COMMENT: Marty; You have beaten Soros. Don’t know if you have seen this, but they now report “George Soros finishes his crash bets against the US stock market. The investor legend seems to have lost its way and acts with little fortune. Now he has to reveal himself.”
REPLY: Interesting. Soros became famous with the bet against the pound. But let’s make this very clear. That was a “riskless” trade betting against the break of a peg. If you are wrong, the peg holds and you get your money back. If you are right, you make a fortune. Everyone was betting against the pound. That was the coup against Margaret Thatcher who really wanted to take Britain into the euro. They forced the pound into the Exchange Rate Mechanism (ERM) and placed it at a high rate became Europeans still think the higher the currency the stronger the economy, which results in deflation. That was an easy trade. It is no different from going to a casino and betting or red or black and when you lose, they give your money back until you win.
Soros is old school. He still believes in the Quantity Theory of Money and has been a punter short-term, but when it comes to long-term strategy, sorry, I do not believe he actually grasps the entire picture.
Anyone who has been bearish on the US stock market since 2010 constantly calling every new high the final high, is attempting to forecast with personal opinion. That will not survive the type of move we have been in since the 2009 low. Even Barron’s laughed at out forecast that the Dow would make new highs back in June 2011. All of these people (MAJORITY) totally misconstrue even how the economy really functions because they are still influenced by the theories that were indoctrinated into in school after the 1930s. They obviously lacked the curiosity to challenge what was being taught and look with open eyes and mind and simply ask – Did it work?