Chapter 23 Chapter 23 Market Idols

"Why are we fascinated by the modern Midas? Section 1 Tracking Soros George Soros rose to prominence when he successfully challenged the pound in September 1992. He seems to have the ability to foresight, rich investment skills.So there is a myth about him: he can occupy market share according to his own choice and thus influence market conditions. In fact, he seems to be a leader with enormous authority. It seems easy to him if the market price of a currency, a stock, or a company goes up when he talks openly about it.All you have to do is wait for Soros to speak publicly, then rush out and buy the securities and stocks the leader is talking about.

But the difficulty is that he doesn't talk very often. So how can one find out what he's going to do?How does another investor know what he is buying? They are looking for the "trails" that market experts talk about, clues that indicate the direction and focus of investment.Tracking is a must, because when an investor like Soros speaks publicly, he doesn't tell people when and how much market share he has gained. These trails are difficult to find, and one way to do this is to notice a steady movement in the same direction in a typical group of securities that rarely changes.

Bill Dodge, vice president of the Securities Institute and chief investment strategist at Dean Reynolds & Company, explains: "If the Dow Jones Industrial Average drops 50 points and the traders say they don't see a big Volume, I'm going to have to start thinking carefully, with the Dow Jones stock itself changing and the dollar weakening against the mark, I'll conclude that you have a businessman selling US stocks who is either from Germany or is converting wealth from dollars Cheng Mark. This behavior is unusual in markets that have nothing to do with each other or markets that are inseparable from each other."

With so much interest in Soros, people were easily gullible into believing that he was behind the manipulation of stock movements.In fact, he didn't do that. "The way people get fooled very quickly today is to say that something is changing rapidly and that Soros is manipulating".Soros Group traders also kept their mouths shut about what they were doing.Of course, some traders can sometimes find out when Soros is operating in the market.As Dodge explained, a group of traders might start noticing that every time they sold the same stock for someone, the price didn't go down, confusing them.Traders listen carefully to the impromptu conversations among their peers.One might say that he sold a lot of oil stocks and the price didn't go down, another might reply that he noticed it too.

There is not a single bit of information about the Soros Group, at least not currently.But it is still possible for them to speculate on what Soros will do. Dodge explained this: "I can call you and tell you I want to buy, and you specify a market for me. I go to the trading center of that market, and there is a dealer there. You tell me that two months ago you Did a great deal with Soros, you don't have to tell me what you did, I told you I wanted to buy from you and you said no. We were in competition. You were the only one who didn't want to sell People, while everyone else is selling, you seem to have a relationship with Soros, so the market will speculate that you are buying for Soros.

The second node stone into gold As a market leader, Soros seemed to have a touch of gold. Real estate is a good example. Until early 1993, Soros hadn't invested in real estate.For a period of time, this field has been extremely depressed. In the 1980s, due to the excessive construction of developers, this field was in a bad mood.Now there was a crisis, but that didn't deter Soros, who became interested in the field overnight.He sees the crisis as just another opportunity to gain.Of course, entering this field was relatively new to Soros, who chose the firm of Paul Reichman as his partner.

On February 8, 1993, Soros announced that he had established a real estate fund with assets of 220 million U.S. dollars, which was managed by Reichman Company.The new investment firm has been named Quantum Real Estate Investments to represent Soros' investments in this area, which is expected to see new developments in the near future in a declining real estate market. When the real estate market went uphill, the Reichman brothers: Paul, Albert, and Ralph went bankrupt.Prior to this, the family owned multi-billion dollar real estate properties in Canada, New York and London.But when their Opirinia company suffered huge losses, the Reichman brothers' company fell into bankruptcy.Because Paul Reichman is a shareholder of Olympia Corporation.

But that didn't have much to do with Soros, who told the New York Times: "They were the most successful real estate developers in the world, and I wanted to invest, and I wanted to work with the most successful. Soros and Reichman proposed The capital of the new investment company is between US$7.45 million and US$100 million. Most of the funds will come from Quantum Investment Company. The following September, the new Soros-Reichman investment firm made its first deal: the purchase of Temeler Ltd. non-foreclosed real estate and distressed mortgages for a total of $634 million. .The sale is the largest in U.S. real estate history. In November, Soros and Reichman announced that they would invest $1.5 billion in three real estate projects in Mexico City.

Once Soros' transactions in a certain stock and currency commodity market are seized by the outside world, he can manipulate this market.In effect, he became the catalyst for constant change in the market. In April 1993, he targeted the gold market again. Soros believes that the price of gold will continue to rise in the near future, making gold more valuable than stocks and real estate bonds, although gold does not bring interest. As a result, Quantum bought $2 million to $3 million worth of gold at $345 an ounce.He invested another $400 million in Newmont Mining.Purchased $10 million worth of stock from Jacob Rothchart at $39.50 per share, changing James Goremy's ownership. Soros now owns 13% of the stock As the second largest shareholder of the company, Goldsmith still ranks first with 30% of the shares, and Rothchart is less than 5%.

Soros, Goldsmith and Rothchart knew each other better.The link between Soros and Rothchart was Niels Pebb.This person is the investment manager of Rosechart Company, but he does not work in Quantum Company. He is a close friend of Soros for many years. When traders discovered Soros's operations, the price of gold skyrocketed, and there was a large amount of speculative gold buying on the busiest trading day in recent years.An ounce of gold rose nearly $5 to $350 an ounce, the first time it has reached that price since October 1992. One trace of Soros speculating in the gold market is: in the summer of 1993, after Soros made a lot of profits and was satisfied, he quietly retired.Unexpectedly, London's "Saturday Times" made a special report on August 15, saying that Soros sold all his gold holdings at a price of 385 to 395 US dollars per ounce.In London, the price of gold soared to $400 an ounce two weeks ago. However, the good times did not last long. As soon as the news about Soros' withdrawal from gold trading came out, it fell sharply.

The beginning of 1993 was relatively smooth for Quantum.In the first 4 months, the company's wealth increased by 18%, due in part to the investment company's successful speculation in the Nikkei stock index, when the Nikkei index was around 16,000 points, by May 11, 1995, the Nikkei index Reached 20,000 points. Section 3 Modern Midas Even though some people were dissatisfied with Soros' ability to influence the market, Soros still tried to set a new record. On April 13, 1993, when Soros was interviewed by CNN's "Business Day" program hosted by Dejara Machini, he disagreed with Machini: he believed that the rise in the price of gold was due to News in Russia about Yeltsin and his reforms won the results of the latest referendum. Soros argued that news from Russia had no effect on rising gold prices.The rise in gold prices should be attributed to his purchase of shares in Newmont Mining Corporation. Aside from making bold assertions on CNN, Soros is in no rush to capitalize on his newfound status, even with all the hype touting him as the savior of the market. "I'm comfortable with my authority," he told BusinessWeek. "I admit it, how can I deny it? But it's just a one-time thing. I hope to some extent I can understand what people think." To make an impact, it’s important to find gaps and think critically.” However, the experience of investing in real estate and New Monte proved the fact that once the information about the actions of Null Ross in the market came out, it would trigger further behavior in the market.The new market behavior is just a version of Soros' behavior, and these behaviors will help to further increase Soros' market share. April 30, 1993. The Daily Telegraph questioned Soros with the headline: "Why are we in love with the modern-day Midas?" The answer is unequivocal, George Soros looks like a modern-day Midas, and falling in love with him is a breeze.What's wrong with following him and getting rich? In Soros's view, even with a limited reputation, he can't do much. "Trading is my business, my duty, my professional conduct, and I can't continue to manage my company without having a presence in the stock, bond, and currency markets. So I'm going to take a share in the Newmont Mining stock market , and watched what happened." Some other financial experts worship Soros' special power very much. "Many investors who hold a larger amount of funds than Soros treat Soros's judgment like a god." Peter Rohner said, "This is the influence of Soros. where." But others were less affected.Many people like to find fault with Soros, arguing that he cannot influence the market.One of them was Yasi Nolan, who argued: "While some managers with large amounts of money can affect the market in the short term, they cannot fundamentally affect the market because in the long run the market is determined by supply and demand. Others deny that Soros has special instincts, insisting instead that what Soros did was deeply immoral.But it is not a sin that a man usually has many friends who are of higher rank, and they are ready to admit it.They also lament that the absence of a proper law can put someone in jail.In addition, they admit that there are many evil things that are attractive to people behind the old relationship. For example, when referring to Soros's close relationship with James Goldsmith and Niels Tabb, "The Observer" magazine said: "This internal close relationship makes the main investors pay attention to Soros. Things are surprising. When his partners talk about Soros' sixth sense, most of the comments focus on the impression that Soros has built a whole network for himself to gather information." So what is really wrong with having many friends in the right range? Kelly Grasty, the business manager of Soros Fund Management Company, enthusiastically explained that Soros is good at understanding the trend of the world's macroeconomic development. He said: "George has many friends in the intellectual circles, thus forming a network Great network. He will say in his office, I am interested in country A, so I call so and so.... In his experience, he relies on consultants all over the world, you should take a look at him I know my address book. In June 1993, Soros invested in real estate again, only this time in the UK.Four months after he established a real estate development company with Reichman, he established an investment company to develop British real estate, consisting of Soros' Quantum Company and London-based real estate developer British Land Limited, this time He invested $775 million and acquired a 4.8% stake in British Land. If Soros buys British real estate stocks, it means that the British real estate market must be bullish.This is at least how British investors understand the impact of Soros' investment.As a result, the share prices of real estate companies on the stock market rose astonishingly: the stock prices of these companies appreciated by 667 million pounds, while the direct profit of his 5% stake in British Land Company was 5.2 million pounds.Shares in British Land rose from 198p to 434p apiece. Clearly, the Soros magic is still at work. The Guardian once said: "Last month it was gold, yesterday it was real estate. The unanimous verdict of the world investment community is that if Soros thinks something is worth buying, they will think the same." Inspired by the influence he had, Soros publicly declared that whether he planned to buy or not, his views would have an impact on the markets, as did the currency markets. In July 1993, Soros believed that the Deutsche Mark would fall.This is an obvious step by Soros", and people are not surprised. It is also an extreme move to the conclusions of a man using his supernatural influence. In a letter to The Times of London dated June 7, Soros responded to Anatoly Keris' letter of May 20.In the letter, Anatole Kelis asked Soros to attack the franc.Soros disagreed, arguing that it wasn't France's currency and bonds that should be sold, but Germany's.As for short-term interest rates in Germany, Soros believes they should be lowered.Whatever Germany's Bundesbank did, Soros wrote, "I would like the Deutsche mark to fall against other currencies, even the pound. fell, although German bond prices should technically rise when the Bundesbank cuts its short-term interest rates sharply. "The Bundesbank kept interest rates too high for too long, and it could have gradually lowered its short-term rates without damaging its credibility, but it missed the moment. Germany is now in a recession worse than France." Soros believes that if Germany's recession gets worse, sooner or later it will have to bow. "Short-term interest rates will have to come down, whether the Bundesbank wants to or not." Soros added that German bonds would rise, but their prices would fall if the exchange rate plays out. Not only Soros, financial experts also put forward some suggestions based on Soros' experience and intuition. Soros admitted that their suggestions, if followed, would bring direct benefits to his investment business. This is the third time Soros has made his investment plans public to help him increase the value of those investments. "It's a new way of making money," says David Rocher, a strategist at London-based Morgan Stanley. At the end of the letter, Soros tries to draw a clear distinction between his two professions: investor and philanthropist. "I want to draw a line between my role. In your letter, you mention both my activities in the currency markets and my activities in Eastern Europe. There is a clear distinction between the two. In Eastern Europe, I tried to promote social openness, In financial markets, I pursue profits for my shareholders and myself, my development in financial markets can fund my efforts in Eastern Europe. I don't want to make profits in Eastern Europe, and I don't want to be a philanthropist in financial markets. I do my best to avoid highly destructive speculative practices, but I see no reason not to engage in behavior that would have produced the same results without my participation. Of course, I am no better at market judgment than central banks, less Make a mistake." His authority was strengthened when the market reacted positively to his remarks about Mark. On June 11, Mark compared the price to 61 cents, and by June 25, two days after he wrote, it was down to 59 cents.Quantum's profit rose 10%, thanks to Soros' currency trading strategy. On June 23, Soros said that the mark should be devalued: the dollar will rise from 1.7 marks to 2 marks in the near future. He also criticized the German Federal Bank for not taking measures to help Eastern European countries. It is very harmful to the German economy as well as the European economy, and it is also very harmful to European integration. Not long ago, the dollar was worth 4 marks," he added, "I believe that as long as it is less than 2 marks, the dollar will be good. .