George Soros. The man and the myth
History knows many legendary personalities. Many real-life stories are retold in books and on the pages of the Internet, however, there are figures that are talked about every day. Especially when it comes to the world of finance.
George Soros belongs to these legendary personalities who had previously, now and for years to come will be an example for many traders from around the world. Because, probably, there is no such a person in the civilized world who at least once in his life has not heard about George Soros. The story about Soros is the story of a man who created himself. Let's start with the fact that today George Soros is the world-famous billionaire financier and philanthropist and social activist. We used to perceive him in this way today. However, not many people know how this legend started.
George was born in 1930 in Budapest in the family of middle-class Jews. His father was a publisher and turned a penny as the lawyer. During the Second World War thanks to forged documents made by the father, George and his family emigrated to the UK to escape the repression prepared for the Jews by Nazi Germany. Waiting for the end of the Second World War his family continued to live in the Foggy Albion, where they settled in a suburb of London.
His first education was in the usual London School which he graduated at the age of 17. After school young George went to the London School of Economics, where he studied for three years. During training he tried to earn a living and worked on many low-paying jobs that were not prestigious, starting from the waiter in London bars and apple picker in private gardens.
The graduation from the School of Economics did not bring George any immediate results, because after a long search in the specialty Soros was able to get a position in haberdashery factory as an assistant manager, and his official duties include conveying goods through the city in an old Ford car.
Of course, George knew that this could not be the ultimate dream and all the way tried to get into London banks. However, in the postwar period it was difficult to find work and his efforts ended in nothing.
Finally, in 1953 George Soros was able to get to the arbitration department of the company "Singer and Friedlander," which was close to the London Stock Exchange. Three long years George tried in any way to break through the gray mass of local brokers. However, after futile attempts he decided to move to the United States, taking the advantage of the invitation from the father of his London friend.
George's new place of work was a small brokerage firm in Wall Street, where Soros began to comprehend the wisdom of international arbitration, namely, to buy and resell the securities on the international stock market.
However, the Suetsky crisis at the time made many companies selling securities change their style of work, and George invented a new kind of international trade, namely "domestic arbitration", according to which he sold separately bonds, checks and shares portfolios prior to their formal separation. However, after the administration of John F. Kennedy surcharge on foreign investment, this kind of trade ceased to generate revenues and forced George to change his job. George left the stock trading at all for some time and continued writing his dissertation, which he began at the London School of Economics.
In 1966, Soros was back in business investing in his new business about 100 thousand dollars borrowed from friends. His new place of work was the foundation "Double Eagle", where he began to hold the position of executive director. However, his financial success is seldom connected with this part of his life.
It all started with the creation of hedge fund «Quantum» in 1970, the activities of which brought its owner about 3365% profit per year for ten years. It is this fund for Soros that was a springboard for entry into the global financial elite. Within a few decades George created a few hedge funds in the more specialized areas of finance, which allowed him to significantly increase his capital, which had already increased to epic proportions.
Of course, not everything in the field of finance was smooth for George Soros. In 1997 he made a huge mistake that has resulted in the financing of the Russian company "Svyazinvest", which then survived a crash. In turn, Soros lost a large part of his funds.
However, the succes came to George not only thanks to his development of hedge funds and investment. Soros is primarily known as a financier and philanthropist. His generosity, as well as his income, had no bounds, as George never regretted investing in the development of science and culture.
At the same time in the endless process of making equity, George does not neglect his scientific career that resulted in his work "theory of markets' reflexivity", which even now is used by trade-known punters worldwide.
According to Soros' theory, traders make trading decisions based on their internal assumptions regarding future growth or decline in the asset prices. Taking into account that these assumptions have a purely psychological aspect, it is possible to have an impact on people through the media, rumors and sayings of famous people. In other words, minor rumors that may relate to the negative financial situation one way or another about quite a successful company can significantly slow down its economic growth. At the same time the shares of a not very reliable company under the influence of rumors about its prosperity will be bought at inflated prices.
Of course, George didn't neglect to use insider information in his activities. By the time he had sufficiently extensive contacts among officials and heads of government agencies and committees of the United States. At the same time, probably every trader that has 100% reliable information about the fall or rise of a financial instrument would trade on it and earn without a twinge of conscience.
However, in 2002 against George Soros and other famous people in Paris was held a hearing, in the results of which George was fined to 2.2 million euros for insider shares trading of Societe Generale.
However, the most controversial machination of George was the scheme, according to which the latter brought down the foreign exchange market of Great Britain for more than 1000 points in a few hours. This allowed George to earn more than $ 1 billion in one day. Such a fall in the foreign exchange market of the Foggy Albion is still called "Black Wednesday".
On September 16, 1992, Soros opened a short trade on the pound sterling with the size of the order more than $ 10 billion, in this connection he created another psychological effect (succumbing to panic, many significant market participants have also started selling the pound), through which the national currency of the United Kingdom thrown into the abyss of 1,000 points down. At the same time, the Bank of England had to take urgent measures on currency intervention in the foreign exchange market to stabilize the pound. And the pound sterling had to be withdrawn for a while from the mechanism of the exchange rate regulation in Europe, since the wave of the currency decline could significantly reduce the cost of a pound and the associated with it correlation of the single currency of the European Union.
As a result of his actions Soros made a profit of $ 1 billion and a nickname - "The man who brought down the Bank of England," which has grown to him forever.
Financial greatness of the exchange genius had no impact on his friendliness and desire to communicate with even the most ordinary people. George is a regular participant of various charities and fund social programs for the development of science and culture. To date, nobody has been able to decipher the secret of the winner that accompanied George during his financial development. No one can say exactly who this great man is. However, all people converge in a unanimous opinion - George Soros is one of the most significant figures in the financial world to follow.