Chapter 10 Chapter 10 The Golden Great Leap Forward

"The stock market is generally unreliable, so if you follow the trend of others in the East China Street area, you are bound to do very poorly in the stock market." The first section changed the name to Huan By 1975, George Soros was starting to gain prominence in the Wall Street community.More precisely, he said, his ability to make money attracted attention.Few doubted that he was destined to become a celebrity. As Alan Raphael, who worked with Soros in the 1980s, put it: "He was hardworking, insightful, and driven. He was very qualified for his profession. The profession itself does not require logical reasoning and rational thinking." It's an intuitive process. How much experience you have has a huge impact on your business. I think George is a natural for this career.

Although Soros was approached and known by some in the Wall Street precinct, he was still unknown to the outside world. There are reasons for this. Unlike the late 1980s and 1990s, at that time, investors who were hidden in social life were generally not taken seriously by people.At the time, the business press in the Wall Street precinct was also lukewarm.Correspondingly, there is less interest in the personalities of important people in financial markets. — not like today, where people scrutinize the private lives of everyone they work with. Even if the media wanted to do more reporting, Soros and his peers in the Wall Street precinct were extremely wary of them.They all try to avoid publicity.Investing is considered a purely private activity.

Moreover, people in the Wall Street district generally believe that purely attracting the public is unlucky, like kissing the alluring god of death, and will eventually lead to the abyss.Traditional enlightened people also believe that if an investor publishes his picture in the magazine of the Wall Street community and circulates widely, then bad luck will come, and the reputation has a price, even a fatal price. So George Soros stayed out of the spotlight, which made him feel very comfortable.Bo Rongwen, a close friend of him, said: "During our contacts, George never showed off himself, even if it was beneficial to the society, he did not promote himself."

However, on May 28, 1975, the Wall Street Journal focused on reporting the deeds of George Soros on the front page.The richness of color, especially the title, gave Soros his first taste of honor: The stock market is going against the wind and rain Don't follow the trend of Wall Street Hard times dominate Soros & Co. recognizes the target: Israeli arms production big profits for foreigners Did this article in the newspaper spell doom for Soros?Does it change "his good luck? He professes to have a hunch that the media attention is damaging. - However, in fact, Soros has enough reasons to be happy about this report in the newspaper. It prompts Soros to make up his mind Independent operation, this independent operation brought him extremely rich profits.

Preparing for this story put Soros in such a bad mood that when the daily reporter sat across from him for an interview, he complained of chronic illnesses and severe back pain.Every time Soros & Co. got into trouble, the pain intensified. "Securities are the most brutal and ruthless things," he said, looking a little pained. "You can't fake it or stop it, because the real thing is recorded every other day." Later, in an interesting commentary session, after the astonishing and lasting success of Soros & Co. of late, Soros said in a pessimistic tone about the future:

"Who knows how long it will last? History has shown that all business owners eventually shut down, and one day, I'm sure we will be no different. I just hope it won't be this afternoon. Soros walked into the stock ticker with a smile after speaking. , he wanted to short a large amount of stock in a well-known real estate company.He expects the stock price to fall, and the big company tries to buy all the shares he sells. "The trust department of the bank wants it too," Soros said with a smile, "Oh, I'll add 0.5 points to the final asking price to let some stocks be sold, and some people will rush to buy them."

After a few weeks, the stock price fell and Soros got another note profit.And in this deal, eager stock buyers lost money. Is this the climax of the story?This independent will shows the level of Soros's operating procedures. Speaking of Soros and Rogers, newspapers extolled: "Throughout the years. In terms of buying and selling stocks. These two guys have shown their uniqueness. They buy a stock before it's popular and sell it when it's hottest. They generally don't compare with the size of the broad vote. Large joint-stock investment companies, bank trust departments, and other institutions, unless they are targeted for sale."

"The stock market is not terrible, so if you are as fashionable as others in East China, then your stock management is doomed to be very bleak." Let's hear Soros's voice: "We started from the premise that the stock market is generally unreliable, so if you follow other people's fashion in the Wall Street area, then you are doomed to do very poorly in the stock market. Most stock market analysts in the Wall Street area only But how much of value can a propagandist of business operations plagiarize from the company's annual report or from someone else's report for his investment report?"

So where did George Soros start? Free and independent thinking.He succeeded! In 1973 and 1974, some large institutions appeared to be very depressed because the value of their stock holdings was cut in half.At the same time, Soros's company had a miracle, with a profit of 8.4% in 1973 and a profit of 17.5% in 1974. Robert Miller, Soros' personal assistant at the time, recalled: "The uniqueness of Soros is that before a stock is popular, he can see hope through the clouds...he knows why he should buy it or not. Buy. Another strength of Soros is that when he finds himself in a difficult situation, he can get out of it.

Short selling is a particular favorite tactic of Soros & Co.Soros admits that he likes to profit by short selling winning, which brings him the joy of planning.The company bets on a few big institutions, sells them short, and makes a ton of money when those stock prices plummet. The Soros-Arvin deal is considered a classic example of profiting from short selling.For the purpose of short selling, Soros borrowed 10,000 shares of Arvin when the market price was $120 per share.After that, the stock price plummeted.Two years later, Soros bought the 10,000 shares at $20 each.Looking back, you will understand what is the greatest profit with the smallest investment.A profit of $100 per share earned the company $1 million.Soros did this because he noticed a cultural tendency. Before Arvin invested blindly, he realized that as the population ages, the demand for cosmetics will greatly decrease.

Soros explained with great glee: "In the Arvin incident, the banks didn't realize that the heyday of the cosmetics industry was over after World War II because the market was saturated and little kids didn't use the stuff. is another fundamental change that they overlook. Soros joined the U.S. railroad industry, and when some people predicted that the New York City Company was about to go bankrupt, Soros made money from the New York City Company-through securities.Of course, there are miscalculations.Once, while visiting Olivati, he bought too many shares in the company.His only reason for buying the shares was a meeting he had with the office staff, and the operator believed that the company's stock had an upward trend.The listing of these stocks was not very smooth, and Soros regretted it very much. Foreign portfolio investments also suffered some losses.The same is true for the purchase of stocks.Soros and Rogers lost $750,000 in Sprague Electronics.They mistakenly believe that the semiconductor stock market is bullish.Rogers explained: "It's not so much a major event as it is simply a wrong analysis plus the purchase of a company outside the semiconductor industry." Their system still works.If in the early 1970s the road was a thorny one for many in the Wall Street area, George Soros was the lucky exception.From January 1969 to December 1974, the company's funds nearly tripled in value, from $6.1 million to $18 million.Every year the company keeps growing. At the same time, the average index of 500 joint-stock companies fell by 3.4 percentage points. In 1976, George rose 61.9%, then in 1977, Dow fell 13%, while Soros rose 31.2%. At the end of 1977 and the beginning of 1978, Soros and Rogers decided to invest in technology and military industry again. "You know," says Barton Biggs of the Morgan and Stanley family, "just as you'll hear President Jimmy Carter talk about human rights, George was talking about those stocks 18 months ago." The shares were bought too late, but he was still the only one buying them. In 1978, the company's profit was 55.1%, and its assets reached 103 million US dollars.In the following year, 1979, the profit was 59.1%, and the assets rose to 178 million US dollars.Soros' high-tech stocks are still alive and well, showing no signs of dying. In 1979, Soros changed the name of the company to Quantum Corporation, which originated from Heisenberg's uncertainty law of quantum mechanics.This law holds that: In quantum mechanics, it is impossible to describe the motion of less than atomic particles.This is in line with Soros's point of view. Soros believes that the market is always in a state of uncertainty and constant volatility, but it is possible to make money by betting on unforeseen factors through obvious discounting.The smooth operation of the company, and the above-par price, are based on the supply and demand of shares. Section 2 Fear of a lawsuit When a man has made as much money as George Soros, people inevitably ask him a lot of questions.Such as whether all his financial activities are above the board of directors.Over the years, he had disputes with the Securities and Exchange Commission from time to time, and he never gave in intentionally. On one occasion in particular, at the end of 1970, it seemed that the debate was very heated. The Securities and Exchange Commission sued him in New York District Court, claiming that he had manipulated the stock market, effectively defrauded him, and violated the anti-manipulation provisions of the federal securities laws. The day before the October 1977 IPO, Soros cut Computer Science shares by 50 cents a share, according to the SEC, and he urgently asked brokers to sell Computer Science shares.Brokers sold 22,400 of the company's 40,100 shares on October 11, 1977, or 70% of the computer science stock's volume that day. The SEC added that at the end of the day, the public price of the shares was "artificially low" from the original commercial price of $8.375 per share.Jones Fund Corporation, a California-based nonprofit corporation that made the shares, agreed to sell 1.5 million shares to the public in June 1977 and another 1.5 million shares to Computer Science at the public offering price company. Therefore, the alleged stock manipulation could cost the fund about $7.5 million. The SEC alleges that Soros bought 155,000 shares from the stock operator and 10,000 shares from other brokers, all at lower prices.At the time of the public offering and later that month, Soros ordered 75,100 shares of the computer science stock, priced at $8.375 or slightly more each.And persuade others to buy. Soros neither admitted nor denied the complaint against the Securities and Exchange Commission. He agreed with the court's decision, so the case came to a conclusion quickly.He insisted that going to court with the Securities and Exchange Commission would cost him too much time and money. A 1981 magazine article quoted Soros' defense: "The Securities and Exchange Commission doesn't believe that someone can do as well as I can without playing tricks. So they want some evidence to understand." The Fletcher Jones Fund of California has also filed suit against Soros in court.Claims to have suffered material losses due to the fall in share prices.Soros and Jones eventually settled for $1 million. The lawsuit hasn't deterred Soros.In fact, it didn't affect his profits at all. Soros operates very smoothly in the British stock market.At the top of the stock market rally, he sold short British pounds.He has taken a lot of action on the UK stock market.Bought at a very low price and in a huge quantity, it is said to be worth 1 billion US dollars.He ended up earning $100 million on this move. In 1980, 10 years after Soros was founded, the performance of this year was unbelievable, with an increase of 102.6%. So far, the company has grown to 381 million US dollars.Soros's personal wealth reached $100 million by the end of 1980. Ironically, the main beneficiaries of Soros' investment prowess, besides George Soros himself, were some of the very richest Europeans, the people who started funding Soros & Co.Jimmy Rogers asserted: "These people don't need us to make them rich, but we have made them very rich."