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Stan Druckenmiller has made a career out of making big calls and he has just made a huge bet on gold that indicates that he thinks the bottom is finally in. Why should you care? Because he is one of the world’s most successful and respected traders.
- As a hedge fund manager from 1986 to 2010, he generated an incredible average annual return of 30%.
- As George Soros’s right-hand man at Quantum it is said that Quantum’s now legendary 1992 trade shorting the British pound – a trade that “broke the Bank of England.” – was Druckenmiller’s idea and it made Quantum about $1 billion.
The above comments, and those below, have been edited for the sake of clarity and brevity to provide a fast and easy read and have been excerpted from an article* by Dan Steinhart (caseyresearch.com) originally entitled This “Pig” Just Made a Massive Bet on Gold which can be read in its unabridged format HERE.
Specifically, Druckenmiller’s fund has bought $300 million worth of SPDR Gold Trust (GLD), an ETF that tracks the price of gold, which accounts for 20% of his fund’s money and is the fund’s largest position. It’s a huge bet, even for a big-time trader like Druckenmiller.
Conclusion
If you agree that gold is near its bottom, you could buy physical gold or shares of GLD like Druckenmiller. That could easily give you a 50-to-75% gain in the coming years.
If you want a chance at much bigger gains, consider investing in gold stocks. Gold stocks are highly leveraged to the price of gold. In a bull market, gold stocks rise much more than the price of gold. It’s common for the best-run gold companies to increase by 20-to-1 or even 30-to-1 during a gold bull market.
*http://www.caseyresearch.com/articles/this-pig-just-made-a-massive-bet-on-gold-1
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