Two Minutes Reading with the Masters of Investing
George Soros has been called “the man who moves markets.” But even legends face setbacks. In 1995, his famous Quantum Fund—worth $6.1 billion—was struggling. By mid-year, it was down more than 6%, and whispers spread that Soros had lost his touch.
Yet, by September, the fund was up 24%—beating the S&P 500. How did Soros and his team pull off one of the great hedge fund comebacks?
The Struggle 📉
Early in 1995, Soros and his chief partner Stanley Druckenmiller made wrong bets on the dollar and Japanese markets. Losses piled up, and even Soros admitted he feared the fund was “sinking.” For a trader known for big, bold currency plays, the decline was both financial and reputational.
The Turnaround 📈
The comeback began in July. The fund gained nearly 9% in two weeks. By August, momentum grew, with a 17% monthly gain. September added a $100 million win in just one day. Instead of being crushed by early mistakes, Soros adjusted:
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He leaned more on stock-picking (companies like Intel and Scott Paper) rather than just currencies.
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His traders, like Nicholas Roditi, made smart, sometimes opposite bets from the main fund, reducing risk.
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Soros showed restraint—cutting back leverage when losses mounted, then scaling up again when confidence returned.
Lessons for Investors 📝
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Even greats face drawdowns. Soros’ 35% annual returns since 1969 didn’t mean smooth sailing. The best investors can be down before they’re up.
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Adaptability matters. Soros didn’t cling stubbornly to bad trades. He shifted toward stock selection and let his team’s diverse views balance risk.
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Psychology is critical. Momentum turned when wins restored confidence. Like any investor, Soros had to manage fear and self-doubt.
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Risk control saves you. Soros admitted that losing money is like a “progressive disease.” By managing leverage, he avoided permanent damage.
Why This Matters to You 🧑💼
You don’t need billions under management to learn from Soros. Every investor will face losing periods. What counts is:
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Staying calm instead of panicking.
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Shifting strategies when conditions change.
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Protecting your capital so you can fight another day.
Soros’ 1995 comeback is a reminder that resilience—not perfection—builds wealth over time.
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