According to an article published by The Street, investors may be wary of putting money into, or keeping their investments in energy stocks for much longer. If the reporting is turns out to be accurate, this spells an uncertain trading future in what was often considered a safe investment by even the most successful of investors.
George Soros, famed philanthropic billionaire, had let go of several holdings in the energy sector at the end of 2015. Through the Soros Fund Management, his private investment firm Soros relinquished his holdings in NRG Energy, Chesapeake Energy and Chevron. When it comes to energy markets, few are as big and well known as these three, so why would Soros, a gifted and tested investor, simply walk away from what was likely a sizable portion of his portfolio? Could he know something other investors don’t, and should they follow his lead?
It’s no secret that oil prices have been dwindling over the last two years, performing well under estimates from practically any source worth checking. Conflict in the Middle East between several nations and ISIS have made matters worse, and it seems only Russia and Saudi Arabia have the inclination and ability to cut oil production in hopes of raising the value of their remaining stores. But this hasn’t affected much for the better.
Trouble in this market could be traced back to 2014. Since then, the price of a barrel of oil has plummeted by 73%, which no doubt helped Soros in making his decision to get rid of those stocks. And beyond these markets problems are compounded for the millions of Americans working in the energy sector, making up about 5% of the country’s overall workforce, impacting the nation’s GDP and the economy of interaction nations abroad. How this affects the overall economy could be determined in numbers provided by Goldman Sachs. According to their analyses, consumers in the US devotes a third of all its spending in energy, and a quarter of all research and development projects are dedicated to energy solutions. That’s a great deal of money taken out of circulation with the new price of crude, and if like Soros an investor has money in energy, it may be wise to move it now.
George Soros is a native of Hungary, but fled during the Nazi occupation of his country for the United States. There he had a rough start to a financial career that would eventually progress, making him one of the most successful investors in the world.
Apart from his professional career, Soros has also worked for human rights across the world. With Open Society Foundation, Soros has coordinated with human rights groups, fighting for transparency and against oppression for over forty years.