Reports are showing that George Soros and John Paulson have been adding gold to their portfolios. Both billionaires are famous for their big, risky bets that often pay off — netting them not just thousands and millions, but actual billions in returns.
John Paulson has increased his exposure to gold 44%. He sold some of his gold stocks and picked up more of NovaGold Resources Inc and bought some of the gold ETF GLD.
George Soros, infamous for breaking the Bank of England years ago with a big bet, tripled his position in gold, bringing his stake up to over $133 million in the gold ETF.
Their Strategy: A Gold ETF
Both billionaires have put their money, not just into physical bullion under direct ownership, but in the SPDR Gold Trust. This is essentially “paper” gold, and while in the short run it essentially tracks the price of gold, many people — like yours truly — would far rather own it in physical form.
Remember, gold is a security bet. It’s an alternative to the world’s currencies, and if the price ever explodes because of the fundamentals, that means the world will be experiencing major havoc. “Paper” gold could very well be worthless, especially if the economic problems causing gold’s run up happen suddenly.
Buying In Physical Form
It’s very likely that George Soros isn’t betting on the end of the world or anything along those lines. He’s a trend writer. I just finished reading his book “The Alchemy of Finance”, and he goes through his elaborate system of investing based on trends. This means he’s riding the gold trend — not that he’s necessarily buying beans and bullets.
I think George Soros is, being a leftist, not likely rooting for a return to the gold standard.
Because of this, yes, his investment choice is going to look a little different. For us, buying in physical form is likely a better choice than making large paper bets.
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