George Soros may have made a billion dollars short-selling the pound sterling, earning him the title of "The Man Who Broke the Bank of England," but what he really wanted to be was a philosopher.
The co-founder and manager of the Quantum Fund -- an international hedge fund that today manages over $27 billion in assets -- made a bold move in the early '90s to short-sell the pound sterling, speculating that the British government would be forced to break from the European Mechanism (ERM) and allow the British pound to devalue in relation to other currencies.
But as a young man growing up in Hungary in the 1940s, Soros was consumed by philosophy. By the time he was a teenager, Soros was well-versed in a variety of classical schools of thought -- from Plato to Epictetus to Archimedes. But as a Jew living in Nazi-occupied Hungary in 1944, Soros learned his first lesson in survival, making an indelible mark on his character and personal philosophy.
Soros emigrated to England in 1947 where he attended the London School of , earning a Bachelor of Science in Philosophy. In 1956 he moved to the U.S. where he worked as a broker and stock analyst. He co-founded the Quantum Fund in 1969 along with Jim Rogers. Since then, the fund has grown into one of the most successful family of hedge funds, most recently pulling in $1.1 billion in 2008 -- a year when the majority of funds were recording losses.
Throughout his career, Soros never abandoned his philosophical roots, authoring several books on economic theory, including The Alchemy of Finance. Soros also founded the Open Society Institute, which supports numerous humanitarian projects throughout the world, from fighting disease and poverty to fostering democracy.
Today he remains one of the largest contributors to humanitarian projects, donating more than $6 billion to social initiatives throughout his career. Soros is a passionate investor, avid philanthropist and a fierce supporter of democratic ideals.
Here are 50 quotes from George Soros that may challenge everything you thought you knew about investing.
1. "If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring."
2. "I'm only rich because I know when I'm wrong...I basically have survived by recognizing my mistakes."
3. "I very often used to get backaches due to the fact that I was wrong. Whenever you are wrong you have to fight or [take] flight. When [I] make the decision, the backache goes away."
4. "When money is free, the rational lender will keep on lending until there is no one else to lend to."
5. "The financial markets generally are unpredictable. So that one has to have different scenarios... The idea that you can actually predict what's going to happen contradicts my way of looking at the market."
6. "I was a human being before I became a businessman."
7. "Markets are constantly in a state of uncertainty and flux, and money is made by discounting the obvious and betting on the unexpected."
8. "The worse a situation becomes, the less it takes to turn it around, and the bigger the upside."
9. "Once we realize that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes."
10. "Stock market bubbles don't grow out of thin ai They have a solid basis in reality, but reality as distorted by a misconception."
11. "We are the most powerful nation on earth. No external power, no terrorist organization can defeat us. But we can defeat ourselves by getting caught in a quagmire."
12. "Most of the poverty and misery in the world is due to bad government, lack of democracy, weak states, internal strife, and so on."
13. "Whenever there is a conflict between universal principles and self-interest, self-interest is likely to prevail."
14. "If we care about universal principles such as freedom, democracy and the rule of law, we cannot leave them to the care of market forces; we must establish some other institutions to safeguard them."
15. "We can speak of the triumph of capitalism in the world, but we cannot yet speak about the triumph of democracy. There is a serious mismatch between the political and the economic conditions that prevail in the world today."
16. "I chose America as my home because I value freedom and democracy, civil liberties and an open society."
17. "A full and fair discussion is essential to democracy."
18. "Markets are constantly in a state of uncertainty and flux, and money is made by discounting the obvious and betting on the unexpected."
19. "Markets are designed to allow individuals to look after their private needs and to pursue profit. It's really a great invention, and I wouldn't underestimate the value of that. But they're not designed to take care of social needs."
20. "Misconceptions play a prominent role in my view of the world."
21. "Regulating and taxing marijuana would simultaneously save taxpayers billions of dollars in enforcement and incarceration costs, while providing many billions of dollars in revenue annually."
22. "Globalization has rendered the world increasingly interdependent, but international politics is still based on the sovereignty of states."
23. "The world is looking to us for leadership. We have provided it in the past; the main reason why anti-American feelings are so strong in the world today is that we are not providing it in the present."
24. "A global economy is characterized not only by the free movement of goods and services but, more important, by the free movement of ideas and of capital."
25. "The main enemy of the open society, I believe, is no longer the communist but the capitalist threat."
26. "It is much easier to put existing resources to better use, than to develop resources where they do not exist."
27. "When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold."
28. "I called gold the ultimate bubble, which means it may go higher. But it’s certainly not safe and it’s not going to last forever."
29. "As I discovered, there is a great deal of similarity between a boom-bust process in the financial markets and the rise and fall of the Soviet system."
30. "Economics seeks to be a science. Science is supposed to be objective and it is difficult to be scientific when the subject matter, the participant in the economic process, lacks objectivity."
31. "If I had to sum up my practical skills, I would use one word: survival. And operating a hedge fund utilized my training in survival to the fullest."
32. "The hardest thing to judge is what level of risk is safe."
33. "Unfortunately, the more complex the system, the greater the room for error."
34. "The generally accepted view is that markets are always right -- that is, market prices tend to discount future developments accurately even when it is unclear what those developments are. I start with the opposite view. I believe the market prices are always wrong in the sense that they present a biased view of the future."
35. "Making an investment decision is like formulating a scientific hypothesis and submitting it to a practical test. The main difference is that the hypothesis that underlies an investment decision is intended to make money and not to establish a universally valid generalization."
36. "Taking this view, it is possible to see financial markets as a laboratory for testing hypotheses, albeit not strictly scientific ones. The truth is, successful investing is a kind of alchemy."
37. "I would be lying, however, if I claimed that I could always formulate worthwhile hypotheses on the basis of my theoretical framework. Sometimes there were no reflexive processes to be found; sometimes I failed to find them; and, what was the most painful of all, sometimes I got them wrong. One way or another, I often invested without a worthwhile hypothesis and my activities were not very different from a random walk."
38. "Money values do not simply mirror the state of affairs in the real world; valuation is a positive act that makes an impact on the course of events. Monetary and real phenomena are connected in a reflexive fashion; that is, they influence each other mutually. The reflexive relationship manifests itself most clearly in the use and abuse of credit."
39. "The main obstacle to a stable and just world order is the United States. [This idea] happens to coincide with the prevailing opinion in the world. And I think that's rather shocking for Americans to hear."
40. "It is credit that matters, not money (in other words, monetarism is a false ideology)."
41. "The concept of a general equilibrium has no relevance to the real world (in other words, classical economics is an exercise in futility)."
42. "The only thing that could hurt me is if my success encouraged me to return to my childhood fantasies of omnipotence -- but that is not likely to happen as long as I remain engaged in the financial markets, because they constantly remind me of my limitations."
43. "If we carry this line of argument to its logical conclusion, the meaning of life consists of the flaws in one's conceptions and what one does about them. Life can be seen as a fertile fallacy."
44. "When you sell options, you get paid for assuming risk. That can be a profitable business, but it does not mix well with the risks inherent in a leveraged portfolio."
45. "The trouble with institutional investors is that their performance is usually measured relative to their peer group and not by an absolute yardstick. This makes them trend followers by definition."
46. "In the case of a meltdown, the regulatory authorities may find themselves obliged to step in to preserve the integrity of the system. It is in that light that the authorities have both a right and an obligation to supervise and regulate derivative instruments."
47. "We [at Soros Fund Management] use options and more exotic derivatives sparingly. We try to catch new trends early and in later stages we try to catch trend reversals. Therefore, we tend to stabilize rather than destabilize the market. We are not doing this as a public service. It is our style of making money."
48. "Every bubble consists of a trend that can be observed in the real world and a misconception relating to that trend. The two elements interact with each other in a reflexive manner."
49. "I contend that financial markets never reflect the underlying reality accurately; they always distort it in some way or another and the distortions find expression in market prices. Those distortions can, occasionally, find ways to affect the fundamentals that market prices are supposed to reflect."
50. "I am for maximum supervision and minimum regulation."