The Soros Enigma

Even before you start reading the book the photograph of George Soros looking towards the heavens is an indicator of what the book has to offer. The author Robert Slater, a member of the Time magazine reporting staff, has used his reporting skills to the hilt to try and describe how Soros operates but at every point he ends up dishing out what is by and large known. He claims that he would give only a partial glimpse into Soros trading secrets and will not reveal how Soros operates. But isnt that the secret?

Ironically, the author claims that the book contains 24 trading secrets of George Soros, so at the end of it the reader is looking towards the heavens (like Soros) to find out exactly what Soros does. Yet it makes good reading for the simple reason that the language is lucid and technical information (the analysts jargon) is put in such a way that a layman can decipher it.

 

Soros background is impressive. Soros began accruing his incredible fortune after establishing the Quantum Fund in 1969, launching an unprecedented financial career in which he presided over assets that grew at an average annual rate of 35 per cent. He is, of course, famous as the Man who broke Bank of England, when in September 1992 he shrewedly sensed that Britains mounting economic doldrums would force it to devalue the pound. He took a position of $ 10 billion (sold $ 10 billion worth of Sterling forward) and when the devaluation happened made a profit of $ 1 billion virtually overnight. The investment secrets are essentially interesting anecdotes and ideas from which an investor can gain new perspectives and ideas that could be financially rewarding.

Let us look at some of the (so called) secrets which have some relevance to the Indian investor.

Investment Secret 3 says, Markets arent efficient. It essentially throws to the wind the concept of efficient market theory (which is even followed by the large informed investors) by rationalising that it is impossible to attain perfect understanding of anything including the financial markets and concluding that all analysts are wrong in their view of what made stock prices rise or fall.

Investment Secret 11 asks the investor to Discern Chaos essentially means that one must look not only for trends but also whether a trend is emerging or has been pushed to the point of excess. For this he suggests that the investor be well read (not only financial but also general interest literature to spot social or cultural trends).Investment Secret 15 is important to the Indian investor as it gives greater insight into When to fold.. What it suggests is to get out of an investment position early rather than too late and not be overly concerned about behaviour that others might see as erratic. This might also require the ability to accept your mistakes and to endure the pain which is exactly what Investment secret 16 and 19 are all about.Says Robert Slater in Investement Secret 17: Dont bet the ranch. He suggests that survival is the name of the game but at the same time never stand idly when theres money to be made.