Algemeen·NRC·31 aug

What makes a great investor?

One day in 1992 Stanley Druckenmiller marched into his boss’s office, saying: „George, I’m going to sell $5.5bn-worth of British pounds tonight and buy Deutsche marks.” George was George Soros and Mr Druckenmiller, his protégé, was running his „Quantum” hedge fund. The idea was that the Bank of England was trying to sustain an unsustainable exchange-rate peg which speculative pressure could break, forcing the depreciation of the pound and netting Quantum a huge profit. But the $5.5bn would put 100% of the fund’s assets behind one wildly risky bet. „That is the most ridiculous use of money management I ever heard,” Mr Soros said. „We should have 200% of our net worth in this trade.”