period of time. Government fiscal and monetary policy are the only tools large enough to move markets.

The burden of proof is on you to prove that Soros has some inside knowledge. He and Jim Rogers were very successful long before they would have access to any "insiders."
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You're acting as if manipulation and control are exclusive. They're not. No one can completely dictate control of the market, but you sure can manipulate as well as better predict with inside knowledge. To act as if the likes of Goldman Sach's is always on the winning team just by savvy investment is quite naive for a Ron Paul supporter.

So naive to the point that I don't even need to get into how that relates to this statement you made: " Government fiscal and monetary policy are the only tools large enough to move markets". Ummm yeah, again, government policy helps control, but manipulation and insider knowledge still exist regardless, and are often the same ones who are dictating that government policy.
 
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TheGrinchWhoStoleDC said:
You're acting as if manipulation and control are exclusive. They're not. No one can completely dictate control of the market, but you sure can manipulate as well as better predict with inside knowledge. To act as if the likes of Goldman Sach's is always on the winning team just by savvy investment is quite naive for a Ron Paul supporter.

So naive to the point that I don't even need to get into how that relates to this statement you made: " Government fiscal and monetary policy are the only tools large enough to move markets". Ummm yeah, again, government policy helps control, but manipulation and insider knowledge still exist regardless, and are often the same ones who are dictating that government policy.
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Manipulation is moving the price of a market so you profit. I'm not sure how you are using the definition. And is Goldman Sachs always on the winning team? If you are talking about their High Frequency Trading profits, my understanding from watching a tv segment on it is that the very best HFTs basically never have losing weeks. So if you are talking about HFTs then they are on the winning team. That isn't manipulation though.

Do honestly think the bulk of trading profits from people like Soros come from some special backdoor insight?
 
There's one private entity that can manipulate and control markets. The Federal Reserve. The power to create money can manipulate and control anything, even you.
 
misean said:
Manipulation is moving the price of a market so you profit. I'm not sure how you are using the definition. And is Goldman Sachs always on the winning team? If you are talking about their High Frequency Trading profits, my understanding from watching a tv segment on it is that the very best HFTs basically never have losing weeks. So if you are talking about HFTs then they are on the winning team. That isn't manipulation though.

Do honestly think the bulk of trading profits from people like Soros come from some special backdoor insight?
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It's how Keynes made most of his money in the 30s. Special connections bring about great profits.
 
brooks009 said:
Wow, my tin foil hat is spinning. Is the crash of the dollar closer then we thought?
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The crash of the dollar could happen literally tomorrow. The relative stability we see today is illusory at best. Even the slightest disruption can set it off at this point, and it will look like this

 
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