THE MAN WHO BROKE THE BANK OF ENGLAND
THE WORLD’S GREATEST MONEY MANAGER
-Institutional Investor magazine
A Hungarian born billionaire investor, philanthropist and author
Net Worth: $20 B as of March 2012
George Soros is known for the unmatched success of his Quantum Fund. As a hedge fund guru, he is recognized for having the best performance record of any investment fund in the world over its 26-year history. A mere $1000 invested in 1969 when Soros established the Quantum Fund would have been worth $4 million by the year 2000. During that time, he achieved a cumulative 32% annual return.
* Age: 81
* Source of Wealth: hedge funds, self-made
* Residence: Katonah, NY
* Country of Citizenship: United States
* Education: Bachelor of Arts / Science, London School of Economics
* Marital Status: Divorced
* Children: 5
The American businessperson was once known as “The Man Who Broke the Bank of England” after speculating on the pound sterling. In the early 1990s he believing it was overvalued and by 1992 Soros’ short position earned himself $1.1billion. George Soros is also a generous philanthropist; he has given away millions of dollars every year to the poor and disadvantaged of the world. He also has numerous critics in both finance and politics.
The legendary investor retired last year and turned his hedge fund into a family office, returning just under $1 billion in assets to outside investors. The move means he will not be subject to the hedge fund industry’s new disclosure requirements. He also brought on a new investment officer to help oversee the remaining assets belonging to his family and his foundation.
He reportedly picked up $2 billion of MF Global’s European bonds last year. Outspoken on world economic policies, he recently said he thought Germany’s Chancellor Angela Merkel was leading Europe in the wrong direction and said that the design of the euro was “very flawed.” Soros, who traveled to Myanmar over the holidays, plans to set up a base for his charitable programs in the Southeast Asian nation. Since 1979 he has given $8.5 billion to human rights, education and public health groups. Among his notable gifts in 2011: $95 million was committed to the Institute for New Economic Thinking, a $60 million matching grant was given to Bard College and $30 million to help black and Hispanic youth in New York City.
Soros gained international notoriety when, in September of 1992, he risked $10 billion on a single currency speculation when he shorted the British pound. He turned out to be right, and in a single day the trade generated a profit of $1 billion – ultimately, it was reported that his profit on the transaction almost reached $2 billion.
As a result, he is famously known as the “the man who broke the Bank of England.” Soros is also famous for running the Quantum Fund, which generated an average annual return of more than 30 percent while he was at the helm. Along with the famous pound trade, some have also accused him of being the “trigger” behind the Asian financial crisis in 1997, as he had a large bet against the Thai baht.
He is also widely known for his political activism and philanthropic efforts. Soros fled Hungary in 1947 for England, where he graduated from the London School of Economics in 1952 and then obtained an entry-level position with an investment bank in London. In 1956, he immigrated to the United States and held analyst and investment management positions at the New York firms of F.M. Mayer (1956-59), Wertheim & Co. (1959-63) and Arnhold & S. Bleichroeder (1963-73).
Soros went off on his own in 1973 and founded the hedge fund company of Soros Fund Management, which eventually evolved into the well-known and respected Quantum Fund. For almost two decades, he ran this aggressive and successful hedge fund, reportedly racking up returns in excess of 30 percent per year and, on two occasions, posting annual returns of more than 100 percent.
In the late 1980s, he gave up the day-to-day management of the Quantum Fund and, as one of the wealthiest people in the world, became a substantial philanthropist, donating huge sums worldwide through his Open Society Foundation. In recent years, political activism has also become important to Soros.
He has written and lectured extensively on the role of the U.S. in world affairs as well as issues dealing with, among others, human rights, political freedom and education. When Soros was offered an honorary degree from Oxford University and was asked how he wanted to be described, he is quoted as saying: “I would like to be called a financial, philanthropic and philosophical speculator.” This surely sums up the life of George Soros, particularly if the adjectival phrase “very successful” is added to the description.
Soros was born in Budapest, Hungary on August 12, 1930. In 1947, Soros fled the Soviet Union Communist occupation of Hungary and arrived in England. He then went on to study at the London School of Economics and graduated in 1952. Soros then emigrated and settled in the United States of America in 1956.
Soros survived the Nazi occupation of Hungary during World War II as well as the postwar imposition of Stalinism in his homeland. Before graduating from the London School of Economics in 1952, Soros studied Karl Popper’s work in the philosophy of science as well as his critique of totalitarianism.
The critique, also know as, The Open Society and Its Enemies, maintains that no philosophy or ideology has the final word on the truth and that societies can only flourish when they allow for democratic governance, freedom of expression, a diverse range of opinion, and respect for individual rights.
Soros’ father, Tivadar was an Esperantist writer and taught his son to speak Esperanto from birth. Soros later said that he grew up in a Jewish home and that his parents were cautious with their religious roots. Soros was thirteen years old in March 1944 when Nazi Germany occupied Hungary. Soros took a job with the Jewish Council, which had been established during the Nazi occupation of Hungary to carry out Nazi and Hungarian government anti-Jewish measures.
Soros later described this time to writer Michael Lewis:
“The Jewish Council asked the little kids to hand out the deportation notices. I was told to go to the Jewish Council. Moreover, there I was given these small slips of paper … It said report to the rabbi seminary at 9 am .And I was given this list of names. I took this piece of paper to my father. He instantly recognized it. This was a list of Hungarian Jewish lawyers. He said, “You deliver the slips of paper and tell the people that if they report they will be deported.”
Later that year, at age 14, Soros lived with and posed as the godson of an employee of the Hungarian Ministry of Agriculture. The official once was ordered to inventory the remaining contents of the estate of a wealthy Jewish family that had fled the country; rather than leave the young Soros alone in the city, the official brought him along. The next year, 1945, Soros survived the Battle of Budapest, in which Soviet and German forces fought house-to-house through the city.
Soros immigrated to England in 1947 and, as an impoverished student, lived with his uncle, an Orthodox Jew. His uncle paid his living expenses while he attended the London School of Economics, where he received a Bachelor of Science in Philosophy in 1952.
While a student of the philosopher Karl Popper, Soros worked as a railway porter and as a waiter. A University tutor requested aid for Soros, and he received GB£40 from a Religious Society of Friends (Quaker) charity.
In a discussion at the Los Angeles World Affairs Council in 2006, Alvin Shuster, former foreign editor of the Los Angeles Times, asked Soros, “How does one go from an immigrant to a financier? When did you realize that you knew how to make money?”
Soros replied, “Well, I had a variety of jobs and I ended up selling fancy goods on the sea side, souvenir shops, and I thought, that’s really not what I was cut out to do. So, I wrote to every managing director in every merchant bank in London, got just one or two replies, and eventually that’s how I got a job in a merchant bank.” That job was an entry-level position in Singer & Friedlander.
Later, while working as a financial analyst and trader in New York, Soros adapted Popper’s thinking in developing his own application of the social theory of “reflexivity,” a set of ideas that seeks to explain how a feedback mechanism can skew how participants in a market value assets on that market.
After concluding that he had more talent for trading than for philosophy, Soros began to apply his ideas on reflexivity to investing, using it to predict, among other things, the emergence of financial bubbles. In 1967, he helped establish an offshore investment fund. In 1973, he set up a private investment firm that eventually evolved into the Quantum Fund, one of the first hedge funds.
Soros’s memories of anti-Semitism in wartime Hungary prompted him, in 1979, to begin providing financial support for black students at the University of Cape Town in apartheid South Africa. In 1984, Soros created an education and culture foundation in Hungary. He later supported dissident movements in Eastern Europe’s other Communist countries. The movements helped people organize themselves at a time when popular organizations were banned,voice their opinions when dissonant opinions were considered anti-state propaganda, and promote tolerance, democratic governance, human rights, and the rule of law when a one-party dictatorship exercised a monopoly on power.
As the East bloc crumbled during the late 1980s and the Soviet empire collapsed in the early 1990s, Soros expanded his funding in an effort to help create open societies in all of the region’s countries. He demonstrated his commitment to critical thinking and democratic political development by establishing the Central European University in 1991. In 1993, he founded the Open Society Institute.
Over the past three decades, Soros’s philanthropy has spawned a network of foundations dedicated to promoting development of open societies in Africa, Asia, Europe, Latin America, and the United States. To date, Soros has given over $8 billion to support human rights, freedom of expression, and access to public health and education in 70 countries.
GEORGE SOROS AS AUTHOR
Soros has written several books, including Opening the Soviet System (1990; rev. ed. 1991), The Alchemy of Finance (1994), The Crisis of Global Capitalism (1998), Open Society: Reforming Global Capitalism (2000), and The Bubble of American Supremacy: Correcting the Misuse of American Power (2003).
Upon moving to America, Soros set up an investment fund that went on to create his massive fortune. It was his intention to support his love of writing from his Wall Street earnings, but his well-timed investment decisions saw his wealth increase dramatically each year. The Quantum Fund went on to become one of the most successful managed investment funds ever, with a more than 30 percent increase annually over a 30-year period.
Soros also gained many critics along his path to financial success. Through his International currency speculating he was once given the nickname of “the man who broke the bank of England” from a deal that earned him more than one billion U.S. dollars. He has also been accused of negatively affecting the Malaysian ringgit during the Asian financial crisis through his aggressive currency speculation.
The American billionaire is also a very active philanthropist that is willing to use his money to fund causes that he believes in. Since 1979, he has been supporting and funding various organizations and activities worldwide. His first charitable actions helped to fund black students in the University of Capetown in South Africa during apartheid. Soros is founder and chairperson of the Open Society Institute, an organization that supports activities in more than 50 countries worldwide.
Soros is also the author of several books on the economy and politics. He first entered the business world to fund his passion for writing and philosophy. He continues to fulfill this passion with more than eight published books. During the 2004 American election year, Soros rose to fame with his criticism of George W. Bush. Although not usually known for his participation in politics, Soros believed that the direction the Bush government had been taking America was dangerously wrong. He contributed more than 15 million dollars to oust President Bush. Soros commented “it is the central focus of my life” and “it is a matter of life and death”.
As president of the Soros Management Fund, he has used his wealth to create a network of wealthy foundations, many of which are intended to aid former Communist countries in creating the kind of anti-Marxist “open society” advocated by Popper. Others fund health initiatives and aid immigrants in the United States. He also established (1991) the Central European Univ., based in Budapest. In the United States, he has funded political campaigns, most notably by organizations opposed to President George W. Bush.
Did you know that a $1,000 investment with George Soros in 1969 would have been worth about $4 million by the year 2000? For more than three decades, this maverick hedge fund manager generated 30.5% average annual returns, after management fees. Investors revere his flagship Quantum Fund.
Despite the animosity generated by his trading tactics and the controversy surrounding his investment philosophy, Soros spent decades at the head of the class among the world’s elite investors. In 1981, Institutional Investor magazine named him “the world’s greatest money manager.”
HIS BUSINESS PHILOSOPHY
George Soros is a short-term speculator. He makes massive, highly leveraged bets on the direction of the financial markets. His famous hedge fund is known for its global macro strategy, a philosophy centered around making massive, one-way bets on the movements of currency rates, commodity prices, stocks, bonds, derivatives and other assets based on macroeconomic analysis.
Simply put, Soros bets that the value of these investments will either rise or fall. This is “seat of the pants” trading, based on research and executed on instinct. Soros studies his targets, letting the movements of the various financial markets and their participants dictate his trades. He refers to the philosophy behind his trading strategy as reflexivity. The theory eschews traditional ideas of an equilibrium-based market environment where all information is known to all market participants and thereby factored into prices. Instead, Soros believes that market participants themselves directly influence market fundamentals, and that their irrational behavior leads to booms and busts that present investment opportunities.
GEORGE SOROS BOOKS
GEORGE SOROS QUOTES
1. It is not whether you are right or wrong that is important, but how much money you make when you are right and how much you lose when you are wrong.
2. I rely a great deal on animal instincts.
3. 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.
4. 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. (Byron Wien, Morgan Stanley)
5. My approach works not by making valid predictions but by allowing me to correct false ones
6. The secret to my success is that I know that I will be wrong. I consider it strength to admit my mistakes. That allows me to stay in the game and fight another day
7. If investing is entertaining, if you are having fun, you are probably not making any money. Good investing is boring
8. An open society is a society which allows its members the greatest possible degree of freedom in pursuing their interests compatible with the interests of others
9. Bush’s war in Iraq has done untold damage to the United States. It has impaired our military power and undermined the morale of our armed forces. Our troops were trained to project overwhelming power. They were not trained for occupation duties.
10. I am not doing my philanthropic work, out of any kind of guilt, or any need to create good public relations. I’m doing it because I can afford to do it, and I believe in it.
GEORGE SOROS IN NEWS
1. Steven Cohen, George Soros, John Paulson Bought New Stocks
2. Why Buffett and Soros Love DirecTV
3. Top Sells from George Soros
4. Soros, Nomura Reduce Holdings in Taiwan Bank
5. George Soros — the rich man who is hated around the world http://www.foxnews.com/opinion/2012/02/27/george-soros-rich-man-who-is-hated-around-world/
6. Soros, others set to cash in on Natural Gas Act payday http://www.humanevents.com/article.php?id=50010
7. George Soros Built Google Stake While Cutting Amazon
8. Soros apartment promise suit bogus: lawyer http://articles.nydailynews.com/2012-02-29/news/31108900_1_george-soros-billionaire-philanthropist-lawyer
9. Soros Says Greek Bailout Not Enough to Rid Europe of ‘Danger’ http://www.businessweek.com/news/2012-02-13/soros-says-greek-bailout-not-enough-to-rid-europe-of-danger-.html
10. Soros Sees Merkel Shoving Europe Into ‘Deflationary Debt Trap’ http://www.bloomberg.com/news/2012-02-23/soros-sees-merkel-shoving-europe-into-harsh-deflationary-spiral-books.html
11. Soros Makes Waves Again
12. George Soros Buys Google and Comverse Tech
13. Dalio takes hedge crown from Soros
14. George Soros gives $500,000 to effort to narrow three-strikes law http://latimesblogs.latimes.com/california-politics/2012/02/soros-three-strikes.html
15. “Revolution From Above: Manufacturing ‘Dissent’ in the New World Order” http://www.foreignpolicyjournal.com/2012/03/10/review-revolution-from-above-manufacturing-dissent-in-the-new-world-order/
GEORGE SOROS IN ARTICLES
1. George Soros
2. George Soros | Open Society Foundations – OSF
3. George Soros – Forbes
4. George Soros predicts riots, police state and class war for America http://rt.com/usa/news/george-soros-class-war-619/
5. George Soros: Top 10 Reasons He Is Dangerous – HUMAN EVENTS http://www.humanevents.com/article.php?id=42674
6. George Soros – Project Syndicate
7. George Soros is REALLY George Schwartz and 10 More Terrifying things we learned from Glenn Beck’s Expose
8. George Soros Portfolio – 2012 Stock Picks and Performances http://www.gurufocus.com/StockBuy.php?GuruName=George+Soros
9. George Soros
10. Who Is George Soros? « Thoughts of A Conservative Christian http://bsimmons.wordpress.com/2010/06/24/who-is-george-soros/
11. Articles & Essays | George Soros
12. George Soros – International Crisis Group
13. George Soros
14. George Soros – News, Articles, Biography, Photos – WSJ.com http://topics.wsj.com/person/S/george-soros/209
15. Davos 2010: George Soros warns gold is now the ‘ultimate bubble http://www.telegraph.co.uk/finance/financetopics/davos/7085504/Davos-2010-George-Soros-warns-gold-is-now-the-ultimate-bubble.html
GEORGE SOROS IN VIDEOS
1. Neil Cavuto’s interview of George Soros
2. Your Enemy: George Soros
3. George Soros on the New Paradigm for Financial Markets http://mitworld.mit.edu/video/633
4. George Soros: China will be the NEW world revered Crruncy http://www.youtube.com/watch?v=JJVZ8sf6uBI
5. Authors@Google: George Soros
6. George Soros exposed! – YouTube
7. 9-21-11: George Soros Predicts Economic Collapse http://www.youtube.com/watch?v=rhlOqO-HeQs
8. George Soros Says China’s Inflation Is `Serious Concern http://www.youtube.com/watch?v=z_ajJmAF2aU
9. George Soros remarks at the World Economic Forum 2012 http://www.youtube.com/watch?v=PVhhKluktmk
10. George Soros on Housing Prices June 2006
11. George Soros NEW WORLD ORDER! China must be brought in! Orderly Decline of Dollar!
12. CEU founder George Soros delivers public lecture on Euro crisis http://www.youtube.com/watch?v=1lI3mdtSeRA
13. George Soros Endorses Mitt Romney
14. George Soros — Obama’s Boss — America’s– Communist Leader– Commie Tunes 13
15. George Soros looks to establish new global finance system