Time Value of Money
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Hall of Fame
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George Soros

George Soros was born in 1930 in Budapest, Hungary. In 1947 he fled Hungary and moved to England. He attended the London School of Economics, graduating in 1952, and went to work for a local investment bank. Soros immigrated to the United States in 1956. He was employed in analyst and investment roles in several of the large New York firms including F.M. Mayer (from 1956 until 1959), Wertheim & Co. (from 1959 until 1963) and Arnhold & S. Bleichroeder (from 1963 until 1973).

He decided to found his own hedge fund company and created Soros Fund Management in 1973. This company would eventually evolve into the successful and well-known Quantum Fund. Soros ran this fund very successfully and aggressively for around two decades. It is reported that he made annual returns of more than 30% and twice his returns were more than 100%.

Soros’ investment style was based on highly leveraging economic trends in bonds and currencies. He was a well-known short-term speculator who gambled large amounts on market directions. He described the markets as chaotic as the currency or security prices were dependent upon the traders that were buying and selling, and these traders will often act according to emotional factors rather than logic. Soros also believed in the herd mentality of the market and the participant’s power to influence each other. He acknowledged that he generally followed the herd, but that he was always looking for the right time to "make a killing." When it came to judging the right time, a lot of Soros’ decisions were instinctive and he once said, "I rely a great deal on animal instincts". This makes his style very difficult for other investors to emulate.

He left the daily management of the fund in the late 1980’s. Soros became famous internationally in September 1992 when he put $10 billion on shortening the British pound in a currency speculation. It was a correct call and resulted in a $1 billion profit in a single day His profit on the entire transaction was reported to have reached almost $2 billion. This transaction earned Soros the nickname of “the man who broke the Bank of England”. Soros is also often credited as causing the 1997 financial crisis in Asia due to a large bet that he placed against the Thai currency.

Soros retired from investment completely in 2000. At this point he was one of the richest people in the world and became heavily involved in philanthropy. He created the Open Society Foundation and used this body to make large charitable donations throughout the world. Soros has also recently become involved in political activism. His concern for human rights is elucidated in the following quote: "Playing by the rules, one does the best he can, irrespective of the social consequences. Whereas in making the rules, people ought to be concerned with the social consequences and not with their personal interests."

He writes and lectures on U.S. involvement in global issues and topics dealing with human rights, education and political freedom. Bryon Wien from Morgan Stanley is quoted as saying: "George opened all of our thinking to macroeconomic theory, and he made globalists of us all by making us understand the importance of geopolitical events on the U.S. economy."

Oxford University recently offered Soros an honorary degree. He was asked how they should describe him and he said: "I would like to be called a financial, philanthropic and philosophical speculator." The phrase “very successful” should be added to this in order to best describe Soros’ life.

George Soros; publications include:

The Alchemy of Finance (Wiley Investment Classics)

Soros on Soros: Staying Ahead of the Curve

Open Society: Reforming Global Capitalism

Bubble of American Supremacy: Correcting the Misuse of American Power

Publications about George Soros include:

Soros: The Life and Times of a Messianic Billionaire

About the author

Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".

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Mark McCracken , All Rights Reserved