To be in the game you have to be willing to endure the pain

in Manhattan where he was running his own investment fund. "A lot of times he likes to see if you can keep up with where he's going and what he's doing. And then there are times when he ... wants to see the tenor of your least for a while.

Marquez reported for work on January 1, 1983. Soros turned over half of the fund's pool money to him; the other half was given over to 10 outside managers. Apart from handling all of the domestic trading, Marquez backed Soros in international investing. And so it was Soros on a back burner, Marquez at full flame, and three others who kept the heat up in the trading room.

Though Soros adopted a lower profile, he managed to come into the office a great deal. Still, he spent long periods abroad-six weeks in the late spring in London, a month in the Far East or Europe in the fall. Summers were reserved for Southampton, Long Island.

Soros and Marquez seemed well attuned to one another. Soros engaged in macro analysis, scanning the big picture: international politics, monetary policies around the globe, changes in inflation, interest rates, and currencies; Marquez, for his part, sought out industries and firms that would best take advantage of these expected new alignments.

If the expectation was that interest rates would rise, for example, Soros had Marquez scout out industries that would be hurt in order to short stocks in those industries. Soros employed the technique of selecting two companies in an industry for investment. But not just any two.

One had to be the best company in the industry. As the preeminent player, this firm's stock would be purchased first and most frequently, pushing the price up. The other had to be the worst company in the industry, the most highly leveraged, the one with the worst balance sheet. Investing in this company afforded the best chance to make large profits once the stock finally caught on with investors.

The first four months of 1983 were "sort of a culture shock" to Marquez, a time when the new man came to realize that "this august fellow had really given me all the autonomy and authority-and money-and

"When choosing stocks in an industry, pick two, but not just any two. Pick the best and the worst."

the rope to hang myself."

To prepare for work each morning, Marquez went through a ritual, sometimes in the shower, sometimes riding to work: He mapped out scenarios of what might happen that day in the financial markets. He called these his "framework of expectations," and from that framework he drew conclusions on what to buy.

Once the trading day was over in New York, Soros and Marquez engaged in rigorous review sessions, often lasting well into the evening. "It was exhilarating," observed Marquez, "but very straining. The one thing George Soros is very good at is that he can look at you when you're explaining something and he can tell when you're rationalizing."

Soros never let up, grilling his right-hand man as if he were giving an oral exam to a doctoral student. "Do you have any different thoughts than you did this morning?" he often began, and then rattled off an endless stream of questions-probing, searching for reasons why Marquez might have guessed wrong. Marquez remembered the review sessions as harrowing experiences: "Because he was constantly looking for the soft underbelly, he was constantly trying to find out what was wrong with your story.

"George would try to find out if the market was acting differently from what you expected. Let's say I expected bank stocks to go up and if bank stocks were sideways to down for any amount of time, he would say: 'Let's go over our assumptions. Let's go over the reasons why you're doing this, why the perceptions are that this should happen, and then try to reconcile [that] with what the market is saying.'"

If at first Soros appeared to be playing the gray eminence around the office, he gradually got on Marquez' nerves "because you felt like you were constantly being second-guessed. You constantly had to stand up to a level of intellectual nitpicking. I shouldn't say nitpicking, just a picking away, constantly probing, and after a while, it's very wearying. Very wearying.

"A lot of times you would do things exactly as you thought he wanted them done, and he would come back to you like a teacher talking to a pupil, and say, 'You didn't understand that. That's not what I meant.' Then you'd be totally discombobulated because you thought you had a perfect understanding.

"It was very easy for him to lose his temper. He had a way of looking at you with such penetrating eyes that you felt you were under a

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