5 Things You Might Not Have Known

About Billionaire George Soros

Soros made 1 billion GBP shorting the pound sterling

While George Soros has an estimated net worth of $23 billion, and has been profitably compounding his returns since the early 1970s, his most well-known trade was his bet against the British pound, which earned his fund about 1 billion GBP.

Source: George Hodan, via Wikimedia Commons

Soros made 1 billion GBP shorting the pound sterling

In 1990, the U.K. signed on to the European Exchange Rate Mechanism, an agreement which forced the British government to maintain the value of the pound relative to other European currencies. Soros, eyeing the U.K.’s inflation, shorted the pound sterling. When the U.K. finally pulled out of the ERM in October of 1992 (“Black Wednesday”), the pound crashed, netting Soros a handsome profit.

Source: Jeff Ooi via Wikimedia Commons

Soros has worked with many other legendary hedge fund managers

At the time, Soros’ partner was Stanley Druckenmiller, a legendary investor in his own right. Druckenmiller’s own fund, Duquesne Capital, was shuttered in 2010, but not before amassing $12 billion in assets. But Druckenmiller isn’t the only legendary investor that’s worked with Soros, many of his former partners are themselves famous investors.

Source: Wikimedia Commons

Soros has worked with many other legendary hedge fund managers

Victor Niederhoffer was one of Soros’ portfolio managers in the 1980s, while Jim Rogers co-founded the Quantum Fund with Soros in 1973. After leaving Soros’ fund, Niederhoffer ran one of the most profitable hedge funds of the 1990s until he blew up in the 1997 Asian financial crisis. Rogers has remained a successful investor, focusing on commodities and emerging markets.

Source: Gage Skidmore via Wikimedia Commons

Soros is somewhat of a philosopher

Soros considers himself to be more than just an investor, he’s long dreamed of becoming an important philosopher as well. In his 1987 book, The Alchemy of Finance, Soros lays out his economic “theory of reflexivity.” Source: Satyakamk via Wikimedia Commons

Soros is somewhat of a philosopher

According to Soros, markets are driven by thinking participants with imperfect knowledge. Although their knowledge is flawed, they’re still willing to act on it, and their actions create reality.

As an example, Soros offers up the statement, “This is a revolutionary moment.” Such a statement may be true or false – it depends entirely on the beliefs of the participants.

Source: DarwinPeacock via Wikimedia Commons

Soros studied under, and was heavily influenced by, Karl Popper

Soros’ philosophy stems from his time at the London School of Economics, where he studied under the philosopher of science Karl Popper.

Source: LSE library via Wikimedia Commons

Soros studied under, and was heavily influenced by, Karl Popper

Popper was known for his advocacy of falsification -- arguing that while scientific facts can never be conclusively proven, they can be falsified. Popper argued that scientists should seek to actively disprove their theories, rather than validate them with observations. Popper was also a political philosopher: His most famous work, The Open Society and Its Enemies, is a scathing critique of socialism and totalitarianism.

Source: Lucinda Douglas-Menzies via Wikimedia Commons

Soros has donated millions support liberal politicians

Popper is well-regarded in libertarian political circles (Ayn Rand wrote the introduction to a re-release of The Open Society), but Soros is skeptical of free markets, and is a major donor to liberal political causes.

Source: Wikimedia Commons

Soros has donated millions support liberal politicians

Through his foundation, the Open Society Institute, Soros has donated to dozens of left-leaning political organizations, including the Center for American Progress. In recent years, he’s actively supported Democratic Presidential candidates, including John Kerry and Barack Obama. Source: Pete Souza via Wikimedia Commons

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