As Ray points out the key to Soros is his early studies under Karl Popper, whose 'Open Society' was a major book opposing the rising tide of fascism when it came out. Soros says it changed his life.
His aggressive market trading style has been financial engineering primarily with national currencies, not a battle with small shareholder victims.
An interesting note on all that:
amsterdam.nettime.org
"Young George Soros arrived in London aged 18, with no money
and no friends. He worked as a waiter, a house painter, and
an agricultural labourer, before enrolling as a student at
the London School of Economics in 1949.
But Soros wasn't really interested in economics. Instead, he
chose to study philosophy, and came under the influence of
Karl Popper. It was Popper who taught Soros about the notion
of the open society, which Soros later said was the thing he
cared most about in his life.
Ralf Dahrendorf knew both Popper and Soros.
Ralf Dahrendorf: Popper had just arrived on the scene; the
book, 'The Open Society and its Enemies' had just been
published, and was actually one of the major texts of the
times. I am not sure that Soros then saw himself as a
philosopher; he did not in fact take his LSE studies unduly
seriously at the time, but he was struck by this one idea
about one can move out of the nightmares of totalitarianism
of both descriptions, into a world which is more open, more
experimental, in which you try, make mistakes, correct them -
a whole set of ideas and attitudes which were obviously
attractive to this young man who had had indirectly at least,
two totalitarian experiences.
Tom Morton: What exactly did Popper mean by the open society?
Ralf Dahrendorf: He's never defined it properly. It was
always - if you want to put it that way, a negative term -
the absence of ideologies which are all-inclusive, the
absence of a State which dominates everything. The whole
point about the open society is that it doesn't seek a system
and doesn't want a system. And so it wants institutions which
make change without violence possible.
MUSIC
Tom Morton: After leaving the London School of Economics,
George Soros worked for a couple of stockbroking firms before
moving to New York in 1956. There he worked for an American
broking firm trading European stocks, which no-one else knew
anything about.
Soros was moderately successful, but it wasn't until nearly
20 years later that he began to make really big money.
Robert Slater: He set up a hedge fund, called the Quantum
Fund, and he used a couple of hundred thousand dollars of his
own money, and the rest is history, so to speak. I mean that
fund has gone on to become the most successful investment
venture in the history of the financial markets.
Tom Morton: As an investor, Soros was ahead of his time. The
fund he set up was a hedge fund - one which gives other
investors a way of hedging their bets against future
movements in prices of exchange rates.
Well nowadays, hedge funds are all the rage, but back in 1973
when Soros set up his Quantum Fund, they were virtually
unknown. Soros went into partnership with Jim Rogers, a young
American trader who had also studied philosophy. They rented
offices on Central Park, a long way away from the hype and
hubbub of Wall street and the trading floors.
But Soros and Rogers set out deliberately to distance
themselves from the Wall Street traders, whom they referred
to as 'the herd'.
Robert Slater: Well they thought that these people on Wall
Street didn't really understand the market. That's the big
difference; they thought these people were just taking their
economics courses and believing that the market was this
rational animal, that all you had to do was factor in the
fundamentals of any company and make some computations about
future earnings, projections, and you could more or less
hopefully come up with some prediction about what a certain
stock would do, or wouldn't do.
Soros thought that was rubbish. He believed that a lot of the
way a stock moves or doesn't move has to do with people's
perceptions, and it doesn't really have to do with the
fundamentals of the company that's behind the stock. And that
in order to succeed at stock picking, you had to really
almost be a psychologist. And you had to understand the way
'the herd' was moving at any particular time, and when it was
going to move, and at what pace, and you should base your own
judgements about stock picking on the herd mentality and
watching it, rather than basing yourself only on how
companies were doing. |
