U.S. Investing

How George Soros Lost $1 Billion

In the weeks and days preceding November 9, 2016, the day the next president of the United States was elected, markets had been trading in a very cautious pattern.

A close election race combined with a turbulent year for both domestic and foreign stock markets made the election a pivotal time for several major investors who sought to profit handsomely if the election broke a certain way. Many financial gurus and political pundits believed the markets would rise if Hillary Clinton, the candidate representing “more of the same” and a “continuation” of Obama’s policies, won.

Conversely, if the “wild card” candidate, Donald Trump, won, it was widely predicted that stock markets would fall. Some pundits predicted a Trump win might send the markets down sharply.

As we now know, Donald Trump pulled off one of the largest upset victories in recent presidential history. The markets responded by rocketing upwards within hours of his victory of becoming official. As a result, financial gurus and political pundits who had bet against Trump had egg all over their faces that morning, and for some time to come

For instance, Nobel prize-winning economist Paul Krugman was certainly not happy – he had predicted that the stock market would collapse after Trump won. But perhaps the worst decision in this case was made by George Soros, the billionaire investor who was known for his support of Hillary Clinton.

Soros’ biggest claim to fame may be as the clever investor who “broke the bank of England” and made a billion dollars by shorting the British pound in 1992.

But what the gods give, they can also take away.

According to the Wall Street Journal, George Soros lost close to a billion dollars by betting against Trump. Soros is a defender of the “open society” (the name of his foundation). Many of Trump’s views run counter to the idea of an open society.

By contrast, billionaire Carl Icahn made upwards of $700 million on Nov. 9, and John Paulson reaped over $463 million on the same day. No doubt they have made even more since then.

The lesson is clear: Never let politics interfere with your investment decisions. You must always keep your emotions separate from your money.

Mark Skousen

Mark Skousen, Ph. D., is a professional economist, investment expert, university professor, and author of more than 25 books. He earned his Ph. D. in monetary economics at George Washington University in 1977. He has taught economics and finance at Columbia Business School, Columbia University, Grantham University, Barnard College, Mercy College, Rollins College, and is a Presidential Fellow at Chapman University. He also has been a consultant to IBM, Hutchinson Technology, and other Fortune 500 companies. Since 1980, Skousen has been editor in chief of Forecasts & Strategies, a popular award-winning investment newsletter. He also is editor of four trading services, Skousen TNT Trader, Skousen Five Star Trader, Skousen Home Run Trader, and Skousen Fast Money Alert. He is a former analyst for the Central Intelligence Agency, a columnist to Forbes magazine (1997-2001), and past president of the Foundation for Economic Education (FEE) in New York. He has written articles for The Wall Street Journal, Liberty, Reason, Human Events, the Daily Caller, Christian Science Monitor, and The Journal of Economic Perspectives. He has appeared on ABC News, CNBC Power Lunch, CNN, Fox News, and C-SPAN Book TV. In 2008-09, he was a regular contributor to Larry Kudlow & Co. on CNBC. His economic bestsellers include “Economics on Trial” (Irwin, 1991), “Puzzles and Paradoxes on Economics” (Edward Elgar, 1997), “The Making of Modern Economics” (M. E. Sharpe, 2001, 2009), “The Big Three in Economics” (M. E. Sharpe, 2007), “EconoPower” (Wiley, 2008), and “Economic Logic” (2000, 2010). In 2009, “The Making of Modern Economics” won the Choice Book Award for Outstanding Academic Title. His financial bestsellers include “The Complete Guide to Financial Privacy” (Simon & Schuster, 1983), “High Finance on a Low Budget” (Bantam, 1981), co-authored with his wife Jo Ann, “Scrooge Investing” (Little Brown, 1995; McGraw Hill, 1999), and “Investing in One Lesson” (Regnery, 2007). In honor of his work in economics, finance, and management, Grantham University renamed its business school “The Mark Skousen School of Business.” Dr. Skousen has lived in eight nations, and has traveled and lectured throughout the United States and 70 countries. He grew up in Portland, Ore. He and his wife, Jo Ann, and five children have lived in Washington, D.C.; Nassau, the Bahamas; London, England; Orlando, Fla.; and New York. For more information about Mark’s services, go to http://www.markskousen.com/