George Soros nearly doubled his downside protection, increasing S&P 500 (.INX) put protection in the portfolio by 154% in the fourth quarter, owning $1.3 billion worth of stock market insurance, up from $470 million, according to Friday’s 13F filings. A put option would rise in value if the S&P 500 (.INX) were to fall in price. The S&P dropped from an all-time high at 1850 down to 1740 in January before rebounding. It is unknown if Soros sold his puts during this period of time, as the 13F reports are 45 days old.
But is this really a sign the legendary investor sees the world as falling apart?
With nearly 11.3% of his portfolio in put protection, Soros remains long the equity markets. In fact the current put holding is down from 13.54% of the portfolio in the second quarter, according to the SEC filing. Far from predicting doomsday, Soros’s S&P put position appears to be a relatively normal market adjustment, particularly given his recent portfolio additions. Soros Fund management also initiated positions in Citigroup Inc (NYSE:C) and JPMorgan Chase & Co. (NYSE:JPM), the 13F report revealed.
Bank holdings indicate confidence in markets
If the fund manager was concerned with doomsday, why would he open a position in firms that have significant exposure to OTC derivatives that could implode in a debt crisis? Soros also exited his investment in Chevron Corporation (NYSE:CVX) and cut his holdings in Herbalife Ltd. (NYSE:HLF) and J.C. Penney Company, Inc. (NYSE:JCP), according to the filling. In late December ValueWalk reportedSoros’s position in FedEx Corporation.
Soros has over 237 stock positions in his portfolio, with 77 new stocks as of the recent 13F. His typical portfolio turnover is near 30%, portfolio watchers note.
Soros among leaders in long term performance
Soros has among the top long-term record in percentage terms of any manager of a publicly held portfolio investment pool: about 34 percent per annum compounded for some nineteen years, as pointed out on ValueWalk recently. In 2013 Soro’s Quantum Endowment fund had its second best year, up 19% with 28.6 billion under management. George Soros and his Quantum fund are best known for triggering the collapse of the British pound in 1992, which generated over $1 billion in revenue for the fund and firmly placed George Soros among the legendary traders in the category of gutsy trades.
Soros changed the structure of his fund to a family office to avoid regulatory scrutiny recently. Soros’s personal life has recently been in the spotlight, as he is the subject of a New York lawsuit by a former girlfriend who claims she was promised a New York City condominium.