Invest First and Investigate Later

This was the immeasurable ability to know when to speculate heavily, when to pull out of an investment position-when, in effect, you were on the mark, and when you were not.

"Basically," said Soros, "the way I operate is I have a thesis and I test it in the market. When I'm short and the market acts a certain way, I get very nervous. I get a backache and then I cover my short and suddenly the backache goes away. I feel better. There's where the instinct comes in."

Summing up George Soros's investment skills, Morgan Stanley's Byron Wien suggested that "George's genius is that he has a certain dis-

opportunity, and to cut his losses when he's wrong He has great conviction when he's sure that he's right as he was in the sterling crisis

Part of Soros's instinct was in detecting movement, one way or the other, in the stock market. This was not something one could learn in school; it was not part of the curriculum at the London School of Economics. This gift is one that few possess. And Soros had it. Edgar Astaire, his London partner, had no trouble pointing out the source of Soros's success:

"His greatest key to success is his psychology. He understands the herd instinct. He understands when lots of people are going to go for something, like a good marketing man."

Perhaps Soros's most distinctive feature, the trait that explained his investment talents best, was his ability to gain membership in a very exclusive "club," a club that included the leadership of the international financial community.

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