George Soros started out poor, but he was rich in ideas, first learned from his father. He parlayed these ideas into a fortune by trading, then gave away vast amounts to promote democracy in the East. Always a gambler, any advice he could give could be useful. His flagship fund, the Quantum Fund, has had an average annual return of 32.63% for the past 29 years (1969-1997). The figures stop at 1997 for good reason. Things have not been quite so hot lately.
Now if you'd started with a bankroll of $100,000 back in 1990, and found yourself in Las Vegas, Reno or Atlantic City, and had decided to "invest" some of those imaginary dollars at Caesar's Palace, for example only, would you now be head of some financial empire with enough in profits to bankroll the state of ancient Rome?
You could have done worse than to invest in the Fraternity Fund Ltd. (minimum investment $25,000) whose primary objective is to achieve growth (long-term capital appreciation) or above-average capital gains. This fund only invests in funds that are either directly or indirectly managed by George Soros or Soros Fund Management (SFM). That's a pretty hefty recommendation. The advice from "the horse's mouth" must be pretty good, and you'd certainly have to go a long way in Las Vegas ever to find someone to whom you could entrust your hard-earned cash for gambling returns of this magnitude.
It's January 4th, 1990 and you're standing outside Caesar's Palace, Las Vegas, dreaming about those Empires you're going to establish long after the Romans just vanished from the scene, although there's a chariot waiting to take you for a tour right now. The advice is: take $10,000 for fun into the casino, and stuff the other $90,000 safely up, in or round your toga. If you come out of Caesar's with a profit, that's fine, or even if you come out with your original stake of $10,000, that's fine too. Now take the $100,000 to the Fraternity Fund, hand over the cash, then come back on the November 20th, 1998 to see what you'd get. You'd collect $784,211. Thank you, Mr. Soros.
In The Crisis of Global Capitalism, a new book just published, Soros argues that the world's financial system is set for a complete breakdown - and only cooperation and reforms on an international scale can prevent it.
But what has George got to say? You'd be surprised: "Hope made me feel insecure, worrying made me feel safe." This is from the man who has made billions one year and then lost a personal fortune worth billions more - on the next unanticipated downturn. It's dangerous to extrapolate, but does this mean you really ought to consider feeling worried when you decide on some gambling entertainment? If you visit La Playa Pit at Harrah's Las Vegas, you'll be positively encouraged to get in the party mood in a kind of laugh-a-minute back-slapping pantomime where the dealers smile back at you in a personal kind of way. Here's what George has to say.
Look for the Fly in the Ointment
As a fund manager, I depended a great deal on my emotions. That was because I was aware of the inadequacy of my knowledge. The predominant feelings I operated with were doubt, uncertainty and fear. I had moments of hope, even euphoria, but they made me feel insecure. By contrast, worrying made me feel safe. So the only genuine joy I experienced was when I discovered what I had to worry about.
By and large, I found managing a hedge fund extremely painful. I could never acknowledge my success because that might stop me from worrying, but I had no trouble in recognizing my mistakes. It is wise to be constantly looking for the fly in the ointment.
Learn from Your Experience
Only when others pointed it out to me did I realize that there might be something unusual in my attitude to mistakes. It made so much sense to me that discovering an error in my thinking should be a source of joy rather than regret, I thought it ought to make sense to others as well. But when I looked around, I found that most people went to great lengths to cover up their mistakes. It gave me great pleasure to acknowledge a mistake, because I knew that it could save me from future grief.
I will never forget visiting Argentina in 1982 to look at the mountain of debt that country had accumulated. I sought out a number of politicians who had served in previous governments and asked them how they would handle the situation. To a man, they said they would apply the same policies they followed when they were in government. They refused to learn from the experience.
I carried my critical attitude into my philanthropic activities. I found philanthropy riddled with paradoxes and unintended consequences. For instance, charity may turn the recipients into objects of charity. Giving is supposed to help others, but in reality it often serves to gratify the ego of the giver. What is worse, people frequently engage in philanthropy because they want to feel good, not because they want to do good. . .
Worrying is the Key to Success
I have mellowed with time. There is a difference between running a hedge fund and running a charitable foundation. Heading a large foundation requires people skills, and people do not like critical remarks. They want praise and encouragement. Not many people share my predilection for identifying error and even fewer share my joy in it.
I used to find public expressions of praise and gratitude extremely painful. But I have come to realize that this is a reflex left over from the days when I was actively managing money, when I had to be guided by the results of my actions, not by what other people thought of them. . .
Whether it can continue [the Foundation] to function properly, given my changed attitude toward praise, is a question that troubles me. But as long as I am troubled, the answer will probably still be yes. Worrying is the key to success.
So that's it! Start worrying fast. Whether you book into The Mirage or Caesar's Palace or wherever, when handing your keys to the car valet, look worried. Start looking for the fly in the ointment. It's not enough to look worried, you must feel and act worried too. What if you lose your entire bankroll? What if the slots are as tight as hell? What if the cards fall the wrong way all night? Tell yourself that "Worrying is the key to success" and you may just be lucky. Whatever happens, at least you'll learn from the experience. . .
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