The Imperial Circle

laser gun. He could see straight through you. He always felt he wanted you around, but he never thought you were going to get it right, he would just tolerate you. Almost like you were a lesser being.

"All he asked of you is that you believe what you're telling him, that you constantly examine and cross-examine. He would try to go to the jugular, and say, vDo you still believe what you told me yesterday?"' Soros was not quick to lavish praise on others, or share credit when investments paid off.

"Sharing [credit] with him is a constant fight," asserted Marquez. "He figures this is the major leagues, and this is after all an economic, not an academic exercise. Your success is being determined in dollar and cents, and you're being paid to win."

Working with Soros could be intoxicating as well.

For a thirty-something like Jim Marquez, the life that George Soros led was ... well, different from his own.

He remembered with great fondness the time that Soros asked him to come along to a board meeting of the Soros Fund in Ireland. The site was a castle, the same one Ronald Reagan later visited as president. "It was a very rarified atmosphere." Over dinner with the directors, Marquez listened, enthralled as Soros moved easily from one language to another, English to French to German, depending upon what language a certain director spoke.

But the danger existed that one could be mesmerized by working with such a genius. "He could be so intellectually dominating that if you became intimidated, if you became a yes-man, clearly you were not doing him any good, and you were not doing yourself any good," observed Marquez.

"If you said, I want to be a little Soros, I want to be a world thinker, to think great thoughts, to be a great portfolio manager, and I'm going to do and act the way he does, it was clear that he didn't need that in the office. He may need it now [1994] but he didn't need it then. That's a real siren call, to want to be like this fellow, because if you really think he's a paradigm in the business, you quickly realize you're not equipped, you're just not equipped."

Soros and Marquez enjoyed a good year in 1983. The fund now stood at $385,532,688, a net increase of $75,410,714 million, or 24.9 percent over 1982.

That same year George Soros married for the second time. His bride was 28-year-old Susan Weber. According to newspaper reports, Soros showed up late for the wedding because he had been playing tennis.

Other articles in the media reported an embarrassing moment at the wedding ceremony-one that Soros might have avoided had he taken the time to rehearse the ceremony. According to these articles, when the minister asked Soros if he was willing to give all his worldly goods to his new wife, Soros turned white. One of Soros's sons pretended to cut his throat, apparently trying to suggest to his father, perhaps half jokingly, "There goes the fortune." Soros quickly looked behind him at his personal attorney William Zabel, as if to say: "If I repeat the traditional vow vFor better or worse, I do endow thee with all my worldly goods' would I really be bound to give everything to Susan?" Zabel saved the day by indicating to Soros that no harm would be done by his answering. Just to be on the safe side, Soros mumbled in Hungarian, "Subject to my prior agreements with my heirs." With that, the ceremony carried on.

While 1983 had been a good year, 1984 was not. The fund was up, but only 9.4 percent, to $448,998,187.

The lower profit put Soros under pressure from board directors at Quantum to return full-time to investing. He agreed. Late in the summer of 1984, Soros broke the news to Marquez.

"Like it or not, I'm the captain of this ship, and I see a hundred-year storm coming. In a hundred-year storm, you want the ablest, best, most experienced hand at the helm. And let's face it, between the two of us, that's me."

What exactly was the hundred-year storm?

Essentially, it was the collapse of the American economy in the wake of Reagan's high-spending, no-taxing policies from the early 1980s. The United States, Soros believed, was heading for a depression.

Marquez recalled: "All this pressure was building in the world system at that point. The dollar was getting stronger and stronger. Reagan kept saying: vThis is fine. The sign of a country's true strength is the strength of its currency.' And George Soros thought this would just blow the lid off at some point."

Soros announced his plan to hire two other people. To Soros, the ideal organization had four or five professionals, providing a depth and discipline that could not exist in a one- or two-person shop. Marquez could, if he wished, stay on in a lesser position and run a subgroup. Marquez decided to leave, believing that he was being shunted aside and would have less authority. He acknowledged, though, that "the truth of the matter is that George wasn't wrong. There were times at night I'd get these thromboses of the head where I couldn't deal with it all. There was so much going on-and pressure."

Meanwhile, Soros had canvased his 10 outside fund managers for fresh blood. The name Allan Raphael came up.

"I was his first draft choice," said Raphael.

From 1980 to 1984, Raphael had been codirector of research at Arn-hold & S. Bleichroeder, the firm that had employed Soros in the 1960s and early 1970s. Raphael returned to Bleichroeder in December 1992 as senior vice president, director of global strategy, and senior portfolio manager.

In early August 1984, Soros decided to seek out Raphael. The two men had never met, though Raphael knew Soros by reputation. Several of Soros's outside managers had phoned Raphael to inform him that they had recommended him to Soros as a candidate for the number two job. His background in global economic research made him a natural.

"Would you be interested in talking with George?" one manager asked Raphael.

It took Raphael only "a nanosecond," as he recalled. "Of course," he replied to the manager.

Raphael believed Soros to be the best investor on Wall Street. "His triumphs were just phenomenal." The possible job offer seemed to Raphael too good to be true.

Then came the phone call from Soros himself. Could Raphael come over for breakfast to his Central Park West apartment the following Thursday?

Another nanosecond flashed by, and Raphael said yes.

Raphael arrived at the breakfast convinced that his chances of getting a job offer were one in a million. He assumed that another 75 candidates were in line, that the job selection process would take another year-at which time he would be passed over.

Ninety minutes passed, but Raphael attributed little signiffcance to the length of the breakfast. Then the two men rose from the table. Raphael thought it a good time to sum himself up for Soros.

"It's very important for you to know what I do and what I don't do," he said, hoping he didn't sound too aggressive, too forward. He was not sure Soros had absorbed his words.

"Perfect," came the response to the summary. "I do all the other things. We would be a good team."

Raphael was taken aback. "I guess so" was all he could say in a small, faint voice.

Soros flashed his big smile and said with a degree of ffnality: "You think it over the weekend. We'll meet on Monday or Tuesday. Call me up. You'll come over again for breakfast."

Walking out the apartment door and on to the street, Raphael began mulling over the last few minutes of the breakfast. He hailed a cab and sat down inside it, a big grin on his face. Perhaps he was dreaming. Making sure the cabdriver wasn't looking, Raphael pinched himself. He decided he had not been dreaming. He just might be going to work for George Soros as his number two.

The following Tuesday found Raphael once again eating breakfast with George Soros. A formal job offer was actually made.

It was, as Raphael recalled, "basically, 'Let's get engaged before we get married. I'll keep you for the rest of the year. Let's see how it works out."'

Again, a nanosecond passed. But for some reason that, years later, Raphael found hard to comprehend, he did not accept right there on the spot.

"Let me think about it," he answered. Reliving that meeting in the spring of 1994, Raphael could only say: "It seemed the right thing to say."

Recalling the warnings from others ("This guy is tough," "He ffres people"), Raphael decided to overlook them: "Who cared? This was my chance. So I'd get knocked around a bit; it was just an extraordinary opportunity." Raphael went for the phone and accepted the offer. In early September 1984, Raphael signed on with Soros.

Lessons From The Intelligent Investor

Lessons From The Intelligent Investor

If you're like a lot of people watching the recession unfold, you have likely started to look at your finances under a microscope. Perhaps you have started saving the annual savings rate by people has started to recover a bit.

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