Stock Market Crash in 2014 Now Predicted by World’s Largest Investors

Six months ago, I started writing that a stock market crash in 2014 would prove to be increasingly likely this fall, even though I had refused to join the chorus of doom and gloomers who made the same claim for 2013. Now several of the world’s biggest investors appear to be placing major bets on a huge stock market crash being imminent, including some investors who are almost always bullish on the market.

We’ve entered October, and this is the month that has historically seen more major crashes than any other month. So, what are the big names in the world, including those who are usually bullish on the market, saying about a stock market crash in 2014 now that we’ve entered the traditional month of market doom and gloom?

Who are the big names betting on a stock market crash in 2014?

What is Warren waiting for?

Warren Buffett, usually very bullish on the maket, appears to have made an enormous $55 billion bet on an imminent stock market crash in 2014. Not being a doom and gloomer, the bull’s bet looks like this: According to SEC filings, Buffet is now sitting on $55 BILLION dollars in cash. That’s cash that could be invested in the stock market but is not.

Why would the world’s most respected investment mogul choose to keep $55 billion dollars out of the market and just sit on it? This is the biggest cash hoard that Berkshire Hathaway has held during the forty years that Buffet has run the company, so it’s a very strange position for Berkshire Hathaway. At the market’s recent rate of rise, this bet is costing Berkshire Hathaway $29 million a day!

Some say Buffett is saving the cash to invest it in the businesses that Berkshire Hathaway already owns, but then why isn’t he doing that? The cash clearly is not being invested in companies he owns, or he wouldn’t have it to sit on. Why delay with that much cash? It seems clear that he is waiting for the stock market to fall so that he can swipe up huge savings on company purchases when their stock prices plummet? Just look at his own reflection on this:

Says Buffet,

“Just standing there, day after day, with my bat on my shoulder is not my idea of fun.”

And, yet, there he stands, waiting … patiently … like a heron perched on one leg, lurking for the next fish to swim by. Only many fish are swimming around him, but Buffet isn’t striking. I think that’s because Buffet looks for the fat fish — a stock bargain, and the stock market right now is priced to perfection, meaning everything is priced at its maximum actual value. There are no bargains for Buffet to buy. The market has nowhere realistic to go but down. It could still rise on wild speculation, but Warren doesn’t do wild speculative buying. He buys based on solid economic fundamentals.

At the same time, Buffet has been reducing his exposure to stocks that depend on consumer purchasing habits, an indicator that he believes times are going to become tougher for most consumers. Bershire Hathaway has reduced its position in companies that rely on retail sales by 20%.

By George, George isn’t Buying

George Soros is selling the market short. In the past year, Soros has increased his short position in the S&P 500 by 605%. That adds up to the biggest market “put” in Soros’s history! In a short position, someone like Soros borrows stocks that he can sell today and promises to replace them with the same number of shares at a later date. It’s a bet that he can buy those shares at a later date for much less than he sells his borrowed ones for today. Soros has expanded 605% his bet that stocks in the S&P 500 will be cheaper tomorrow (when he has to return shares he borrowed) than it is today.

At the beginning of 2014, Soros had a $1.3 billion position in short options. That was his all-time high until he bettered that by almost double to $2.2 billion in shorts midyear. Doubling down on his bet that the stock market will crash certainly makes it look like he is more certain than ever and that it will happen soon.

Soros came into big acclaim when he made $1 billion on a bet against the British pound in 1992 and won, hugely hurting the British pound. Is this about to become another one of Soros’s famous bets? Bear in mind that Soros’s hedge fund was the best-performing fund in 2013.

Soros is also soaring in gold, which hedge fund managers turn to when times for the stock market look bleak. Looks like Soros is now betting against the stock market in 2014 like he did against the British pound in 1992 because Soros has never bet this big against the stock market.

For more names of those who are showing signs they believe the stock market is in trouble, click

http://thegreatrecession.info/blog/stock-market-crash-in-2014/