Chapter 22 CHAPTER 22 LIMITED PARTNERSHIP SPECIAL COMPANY

Soros is a master of loan investment.You can imagine that this requires a hard heart, confidence in gambling, and a grasp of the most basic things in the financial market, and you have to be sure that you are a master of loan investment. Section 1 Speculative Companies In the early 1990s, limited partnership speculative companies occupied the mainstream of the financial market and were the most unlimited.They became the darlings of investors, largely because the managers of the world's most famous speculative firms made astounding sums of money.The most famous is George Soros and his quantum investment company.Others did a good job too, including Michelle Steinhardt of Stock Exchange, Julian Robertson of Zenger, and Ryan Copperman of Latium Consulting LLC.

No wonder the "Wall Street Quarterly" called them "Wall Street's upstart club." Those who run the companies become the most powerful and highest paid businessmen in the country, with the power to challenge the most important business firms on Wall Street.In the words of BusinessWeek, they are the outlaws of the investing world, unrestricted and free-spirited, but far better investors than their peers of the past. The 5,000 joint venture firms invest $500 billion a year (of which Soros invests $12 billion), accounting for a large portion of the $3.5 trillion invested in the market each year.These investment firms trade an estimated $75 billion a day, more than eight times the volume of New York stocks.

From 1987 to 1900, the trading volume of investment companies increased by an average of 75.1% per year. During the same period, the trading volume of stock investment funds increased by 35.1%, and the stock trading volume of the Steinhardt 500 Index increased by 56.2%. .In 1992 alone, the profits of speculative companies were three times the profits of stocks in the Steinhardt 500 Index.In the same year, the profit growth rate of the most famous companies was between 25% and 68%, exceeding the profits of investors in US stock index funds by 7 to 8 percentage points. In 1992, Soros' wealth increased by 68.6%, Stan Hart's growth was about 50%, and Robertson's was 27.7%.

The best evidence of the exceptional performance of the Speculative Partnership is the Financial World's 1993 list of the highest earners.About half of the people on the list either manage or work for such funds.The managers of partnership investment companies accounted for the top five - Soros ranked first with his annual income of 1 billion U.S. dollars. He was the first person in the United States with an annual income of more than 1 billion U.S. dollars in 1993.Eight of the top 10 are managers of joint ventures, and 46 of the 100 on the list are also managers of speculative firms.The fourth place is Druckenmiller, with an annual income of 210 million US dollars. In the list of 100 people, 9 people work for Soros Investment Company.

In 1994, Soros was managing more than $11 billion, Robertson was managing $6 billion, and Stanhardt was managing $4 billion.The income of each of the latter is a management fee of 1% of their respective funds plus 20% of the increase in marketable securities, while Soros's is 15%. In order to make a profit, the speculative partnership takes advantage of the movement of interest rates around the world to speculate precisely on those currencies which fluctuate accordingly.They also buy foreign bonds, especially those of Europe and Japan, usually in the futures market.Many are also investing in thriving third world markets.

Section 2 Wall Street Beliefs Wall Street is often dominated by those who are creative and good at seizing opportunities.In the past period, they may be Morgan or Stanley.In the early 1990s, he was the biggest beneficiary of Soros and other joint venture companies. According to James Grant, editor of the Grant Rate Observer in New York, the giants of Wall Street have far less influence over finance than one might think.Still, the giants of Wall Street rest comfortably in the belief that they can master certain things and make certain events happen. "I see Soros as one of these guys, part myth, part reality," he said. "People are voicing their worries, their resentment, their envy. They think someone is manipulating the market. They don't believe in supply and demand." is working, and the market itself is influencing its own development. They think that's what Soros did.

"...People can be victims when the market is weak, but in any case, I think people tend to believe that some people succeed, some people fail, and some people are responsible. "I think speculative firms are what people think they are, they accumulate wealth as fast as they can, they speculate boldly, until they recently reached a billion dollars. Soros, Robertson, Copperman, Johns, etc. The kind of people we talk about a lot today." The third section Lushan face How can I successfully become one of them?How can I easily join an investment company? Actually, it's not easy at all.For most investors, that's not very sensible.Because to join an investment company, you have to take great risks and have a lot of money.

Suppose a millionaire might be willing to take the risk.The U.S. Securities and Exchange Commission stipulates that American speculative companies must either have wealth worth US$1 million, or have an annual income of US$200,000 for at least two consecutive years, and at least US$300,000 for newly established speculative companies.Soros's Quantum Group does not have a minimum capital requirement to join, but you also have to pay a large amount of insurance money to join. There is a popular saying that there are no limits to speculative partnerships, which is not true.The U.S. Securities and Exchange Commission stipulated in the 1934 Act: Speculative syndicates with more than $100 million must submit materials to relevant agencies, and all speculative syndicate managers must be bound by the Anti-Deception Act.Speculative groups can avoid being investigated like investment companies, but the number of partners is limited to less than 100, and a list of privately traded items must be provided.

The biggest difference between the Soros group and the American speculative group is in taxation.Soros Group stockholders do not have to pay capital gains tax as long as most of them are not US citizens.In some cases, U.S. citizens can invest in the Soros Group, but they will not enjoy tax-advantaged treatment, but most groups prohibit, or at least discourage, Americans from investing in their companies due to the high risk of speculative groups. Soros, a U.S. citizen since 1961, has ruled that he cannot invest in his group, although he is eligible.Most of Soros' investors are Europeans.

Section 4 Speculative Skills Although the speculative group carries risks, there are still many attractions.One is the enviable ostentation of members of the syndicate, but most alluring is the prospect of great wealth.Since investors in most venture capital groups are required to keep their capital in the company for a long period of time, they usually reinvest their profits, whereby their wealth gradually increases. Traditional managers of stock investment firms and retirement funds are extremely conservative.They use very limited business skills in order to obtain modest but stable profits.The managers of speculative firms, unrestrained by conservatism, employed some highly adventurous techniques that are now restricted to speculative loan speculation or investment.

A manager of a major Wall Street speculative group, who asked not to be named, described the brutality of loan speculation: "Painful, very stressful. You have to have special talents to deal with loan speculation, and Soros and Steinhardt can... It takes an intelligence, a confidence in your ability to do this, because it is very difficult for you. Small fluctuations can make a big difference. In February 1994 the dollar was changing 4 to 5 percent a day. That cost Soros $600 million. We live in a world where a change of 4 to 5 percent is normal. Federal The Reserve Bank's interest rate rise is only 114 percentage points, but the Dow Jones Industrial Average will fall by 97 percentage points. It does take risk, but it should be done sensibly. "Soros is a master of loan investing. You can imagine that it takes a hard heart, confidence in gambling, and a grasp of the most basic things in financial markets, and you have to be convinced that you are a master of loan investment." Opportunities also rely on other techniques.Another scary thing is short selling.Soros relied on this method to profit by shorting the pound ahead of Black Wednesday in September 1992. Stock investment companies are prohibited from short selling.Relevant rules stipulate that the net profit of a cooperative stock investment management company shall not exceed 30% of its total income from selling short-term investments.Recently, several traditional stock investment firms have been approved by the SEC to conduct short selling operations. It was the same manager who put loan speculation and short selling together.Benjamin Gersham, the father of security analysis, believed that stocks had their own value, he said.In practice, this self-worth is measured, under certain conditions, by interest rates, economic conditions, and corporate profits. "The job of analysts and money managers is to determine whether a security is priced above its value. So when a security is priced above its value, traditional investors may sell and speculators may sell short. When the price is below its value When the value is low, traditional investors may buy in. The difference between traditional investors and speculators is that the former buy in cash, while the latter use loans to speculate and invest more than 100%. There are many tricks.The speculative cartel loves not only long-term and short-term speculation, but options, futures, and whatever else the market dictates.They are more concerned about market share and their transactions are more frequent. In 1988, Soros traded his securities 18 times and in 1992, 8 times.Compared with traditional investors who rely solely on a single field or a single market, speculative groups' speculation in multiple fields provides them with the opportunity to occupy certain financial market shares in the world. The managers of speculative groups have a strong incentive to use these techniques to make a profit no matter how their wealth is acquired, traditional investors earn about 1% of their wealth, so they have no incentive to act aggressively.The managers of the speculative group earn about 20% of the company's profits, so they can be proactive in making profits around the world. By 1994, the opportunistic groups had grown so rapidly that politicians began to discuss the need for new regulations to limit them.There are growing concerns about the ability of speculative groups to influence financial markets adversely because they invest large amounts of capital in them. When the bond market took a hit in early 1994, many politicians believed that speculative groups were behind the scenes.And the managers of the speculative groups argue that their market share is much smaller than that of investment groups and commercial banks. For Soros, he was ambivalent about setting the rules. Chapter 5 chaos and order He has good reasons for opposing rules and regulations.After all, he was able to acquire great wealth because of the absence of rules and regulations.Soros likes to call himself an expert on profiting from chaos.What kind of rules and regulations do people who live off financial market chaos want?But he supports the establishment of a central banking system in the international financial field. There is a contradiction here: "I would not hesitate to speculate in the currency market, although I think the currency market should be stable", he said, "We must distinguish between being a participant and being a citizen. As a Participants, you operate by the rules, and as a citizen, you have an obligation to correct the wrong system." During Deng's time, speculative groups seemed to be more relatively unscrupulous. In 1002, the U.S. Securities and Exchange Commission presented a 500-page report on large groups.During this period, suspicions arose that three major speculative groups, including Quantum, had sold large amounts of US Treasury bills in the auction market, of which Salomon Brothers in New York was accused of attempting to squeeze the market through auctions of Treasury bills.Government investigators have probed the three companies, giving a checklist of three institutions operating normally.The SEC report concluded that the speculative syndicates did not need strict regulations.