Motivos paternos para no vacunar a sus hijos

The trouble was: The guru didn’t speak that often.

How then to ferret out what he was up to? Just how did other inves-tors nd out what Soros was buying?

They looked for what market specialists call “footprints,” clues indicating the direction or emphasis of an investment. The search for footprints was a must, for investors like Soros, even when making public statements, did not advertise when they were taking a position or how much they were investing.

Those footprints were very hard to nd. One way was to notice a steady trend in the same direction in a class of securities that typically had little volatility.

Bill Dodge, senior vice president of equity research and chief invest-ment strategist at Dean Witter Reynolds, explained: “If the Dow is down 50 points, and the traders say they don’t see a lot of trading, and I start to look around and it’s all in the Dow stocks and the dollar is weak against deutsch marks, I might conclude correctly that you had a foreign seller of American stocks either from Germany or shifting to German nancial assets. The behavior of unrelated markets, or corre-lated markets, that is unusual is the kind of thing I’m talking about.”

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With so much interest in George Soros, it was easy to get tricked into believing that he was behind the movement of a stock-when in fact he was not. “The way to get somebody fooled quickly today,”

noted Dodge, “is to see something moving quickly and say George is buying. If the market comes to believe that it’s George, it may do things. Just saying somebody is doing something can have an effect.”

Soros’s traders kept tight lips about what they were doing. Still, other traders sometimes could detect when Soros was active on the market. As Bill Dodge explained, a group of traders might begin to notice that each time they sell a stock for someone, the stock does not drop. This makes them wonder why. The traders listen carefully to what their colleagues are saying in off-handed conversations to one another. One might say that he sold a lot of oil and the price didn’t drop. Another could respond that he noticed the same thing.

But none of the traders has sources within the Soros organization, at least not current ones. Nonetheless, they might still be able to deduce what George was up to.

Again, Dodge offered help: “I may call you up and say I want to buy-you make a market for me. I go all around the hub and there’s 25 guys and you told me three months ago over beers you were doing a lot of business with George. You don’t tell me what kind of business.

I call you and say I want to buy from you and you say no. We’d be in competition. You’re the only one out of 25 who won’t sell and all the other 25 people keep selling. And you seem to have a relationship with George. Then the market would deduce that you are buying for Soros.”

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Imbued with his status as a guru, George Soros seemed to have the kind of touch that could turn almost anything into precious gold.

Real estate was a good example.

Until early in 1993, Soros had stayed away from investments in real estate. For some time, however, that area had been nancially depressed; the slump had begun back in the 1980s, when developers had overbuilt. Now there was a crisis, but it did not scare off Soros, who suddenly acquired a taste for it. He saw the crisis as simply another buying opportunity. Still, it seemed strange for Soros to be

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entering the eld, stranger still that he would choose Paul Reichmann as his partner.

Soros announced on February 8, 1993, that he was establishing a

$225 million real estate fund that Reichmann would manage. The new fund, to be called Quantum Realty Fund, represented Soros’s gamble that the depressed real estate market would turn around in the near future.

The Reichmann brothers-Paul, Albert, and Ralph-had been knocked for a loop when the real estate market collapsed. Before that the fami-ly’s real estate holdings in Canada, New York, and London had been worth billions of dollars. Major portions of the Reichmann holdings, however, had entered bankruptcy proceedings when their rm, Olym-pia & York, suffered heavy losses due to the development of the London nancial center known as Canary Wharf. Paul Reichmann had been the controlling shareholder of Olympia & York.

None of this seemed to matter to George Soros. He told the New York Times: “They [the Reichmanns] were the most successful real estate developers in the world. I am basically looking to invest my own money and I want to go with the best.” Soros and Reichmann pledged between $75 million and $100 million to the new fund; most of the capital would come from existing Quantum Fund shareholders.

The following September, the new Soros-Reichmann fund made its rst purchase: a $634 million package of foreclosed real estate and troubled mortgage loans from Travelers Corporation, the huge insur-ance rm. The purchase represented one of the largest bulk sales of real estate assets in history. Then, in November, Soros and Reichmann announced plans to build three real estate projects in Mexico City that could cost as much as $1.5 billion.

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George Soros could sway markets once it became known that he was trading in a certain stock or currency or commodity. In effect, he could become the catalyst for trend-following behavior in the markets.

It happened in April 1993. This time it really was gold that he seemed to be targeting.

Ination had remained low in recent months, but in Soros’s view, it was poised to rise again. That would make gold, although it paid

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no dividends, a better store of real value than stocks, real estate, or bonds.

Accordingly, the Quantum Fund purchased between 2 and 3 mil-lion ounces of gold at $345 an ounce. Soros also invested nearly

$400 million in Newmont Mining, purchasing 10 million shares at

$39.50 a share from Jacob Rothschild and takeover artist Sir James Goldsmith. With a 13 percent ownership, Soros was the rm’s second biggest shareholder. Goldsmith remained rst with a 30 percent share.

Rothschild had just under 5 percent.

Soros, Goldsmith, and Lord Rothschild were all close acquain-tances. One link between Soros and the Rothschild rm was Nils Taube, Rothschild’s chief investment ofcer, a nonexecutive director of the Quantum Fund, and a close Soros associate for many years.

Sure enough, when traders spotted the footprints of the investor as those of George Soros, the price of the metal soared. Once word got out, there was massive speculative gold purchasing on the busiest trading day in gold in recent history. An ounce of gold rose nearly $5 to over $350 in London, the rst time since October 1992 that it had passed that mark.

A footnote to Soros’s venture into gold: By the end of the summer of 1993, Soros apparently had taken his winnings and gotten out. The Sunday Times of London reported on August 15 that Soros had sold his entire holdings in gold bullion at between $385 and $395 an ounce.

Soros appeared to be cutting his losses: The price of gold had soared to over $400 an ounce in London two weeks earlier, but then plunged sharply.

The early part of 1993 went well for Quantum. In the rst four months the fund was up 18 percent, in part due to a successful bet on the Nikkei when it was around 16,000 points. By May 11, 1993, the Nikkei had risen to 20,000 points.

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In case anyone had any doubt about George Soros’s market powers, he attempted to set the record straight. Interviewed on CNN’s “Business Day” program by Deborah Marchini on April 26, 1993, Soros disputed her contention that the late rise in gold prices had been the result of good news from Russia, where Boris Yeltsin and his economic reforms

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