Recent news accounts have revealed some interesting information about the precious metals investment perspectives of three of the world’s richest men.
Two of them, George Soros and John Paulson, are very bullish on gold, and have put their money where their mouths are, while a third billionaire, Warren Buffet, remains as skeptical as ever about gold.
George Soros
Hungarian-born investor, philanthropist, and hedge fund manager, George Soros, is probably most famous for having bet against the British pound in 1992. His actions allegedly netted him about $1 billion in one trading day.
Mr. Soros’ views on the wisdom of investing in precious metals have evolved since last year when he was skeptical about gold’s future.
Last year we read that he had reduced his holdings of gold and argued that it is a bubble. But this year he believes that global economic and financial uncertainty will keep prices high. He recently increased his investments in the SPDR gold-backed ETF, or exchange-traded fund.
Mr. Soros told CNN on February 12 that the European financial crisis has the potential to be far worse than the collapse of Lehman Brothers, and that it could precipitate a global financial meltdown, if not handled right.
The European Union used to be an idea that inspired him and many others, but he now has serious concerns about its future, especially because European authorities still don’t have the tools needed to resolve the crisis.
In an interview in the German magazine, Der Spiegel, he said that German Chancellor Angela Merkel is leading Europe in the wrong direction by focusing too much on austerity and not enough on growth. He also pointed out that Germany was one of the first countries in the euro zone to break the very rules that have gotten Greece in so much trouble.
John Paulson
John Paulson is a billionaire hedge fund manager, who is probably most known for having bet big against the U.S. housing market. He is said to have made billions by doing that, and he has since invested a lot of money in bullion, metal company stocks, and other investments.
Last year his hedge fund performed very poorly because of investments in areas other than metals, and it was reported that he lost a lot of money. But he remained bullish on gold.
Mr. Paulson told French newspapers last year that he believed gold’s price would continue to rise as long as the Federal Reserve continued printing dollars. At the time, though, he said he did not expect another round of QE.
Last year many articles appeared that contrasted the bullish gold position of Mr. Paulson with Mr. Soros’ decision to start selling his gold, but this year they seem to be on the same wavelength.
