George Soros has big end of year loss but is still in the black for 2016

Carl Icahn is considered by some to be one of the greatest investors who ever lived, possibly even more successful than the Oracle of Omaha Warren Buffett.

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Icahn has placed many trades over his career, but his trade since the November presidential election have turned out to be some of the most successful ever. Even though Icahn was relatively well positioned for a Trump victory heading into the vote (Icahn Enterprises’ investments are heavily weighted towards energy and other cyclical sectors [Disclosure: the author is long Icahn Enterprises]) it was the billionaire’s actions immediately after the result of the vote became known that have produced the best pay off.

George Soros Quantum Fund
George Soros Photo by Norway UN (New York)

In an interview with Bloomberg on November 9, Icahn revealed that he had left President-elect Trump’s victory party in the early hours of the morning to buy about $1 billion in US equities.

“I thought it was absurd that the market, the S&P was down 100 points on Trump getting elected,” Icahn said in a phone interview. “I tried to put a lot more to work, but I couldn’t put more than about a billion dollars to work,” he said. Even though Icahn has come out more recently to say that he believes the market is now overvalued, this one billion dollar trade has almost certainly generated hundreds of millions of dollars in additional profit for the former corporate raider.

Soros Loses $1 Billion Betting Against Trump

As Icahn has profited, the Wall Street Journal reports today that another infamous billionaire has lost big following Trump’s surprise election. It is reported that George Soros, who returned to trading at Soros Fund Management LLC (which manages his $30 billion fortune) earlier this year has incurred losses approaching $1 billion by betting against the markets in the wake of Trump’s win. However, while Soros’ specific bearish bets failed to pay off, the overall fund ended up for the year:

“The broader portfolio held by Mr. Soros’s firm performed better, posting profits before and after the election from long-held investments in sectors including financials and industrials, according to people familiar with the firm. Those gains helped Soros Fund Management gain about 5% on the year.”

In a rather interesting twist, the Journal also reports that Soros' former protege, Stanley Druckenmiller, who was extremely bearish but in 2016 but reversed his views heading into the election, made a healthy profit off the outcome. Druckenmiller told CNBC a day after the election that he had sold all of his gold on the night of the election and exited bearish positions, becoming bullish on some sectors the stock market. According to people with knowledge of the matter, these bets helped Druckenmiller’s firm, Duquesne Family Office LLC, gain more than 10% in 2016.

Michael Vachon, a spokesperson for Soros Management did not immediately respond to a request from ValueWalk for comment.