Legendary billionaire investor George Soros, one of my heroes, is out today saying the current financial crisis is the worst since the Great Depression. In an interview in New York yesterday, Soros said: "We had a good bottom," referring to the rally in stocks and the dollar after JPMorgan Chase & Co. agreed to buy Bear Stearns Cos. on March 17. However, Soros believes "this will probably not prove to be the final bottom." The big picture painted by Soros seems in good agreement with the countertrend rally I predicted late last week and posted in Dow: Further Countertrend before Wall Street had the best roaring start of a new quarter in 70 years on last Tuesday, as noted in Dow: Best Start Quarter in 70 Years!. Soros believes the present rally may last 6 weeks to 3 months.
Soros has bet on declines in the dollar, 10-year Treasuries and U.S. and European stocks this year. He expected foreign currencies to rise, as well as Chinese and Indian equities. The latter bet helped Quantum return 32 percent in 2007. Quantum's returns this year have ranged from up 3 percent to down 3 percent.
As for his wagers on developing markets, Soros hasn't abandoned his holdings in India, even with the 22 percent drop in the benchmark Indian index this year.
"The fundamentals remain good," he said. He is less certain about what will happen to Chinese H shares, which trade in Hong Kong. They've fallen 18.5 percent this year.
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