George Soros, Founder of Soros Fund Management, established in 1969, manages approximately $30 billion in Soros family money, although about half the money is distributed to other hedge funds and investment firms. Soros, known as a financial genius was originally from Hungary and fled to England when the Nazi’s took over Hungary. In England, George Soros was able to continue his education in finance, graduating from the London School of Economics. As soon as he could manage to leave England, he came to the United States where he continued his education in finance and began to grow his wealth using his wealth of education to create a financial wealth and build his legacy.
Just a few days ago reported by The Street, Soros announced he had dumped investments in Chevron (CVS), Chesapeake Energy (CHK), and NRG Energy (NRG). Soros feels the energy prices this year have been extremely unsteady. In an attempt to raise oil prices Saudi Arabia and Russia agreed to an oil production freeze attempting to raise oil prices, but this failed as Iran rejected the freeze and they hold one-fifth of the oil reserves in the world. Another revenge tactic of Iran over the recent sanctions applied. Investors are bewildered, baffled, and befuddled over what they should do next. Should they follow the leader, or take another road to reach their financial goal?
Goldman Sachs reports that when oil prices dip low for extended periods of time, the pain is shared beyond the energy companies themselves. What this shared pain tells us that the investor will feel the effects of the low oil prices, and the earnings reports expected to come out at the end of February, will probably be enough gloom and doom to get every investor’s attention.
Investors are still questioning where this unpredictable energy sector will drive stocks. The crude oil has declined more than 75%, and the broader markets have been sucked into the downdraft. The United States spends over $1.4 trillion on energy. The energy industry in the U.S. supports the livelihoods of more than nine million jobs; this equates to over 5% of the U.S. employment.
The concerns are not only with petroleum and natural gas, but the Baker-Hughes Rig Count is due to be released, and there will be an abundance of interest in the results of this report. Let’s not forget the strategic move of George Soros in 1992, remember “Black Wednesday?” The currency crisis hit the U.K. when Soros, known as “The Man Who Broke The Bank of England” made a short sale of $10 billion worth of British pounds.
Watch for the energy sector operating reports expected to be released. The reports surely provide the information investors are looking for to give them direction for future endeavors.