Who Is George Soros?
George Soros is a legendary hedge fund manager who is widely considered to be one of the most successful investors of all time. Soros managed the Quantum Fund, a fund that achieved an average annual return of 30% from 1970 to 2000. He remains the chair of Soros Fund Management LLC.
- George Soros rivals Warren Buffett for the title of most successful investor of all time.
- He has plowed most of his vast fortune into philanthropic activities.
- His support for progressive causes has made him a target of right-wing conspiracy theories.
The Hungarian-born Soros is also known for his vast philanthropic activities. He has donated billions of dollars to various causes through the Open Society Foundations. He is a longtime champion of liberal and progressive causes, making him a target of a variety of conservative conspiracy theories.
Soros is believed to be worth more than $8 billion as of 2020 but has donated more than $30 billion to charitable causes. Much of that money went to fund education and health programs, human rights, and the furtherance of democracy. In recent years, he has donated lavishly to the Democratic Party in the U.S.
George Soros In Depth
Soros, who is of Jewish descent, was born in Budapest in 1930 and survived the Nazi occupation of Hungary, emigrating to England in 1947. He earned a doctorate from the London School of Economics before embarking on a career in banking. He founded his hedge fund, then called Double Eagle, in 1969.
'The Man Who Broke the Bank of England'
George Soros is most famous for a single-day gain of $1 billion on Sept. 16, 1992, which he made by short-selling the British pound. At the time, England was part of the European Exchange Rate Mechanism, a fixed-exchange-rate agreement among a number of European countries. The other countries were pressuring England to devalue its currency or leave the system. After resisting the devaluation for some time, England floated its currency and the value of the pound dropped.
Using leverage, Soros was able to take a $10 billion short position on the pound, earning him $1 billion. The trade is considered one of the greatest of all time, and Soros was declared to be "the man who broke the Bank of England."
Soros and Brexit
More recently, Soros has been vocal about the precarious future of the European Union in the wake of Britain's 2016 vote to leave the union and the continuing refugee crisis that has brought millions of Middle Eastern refugees to Europe.
Soros warned of an existential crisis facing Europe. He has set forth a plan to rescue Europe from a pending crisis by tackling three major issues: the refugee crisis, territorial break-ups like Brexit, and the austerity crisis that has plagued countries like Italy and Spain.
In particular, he has advocated that the European Union issue perpetual bonds, a method of financing that Britain used to finance the Napoleonic Wars.
Soros was 'the man who broke the Bank of England' before he became 'the man who broke the Bank of Thailand.'
Soros' Investment Style
George Soros is unique among highly successful investors in admitting that instinct plays a large role in his investment decisions. Nonetheless, he is famously well-informed about economic trends on a regional and global level and is known to use this knowledge to exploit market inefficiencies with large, highly leveraged bets.
Soros has both the capital and the risk tolerance to ride out these bets longer than most hedge fund managers. In fact, Soros has cowed a number of national governments on currency issues with his perseverance and deep pockets. During the Asian financial crisis, Soros added to his growing list of nicknames and became "the man who broke the Bank of Thailand."
Despite Soros' deep knowledge of global markets and excellent sources of information, the decision to close out a bet is reportedly more a gut call than a response to a market signal. One popular theory is that Soros has internalized so much of the market and its workings that he instinctively knows when the time has come to close out for a profit long before he can rationalize the decision.
Whether that is true or not, whatever Soros is doing has made him a fortune that few investors in the world with the exception of Warren Buffett can match.