Who Is 'George Soros'

George Soros is a famous 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. Besides his investing prowess, the Hungarian born Soros is also known for his vast philanthropic activities and has donated billions of dollars to various causes through the Soros Foundation. Thought to have retired from investing, The Wall Street Journal announced that Soros was once again trading in 2016 through his family office Soros Fund Management LLC.

Breaking Down 'George Soros'

George Soros is most famous for his single-day gain of $1 billion on September 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 system that included other European countries. The other countries were pressuring England to devalue its currency in relation to the other countries in the system or to leave the system. England resisted the devaluation, but with continued pressure from the fixed system and speculators in the currency market, England floated its currency and the value of the pound suffered. By leveraging the value of his fund, Soros was able to take a $10 billion short position on the pound, which earned him $1 billion. This trade is considered one of the greatest trades of all time, and Soros is often credited as the man who broke the Bank of England.

Recently, Soros has been very vocal about the future of the European Union. Following the Brexit vote of 2016 and the refugee crisis that has brought millions of people into European countries from war-torn areas of the middle east, Soros has warned of the "existential crisis", facing Europe. He has set forth a plan to rescue Europe from a pending crisis by tackling the refugee crisis, territorial break-ups like Brexit, and the austerity crisis that has plagued countries like Italy and Spain. 

George Soros' Investment Style

George Soros is unique among highly successful investors in that he allows instinct to play a large role in his investment decisions. Soros is famously well informed about economic trends on a regional and global level and he uses 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 many other hedge funds. 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 monikers 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 any 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 — basically anyone without the last name Buffett — can match. 

RELATED TERMS
  1. Black Wednesday

    Black Wednesday refers to September 16, 1992, when a collapse ...
  2. Net Short

    Net short is a portfolio or trading position leveraged to an ...
  3. Reflexivity

    Reflexivity is the theory that investors' perceptions affect ...
  4. Super Currency

    A super currency would replace the U.S. dollar as the world's ...
  5. European Currency Unit - ECU

    The European Currency Unit was the official monetary unit of ...
  6. Economic Refugee

    An economic refugee is a person who leaves his or her home country ...
Related Articles
  1. Investing

    Where Does George Soros Keep His Money?

    Learn about where George Soros keeps his massive fortune. Discover how Soros has supported various candidates and political causes during his career.
  2. Investing

    Soros Upends Portfolio, Makes Big Bets on Info Tech

    Soros Fund Management upended its portfolio in Q1, with info tech getting the bulk of the attention.
  3. Investing

    George Soros Bets Against Trump: 13F

    Some of Soros' holdings are likely to profit if stocks fall as a result of uncertainty surrounding President Trump.
  4. Insights

    Soros Failed to Short Pound for Brexit

    Legendary Investor George Soros Still Profited From Brexit Because of His Bearish Outlook on World Markets
  5. Financial Advisor

    George Soros Worried about China's Financial System

    George Soros is concerned about Chinese credit markets, likening China's current situation to that of the US just prior to the 2007 credit crunch.
  6. Investing

    George Soros Adds Facebook, Apple, Twitter: 13F

    Billionaire George Soros also trimmed stacks in Amazon and Alphabet last quarter.
RELATED FAQS
  1. How did George Soros break the Bank of England?

    George Soros pocketed $1 billion by betting against the British pound, cementing his reputation as the premier currency speculator ... Read Answer >>
  2. How is Warren Buffett Plan bequeathing his estate?

    Find out how much Warren Buffett is leaving for his heirs and how he wants the funds invested after his death. Read Answer >>
  3. What are the typical day-to-day responsibilities of a Chief Operating Officer (COO)?

    Learn how a country's debt crisis affects the world, including how currency values, inflation and output are affected on ... Read Answer >>
  4. What currency is affected by the interest rate decisions of the Bank of England (BoE)? ...

    The Bank of England (BoE) is responsible for the interest rate decisions that affect the economy of Great Britain. As with ... Read Answer >>
  5. Has the Efficient Market Hypothesis been proven correct or incorrect?

    Explore the efficient market hypothesis and understand the extent to which this theory and its conclusions are correct or ... Read Answer >>
Trading Center