In an interview with Italy's La Repubblica, George Soros shared his thoughts on financial markets. The major headline from the interview was that markets are in a bubble fueled by the Federal Reserve's liquidity. He believes the market is going to keep going higher since everyone expects the Fed to keep providing liquidity. And, on the belief that a coronavirus vaccine will be developed and available sometime in the winter.

He believes that the United States is in a better position than the European Union to get through the pandemic given its stronger, economic fundamentals. Although, he was critical of President Donald Trump and believes that Trump is willing to "break democracy" in order to secure his reelection. He doesn't think Trump will be successful and that the U.S. government's checks and balances, system of accountability, and Constitution will prevail. In contrast, the E.U.'s democracy is much more tenuous with a "number of enemies both within and without".

Overall, he was quite dour in his outlook for the world given the pandemic, its economic impacts, and how it's exacerbating inequality in society. He said, "We are in a crisis, the worst crisis in my lifetime since the Second World War. I would describe it as a revolutionary moment when the range of possibilities is much greater than in normal times. What is inconceivable in normal times becomes not only possible but actually happens. People are disoriented and scared. They do things that are bad for them and for the world."

Background

Soros recently turned 90. In recent years, he's become a heavily criticized figure for right wing politics for his support of liberal causes all over the world. Previously, he was known as one of the world's most successful investors especially with his billion-dollar profit when he bet against the pound. He's had a long track record of outperforming the markets, as his fund, Soros Fund Management, had four decades of 20% annual returns.

Soros had a unique, philosophical approach to markets which he laid out in his book. "The Alchemy of Finance". The core of his philosophy is theory of reflexivity. Basically, Soros believes that investors don't make decisions based on reality but instead on their perceptions of reality. However, these decisions do have an impact on reality. In turn, this affects investors' decisions.

Soros believes this is why markets are prone to booms and busts. It's why he's infamous for saying that as soon as he sees a bubble forming, he starts buying, because he believes it will go further than people believe. And busts go below "fair value" or rational measures of prices. Although Soros isn't too active in markets currently, it seems that he would be a buyer of stocks.