mamboni
22nd November 2012, 06:50 PM
The Soros Position Nobody is Talking About (http://bullmarketthinking.com/the-soros-position-nobody-is-talking-about/)
November 21, 2012 | By Tekoa Da Silva | 1 Comment (http://bullmarketthinking.com/the-soros-position-nobody-is-talking-about/#comments)
Just about everyone in the gold and money management communities, is aware that billionaire George Soros’ hedge fund, Soros Fund Management LLC, is heavily invested in gold and gold mining equities. Additionally, in the past few days, a flurry of new articles have been written, detailing the Soros Fund’s most recent 13-f filing (http://www.sec.gov/Archives/edgar/data/1029160/000101143812000346/form_13f-soros.txt). In case anyone is unfamiliar, a 13-f filing is a document which contains a fund’s investments held during a financial quarter, and when we compare a recent 13-f (http://www.sec.gov/Archives/edgar/data/1029160/000101143812000346/form_13f-soros.txt) with a previous 13-f (http://www.sec.gov/Archives/edgar/data/1029160/000101143812000287/form_13f-soros.txt), we can see the buying and selling activities of a fund during a given time frame.
In the most recent 13-f filing on November 14th, the Soros fund increased its position in gold via the GLD fund from 884,400 shares, to 1.3+ million shares. That represents a sum of about $200 million. The fund increased its position in the GDX gold miners ETF from 1 million shares, to over 2.3 million, it added a 1.7 million share position in Kinross Gold, and finally, maintained a nearly 2.4 million share position in the GDXJ junior gold miners ETF.
But it seems I left something out. Along with all the other financial news editors.
The Soros Fund added what appears to be a $9 million call option position on the GDX.
http://bullmarketthinking.com/wp-content/uploads/2012/11/calls.jpg (http://bullmarketthinking.com/wp-content/uploads/2012/11/calls.jpg)
What might that mean?
Well, it could mean a few things. It could mean that George Soros and his fund management team listen closely when a 100 year old man speaks (http://bullmarketthinking.com/we-must-listen-when-a-100-year-old-man-speaks/). It might also mean the team felt that gold mining equities were extremely undervalued on a short term basis…and it might also mean the team sees money to be made over the next 6-12 months, via a sharp move higher in the GDX.
One thing we do not know, is the expiration date and strike price of the options. However, given the size of the fund, and size of the option position, it’s very unlikely that the options are short-term(less than 6 months), and due to necessary volume to fill such a position, they are likely “close to the money”—to use a piece of option jargon.
It’s encouraging to see one of the world’s most successful billionaire investors moving cash into the gold mining equity space, especially during a time in which many a smart market commentator has pounded the table to anyone who will listen, of the value to be had in the sector. There is no doubt great numbers of retail investors have abandoned the mining equity space this year.
We should also note many of the retail and institutional investors who abandoned their ships (positions) over the last six months, may have inadvertently been selling their holdings directly to the Soros Fund Management LLC team.
In betting who will ultimately be right or wrong from a financial perspective, I’ll be placing my bets on the Soros Fund.
Best of luck in the months ahead,
Tekoa Da Silva
http://bullmarketthinking.com/the-soros-position-nobody-is-talking-about/
November 21, 2012 | By Tekoa Da Silva | 1 Comment (http://bullmarketthinking.com/the-soros-position-nobody-is-talking-about/#comments)
Just about everyone in the gold and money management communities, is aware that billionaire George Soros’ hedge fund, Soros Fund Management LLC, is heavily invested in gold and gold mining equities. Additionally, in the past few days, a flurry of new articles have been written, detailing the Soros Fund’s most recent 13-f filing (http://www.sec.gov/Archives/edgar/data/1029160/000101143812000346/form_13f-soros.txt). In case anyone is unfamiliar, a 13-f filing is a document which contains a fund’s investments held during a financial quarter, and when we compare a recent 13-f (http://www.sec.gov/Archives/edgar/data/1029160/000101143812000346/form_13f-soros.txt) with a previous 13-f (http://www.sec.gov/Archives/edgar/data/1029160/000101143812000287/form_13f-soros.txt), we can see the buying and selling activities of a fund during a given time frame.
In the most recent 13-f filing on November 14th, the Soros fund increased its position in gold via the GLD fund from 884,400 shares, to 1.3+ million shares. That represents a sum of about $200 million. The fund increased its position in the GDX gold miners ETF from 1 million shares, to over 2.3 million, it added a 1.7 million share position in Kinross Gold, and finally, maintained a nearly 2.4 million share position in the GDXJ junior gold miners ETF.
But it seems I left something out. Along with all the other financial news editors.
The Soros Fund added what appears to be a $9 million call option position on the GDX.
http://bullmarketthinking.com/wp-content/uploads/2012/11/calls.jpg (http://bullmarketthinking.com/wp-content/uploads/2012/11/calls.jpg)
What might that mean?
Well, it could mean a few things. It could mean that George Soros and his fund management team listen closely when a 100 year old man speaks (http://bullmarketthinking.com/we-must-listen-when-a-100-year-old-man-speaks/). It might also mean the team felt that gold mining equities were extremely undervalued on a short term basis…and it might also mean the team sees money to be made over the next 6-12 months, via a sharp move higher in the GDX.
One thing we do not know, is the expiration date and strike price of the options. However, given the size of the fund, and size of the option position, it’s very unlikely that the options are short-term(less than 6 months), and due to necessary volume to fill such a position, they are likely “close to the money”—to use a piece of option jargon.
It’s encouraging to see one of the world’s most successful billionaire investors moving cash into the gold mining equity space, especially during a time in which many a smart market commentator has pounded the table to anyone who will listen, of the value to be had in the sector. There is no doubt great numbers of retail investors have abandoned the mining equity space this year.
We should also note many of the retail and institutional investors who abandoned their ships (positions) over the last six months, may have inadvertently been selling their holdings directly to the Soros Fund Management LLC team.
In betting who will ultimately be right or wrong from a financial perspective, I’ll be placing my bets on the Soros Fund.
Best of luck in the months ahead,
Tekoa Da Silva
http://bullmarketthinking.com/the-soros-position-nobody-is-talking-about/