Billionaire Stanley Drucknemiller Buys Gold
His Largest Position For First Time Ever
Billionaire Stan Druckenmiller’s family office bought gold making it the largest position in his family office trust. After commentating many times the world markets will 'end badly' , he has finally invested heavily into gold.
The former chief strategist for George Soros bought shares of SPDR Gold Trust, an exchange-traded product backed by gold, worth $323.6 million at the end of June, according to a quarterly filing with the Securities and Exchange Commission.
IPM Group Note : SPDR Gold ETF or Physical Gold ?
According to reports from Bloomberg, David Einhorn's Greenlight Capital hedge fund (over US$ 4 billion under management) switched its gold holdings of over 350 million US$ from ETF SPDR Gold Shares (NYSE: GLD) into physical bullion. Einhorn said it is cheaper to keep the gold in a storage facility than the fees paid for the ETF.
We personally wrote about ETF's compared to physical here.
Druckenmiller, who shut his hedge fund firm Duquesne Capital Management in 2010, now manages his own fortune, estimated at $4.4 billion. His fund had one of the best track records in money management, gaining an average of 30 percent per year from its inception in 1986.
Money managers who oversee more than $100 million in equities in the U.S. must file a Form 13F within 45 days of each quarter’s end to list those stocks as well as options and convertible bonds. The filings don’t show non-U.S. securities, holdings that aren’t publicly traded, or cash.
Over the past several years, one of the biggest critics of the Fed's ruinous monetary policy has been billionaire investor Stanley Druckenmiller, who in 2010 announced he would be shutting down his legendary Duquesne Capital Management, and convert it to a family office. Yet, despite his constant drumbeat of warnings that the period of ZIRP/QE/NIPR will end in tears, he had yet to put money where his mouth was (aside for a brief period in mid-2012 when we bought a lot of GLD calls, only to unwind the almost instantly).
This ended on June 30, when following Friday's filing by the Duquesne Family Office, we learned that as of the end of Q2, the largest position for Stanley Druckenmiller was none other than gold, following the purchase of 2.9 million shares of the GLD ETF shares. In other words, as of this moment, gold amount to over 20% of Druckenmiller's total holdings.
In a world in which starved for ideas alpha-chasers do anything and everything that billionaires report they did a month and a half ago, we wonder if this marks the end of the relentless liquidation in the GLD, which recently hit a multi-year low, as a result driving the price of paper gold to multi-year lows even as physical demand has approached record levels.
So with Druckenmiller now back and strapped in for the ride, we wonder which other prominent investor will promptly follow?