Bearish George Soros Lost $1.0 Billion after Trump Won White House
George Soros, the founder of the $4.5 billion Soros Fund Management LLC and the 23rd wealthiest person in the world1, lost nearly $1.0 billion as a result of the stock market rally after Donald Trump’s surprise election victory.2
Soros, who famously made $1.0 billion back in 1992 when he bet against the British pound, thought the markets would tank immediately following Trump’s November win. Soros openly supported Hillary Clinton during the campaign, and like many, thought her winning the Oval Office was a certainty.
He wasn’t alone: analysts were bullish on Clinton and bearish on Trump. Analysts predicted a Trump victory would translate into a 10% to 50% drop on the S&P 500. A Clinton victory, on the other hand, was expected to result in a small two to three percent bump.
Immediately after the election, Soros became more bearish, fearing trade wars with China and Mexico would send markets spiraling. Stocks did the opposite. Wall Street is clearly of the opinion that President Trump’s proposed tax cuts and infrastructure spending will revitalize the U.S. economy and boost corporate earnings.
After trading in a tight range all summer, U.S. stocks soared in the weeks following Trump’s election win. The S&P 500 broke through a resistance level and climbed more than eight percent to a record high of 2,213 in late November. The optimism continued in December, with the S&P 500 hitting a record high of 2,277 in mid-December—a 9.3% increase since before the U.S. election.
The Dow Jones Industrial Average (DOW) rebounded after the election. The 30-strong index hit a record intra-day high of 19,225 at the end of November, for a three-week gain of 7.2%. By the end of 2016, the DOW had soared 10.9% over pre-election levels.
As stocks soared, Soros’ trading losses approached $1.0 billion. He wisely adjusted his positions late in 2016 and exited many of his bearish bets, avoiding additional losses.
Not everyone was bearish on Trump. Hedge funds run by Trump advisors did quite well. Carl Icahn, the 43rd wealthiest person in the world worth an estimated $17.0 billion, made around $700.0 million on November 9 alone. John Paulson, the 52nd wealthiest person in the world, worth $8.6 billion, added $463.0 million to his portfolio on the same day.3
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- “The World’s Billionaires” Forbes, last accessed January 23, 2017; http://www.forbes.com/billionaires/.
- “Zuckerman, G. and Chung, J., “Billionaire George Soros Lost Nearly $1 Billion in Weeks After Trump Election,” The Wall Street Journal, January 13, 2017; http://www.wsj.com/articles/billionaire-george-soros-lost-nearly-1-billion-in-weeks-after-trump-election-1484227167.
- Wieczner, J., “Hedge Funds Run by Trump Advisors Made the Most Money Off His Election Win,” Fortune, November 9, 2016; http://fortune.com/2016/11/09/trump-cabinet-carl-icahn-hedge-fund/