Although closed to outside investors since 2011, Soros’s Quantum hedge fund remains one of the most successful investment vehicles in the world. Over its four decades in existence, Quantum’s average annual return of 20% has produced over $40 billion worth of investment gains. So how did Soros do it? 🤔

Much has to do with Quantum’s “global macro” strategy – an approach it shares with Ray Dalio’s blockbuster hedge fund Bridgewater Associates. Global macro funds both invest in (“go long”) and bet against (a.k.a. “short”) a wide range of investments around the globe, the idea being to profit from broad economic and political trends. A global macro investor might take the view that the US economy will perform better than Europe’s. They’d then buy a basket of US stocks, short a basket of European ones, and perhaps short the euro versus the dollar for good measure.

Global macro funds enjoy more flexibility than other hedge fund strategies. For one thing, they can invest in anything from traditional stocks and bonds to complex commodity futures and arcane interest rate swaps. They also simultaneously operate across short, medium, and very long time horizons. A global macro fund manager’s investment edge comes from anticipating the effects of large-scale macroeconomic and political shifts – and successfully positioning their portfolio to profit accordingly 🔭

And arguably nobody’s done this better than George Soros. His signature move involved making billions of dollars’ worth of gains in a matter of days by correctly predicting big currency swings. The most famous example of this was Soros’s $10 billion bet against the British pound in 1992 – and the day which saw him help “break” the Bank of England…