In the world of investing, people are always mindful of the spending habits of others, wanting to know that they too are making the right decisions at the right time. Ignoring the moves of a successful investor could make the difference between making a killing in the market and losing a bundle. And if you’re going to keep your eye on any investor, you can’t do better than to watch what George Soros does.
As reported by The Street, Soros Fund Management, recently made private, has gotten rid of its investments in Chevron, Chesapeake Energy and NRG Energy at the end of 2015. To simply cut out three massive corporations from its portfolio, this hedge fund, head by one of the most recognizable names in the world of investing, carries with it a sense of warning that many are considering to follow.
Throughout 2015, and continuing to bleed into 2016, crude oil has been in a volatile state, dragging prices well below conservative estimates. Countries have tried to remedy the situation, such as Saudi Arabia and Russia who have agreed to halt oil production, creating a limited stock of crude and raise the price per barrel.
Since 2014, the price of crude per barrel has dropped by 73%, scaring away many of their investors and keeping any one with financial sense away. It also proposes a new wave of problems for the 5% of the American workforce that services, directly and indirectly, oil markets throughout the country, complicating economic matters further, eventually affecting the US’ GDP and spreading throughout major markets in Europe and Asia that relies on these sources of crude. According to Goldman Sachs, the numbers on energy expenditure in the US has determined that a third of all its spending goes towards this and about a fourth of research and development dollars are geared in this direction as well.
With these numbers from Street.com, Soros seems to have made the right decision to dump these stocks. The World Bank has backed him up on this with an updated forecast, taking the average price for a barrel of oil from $51 to an estimated $37, down $14 from just four months ago. For now, there seems to be no trending in the opposite direction.
Living in Nazi occupied Hungary, George Soros fled to the UK in search of freedom, Ultimately he made it to the United States where he developed his career in finance and became an institutional figure in investing.
In his personal life, Soros has dedicated time, money and effort to causes of human right. Through Open Society Foundations, which he founded, Soros has fought for the rights of citizens and transparency in oppressive nations since 1974.