The Management Principles of George Soros

The following is straight from Operator Kean, a member of the Macro Ops Collective. To contact Kean, visit his website here. In the first and second articles of this 3-part series, we covered the philosophy and the investment principles and strategies of the famous Quantum Fund ran by billionaire investor George Soros. In this third article, we will cover the management principles of this legendary firm. (I) Be Part Of A Global ‘Intelligence Network’ One advantage that the Palindrome had was his ‘intelligence network’. His rise from obscurity in the early 1960s to commercial stardom on Wall Street brought him […]

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The Link Between GDP and Cryptos

It was the best of times, it was the best of times. OK, that’s not exactly the Dickens quote from A Tale of Two Cities, but even with the recent volatility and inflation jitters, the sentiment seems to fit the mood of the markets today. And what’s not to like? Tax reform will put more coin in most people’s pockets in the weeks ahead, not to mention fill corporate coffers to the point of overflowing. Based on estimates of future spending and earnings, investors are driving stocks higher from what were already record levels. But just like a late-night infomercial… […]

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Chart of the Day: When Will Higher Rates Kill Stocks?

Interest rates have to go higher. Almost everyone knows that. But the real question on everyone’s mind is: will higher rates kill the bull market in stocks? There’s a strongly-held belief that higher interest rates always work against stocks. But that’s only half true. The direction of interest rates is important. That’s what everyone focuses on. But the level of interest rates is just as important. And this aspect of the relationship between interest rates and stock prices is overlooked by most. Consider this chart, published consistently in J.P. Morgan’s Quarterly Guide to the Markets: The chart plots the correlation […]

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5 Big Drivers of Higher Inflation Rates Ahead

Investors got lulled into a state of inflation complacency.  Persistently low official inflation rates in recent years depressed bond yields along with risk premiums on all financial assets. That’s changing in 2018. Five drivers of higher inflation rates are now starting to kick in. Inflation Driver #1: Rising CPI The Consumer Price Index (CPI) is a notoriously flawed measure of inflation.  It tends to understate real-world price increases. Nevertheless, CPI is the most widely followed measure of inflation.  When it moves up, so do inflation expectations by investors. Insert Junk silver tile – verify the premiums displayed. On February 13th, […]

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Another Lesson In Position Sizing From The Volpocalypse of 2018

Most famous fund failures have leverage at their core. That’s the true culprit for disaster —  not the actual trade ideas. Bad position sizing kills. Long Term Capital Management’s strategy involved scanning the world for bond spreads that diverged from historical values — something known as convergence trading. When spreads diverged from their means, LTCM would buy the cheap and sell the expensive bond. Then wait for prices to revert back to their “theoretical efficient” market price and make a small profit. But LTCM wasn’t satisfied with the tiny profits on the spread. They were “Masters of the Universe” and […]

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The Fed’s “Catch 22”

Before diving into the topic, let’s be clear about one thing:  The economic definition of “inflation”  is the increase in money supply relative to the marginal increase of wealth output (GDP) in the economic system for which money supply is created. This is differentiated from “price inflation,” which would is “a general rise in prices.” Money and credit creation in excess of wealth output causes currency devaluation.  It is this currency devaluation that arises from money and credit printing that causes “price inflation.”  More money (and credit) chasing a relatively less amount of “goods.” Furthermore, the commonly used price inflation […]

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Which States Are Growing Fastest?

One of the buzzwords since Trump became president is “growth.” He’s made ridiculous promises about economic growth that he can’t possibly make good on. But let’s take a look at another type of growth that affects us all: population growth, specifically in the continental U.S. It should be no surprise that very high-cost states like New York, Massachusetts, Connecticut, New Jersey, California, and Hawaii are NOT growing very fast. Southern Florida isn’t growing as fast as the northern half due to higher costs of living. And people generally tend to move away from colder Northeastern and Midwestern states to the […]

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Debt Cancer: More Than 80 Percent Of American Adults Owe Somebody Else Money

How long can our debt levels keep growing much, much faster than the overall economy?  We haven’t had a year of 3 percent growth for the U.S. economy since the middle of the Bush administration, but we keep borrowing money as if there is no tomorrow.  Much of the focus has been on the exploding debt of the federal government, and that is definitely something I plan to address once I get to Washington.  But on an individual level, U.S. consumers have been extremely irresponsible as well.  In fact, one new survey has found that more than 80 percent of […]

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Inflation Flaring Up, Dollar Resuming Decline; Powell: Governments Are LYING about Their Gold Activities

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason. Coming up we’ll hear a tremendous interview with Chris Powell of the Gold Anti-Trust Action Committee. Chris gives perhaps the most thorough explanation of why governments are so intent on manipulating the precious metals markets and reveals some very interesting recent data about what they’ve quietly been doing. Don’t miss conversation with Chris Powell of GATA, coming up after this week’s market update. Metals markets rallied strongly this week across the board, with copper surging 7% higher and gold rallying back up toward key levels on the charts. As of […]

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The Fed Targets Stock Prices – Here’s Why

The week before the Dow/SPX quickly plunged 10%, the Fed had reduced its SOMA account (the SOMA account is its “QE” account) by $ 21 billion.  Just as quickly as the stock market dropped, it has sharply recovered more than half of its losses from the previous week. As it turns out, the Fed added $ 11 billion back to its SOMA account. That’s an $ 11 billion injection of cash directly into the banking system.  Clearly the Fed’s actions were a large factor in the 10% plunge and the subsequent bounce. The Federal Reserve is targeting stock prices with […]

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