George Soros was born in Budapest, Hungary in 1930. He grew up during World War II and the Nazi occupation of Hungary, and these early experiences shaped his worldview and his commitment to promoting democracy and human rights. After avoiding persecution during the war, Soros escaped the subsequent communist regime and moved in 1947 to England, where he studied at the London School of Economics.
George Soros then started his career in the financial industry. He worked as a trader and analyst at several London-based firms, where he honed his skills in the field and gained valuable experience in the financial industry. In his early years in London, Soros developed an interest in economic theories and began to understand how they could be applied to the markets. He was particularly interested in the relationship between macroeconomic forces and market prices, and he was committed to using this knowledge to make smart investment decisions.
In 1956, Soros moved to the United States, where he continued to work in the financial industry. In his early years in the U.S., Soros held a few positions, including working as a portfolio manager and analyst at several firms. Throughout this time, he continued to develop his investment philosophy, and he eventually founded Soros Fund Management, which marked the beginning of his rise to prominence as a successful and innovative investor.
How has George Soros made his money?
George Soros first made his fortune through his career as an investor and hedge fund manager. He founded Soros Fund Management in the 1970s and quickly gained a reputation for his successful investment strategies and innovative approach to the markets. Soros is a macro investor, which means he focuses on investing in markets and assets based on his understanding of the larger economic forces that drive them.
The heart of Soros’s career has been his investment philosophy, which he describes as being based on “reflexivity.” This is the idea that market participants can influence the markets themselves, creating feedback loops that can cause market prices to deviate from their underlying values. Soros has been able to identify mispricings in the markets throughout his career, and to take advantage of them to generate returns for his clients. He is also known for his willingness to take bold risks when others are reluctant, which has helped him to achieve impressive returns.
Some of Soros’s most notable successes include his early investments in emerging market economies, which helped to cement his reputation as a savvy and innovative investor, and his bets against global currencies like the Thai baht and the Japanese yen.
Despite his many successes, Soros has faced challenges throughout his career, including periods of underperformance and losses. The dot com boom and bust was an example of reflexivity in action, with Soros benefiting from the bubble on the way up and suffering when he didn’t get out in time on the way down. Even the best traders make big mistakes, and Soros has been able to overcome these challenges to build a legacy as one of the most successful investors of all time.
Soros: “The Man Who Broke The Bank of England”
Soros earned this nickname after his famous bet against the British pound in 1992. At the time, the British government was trying to maintain the pound’s value within a narrow range relative to the German Deutsche Mark. However, Soros saw that the British economy was struggling and that the government was unable to meet its economic targets, and he bet that the pound would need to be devalued.
Soros and his investment firm, Soros Fund Management, placed a massive bet against the pound, borrowing pounds and then selling them in the markets. When the pound was eventually devalued, Soros was able to buy back the currency at a much lower price, generating a large profit in the process. The trade earned Soros over $1 billion and cemented his reputation as a savvy and successful trader, especially in currencies.
The trade against the pound had significant implications, not just for Soros but also for the wider financial world. This came as a major blow to the credibility of the British government and the pound, and marked a turning point in the history of currency markets. The trade demonstrated the power of large hedge funds and their ability to shape markets, and it helped to pave the way for a new era of financial innovation and risk-taking. To this day, Soros’s bet against the pound remains one of the most famous trades in financial history, and it is a testament to his skill and expertise as an investor.
How does George Soros invest?
George Soros invests mainly in stocks, bonds, currencies, and commodities. He is known for his macro investing approach, which involves making investments based on his understanding of the larger economic forces that drive markets. He uses a range of investment strategies, including both long-term and short-term positions, and he is known for his willingness to take bold risks when others are reluctant.
The heart of Soros’s investment philosophy is his concept of “reflexivity.” This approach is based on the idea that market participants can influence the markets themselves, creating feedback loops that can cause market prices to deviate from their underlying values. Soros uses this idea to identify mispricings in the markets and to generate returns for his clients. His mental flexibility stems from this understanding of reflexivity.
The best known application of this concept is in Soros’s view on bubbles. He is known for his ability to identify “bubbles” in the markets, and he has been successful in profiting from several major market bubbles throughout his career. But that is not necessarily by betting against them. “When I see a bubble forming, I rush in to buy, adding fuel to the fire,” he has said, meaning that if he is early to a period of market hype, he can ride that hype higher, as long as he knows when to get out. This is a tough game – as many investors and traders have found out over the past two years in the Reddit and meme stock era – but Soros has done it successfully many times, most recently with gold in the 2010s. There have been misses, as in the dot-com era. Soros is prone to making mistakes, just as any investor is.
Soros is famously quoted as saying, “I’m only rich because I know when I’m wrong.” His mental flexibility is again on display here, as he’s comfortable changing his mind and moving on from positions. The hard part about his ‘bubble theory’ is knowing when to get off, but Soros is comfortable updating his views and not marrying himself to a position. This combination of foresight, willingness to take risk, and ability to acknowledge when he is wrong has been key to Soros’s success as an investor.
Which Companies and Stocks does George Soros own?
While Soros’s foreign exchange trading is his most famous work, he is still a hotly followed equity investor. As the founder and manager of Soros Fund Management, he runs over $7.26B in reportable assets, according to his latest Form 13F. You can see the biggest holdings and changes on InvestingPro+. Some of those include, as of December 31st, 2022:
Horizon Therapeutics (HZNP): Horizon is a new position for Soros Fund Management, and became its biggest at $325M (as of the end of the quarter). The pharmaceutical company agreed to a buy out by Amgen Inc (NASDAQ:AMGN) late last year, and trades more than 6.3% below its agreed deal price of $116.5.
Merger arbitrage was a common theme in Soros’s Q4 portfolio again, as he also added a position to First Horizon National Corporation (FHN), which is due to be bought out by Toronto Dominion Bank (TD) in a deal expected to close at the end of the quarter. This follows on a Q3 portfolio where he had a large position in Duke Realty, Biohaven Pharmaceutical, and a smaller position in Twitter notes; each of those deals closed in October. Merger arbitrage is favored among professional investors for its ‘market-neutral’ qualities, meaning that deals closing and delivering returns are not as dependent on the general direction of the market.
Rivian Automotive (RIVN) – 3.6% of Soros Fund Management’s portfolio
The upstart electric truck maker is a riskier selection, and at least in Q4, the position did not appear to do well. Soros reduced its position for the second straight quarter, but it remains the second largest in the portfolio.
Soros juggled his tech giant positions in Q4 2022. He reduced his position in Amazon.com, the famed e-retailer and vendor of cloud services, by more than half, and nearly doubled his position in Alphabet, the holding company of Google among other companies. This is the second straight quarter that Alphabet was one of Soros’s biggest additions, perhaps reflecting belief that the tech giant would overcome the current slow period both in its business and in the market. This filing’s data predates the recent angst over ChatGPT, and Alphabet is up only 7% this year, lagging the Nasdaq.
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George Soros key stats: Net worth, age, where he lives
- George Soros’s age: 92 years old (he was born 2.5 weeks before fellow famed investor Warren Buffett)
- George Soros’s net worth: $6.7B, estimated as 369th highest in the world according to Forbes.
- Where George Soros lives: He is a dual citizen of the U.S. and Hungary, and owns several properties in New York City or New York state.
- George Soros’s spouse: Tamiko Bolton Soros
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