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and Soros would not be able to get a percentage of the profits from their company's stock trades, they left to start their own firm. In 1973, they set up Soros Fund Management.20

The Double Eagle Fund became the Soros Fund in 1973 and was renamed the Quantum Fund in 1979—in tribute to Werner Heisenberg's uncertainty principle in quantum mechanics. That principle asserts that it is impossible to predict the behavior of subatomic particles in quantum mechanics. The fund did so well that it charged a premium based on the supply and demand for its shares.21 The premium/discount reflects shareholder sentiment.

When they parted in 1980, Rogers left the firm taking his 20 percent interest valued at $14 million. Soros's 80 percent was worth $56 million.22 The fund went through what Soros described as a boom/bust cycle from 1979 to 1981. A brief interregnum followed during which he carved out portions of the fund to other managers. Then he conducted a real-time experiment where he used the financial markets to test his theories, which became the basis for his book The Alchemy of Finance. This was followed by the crash of 1987—another boom/bust sequence. The reign of Stanley Druckenmiller as chief investment strategist of the Quantum Fund began in 1989 and lasted until April 2000.23

In 1991–1992, Soros expanded his operation. Quasar Fund was started in 1991 with money allocated to 15 outside managers. Quantum Emerging Growth Fund, begun in 1992, focused on emerging-market stock markets. And Quota Fund, a fund of funds allocating assets to 10 outside managers, was started in 1992.

Survival Skills

To Soros, the key to his investment success has been his skill at surviving. In Soros on Soros, George recalls that 1944 was the happiest year of his life. "This is a strange, almost offensive thing to say because 1944 was the year of the Holocaust. . . . For a 14-year-old boy, it was the most exciting adventure that one could ever ask for. It had a formative effect because I learned the art of survival from a grand master. That has had a certain relevance to my investment career."24

"I was fortunate enough to have a father who was highly skilled in the art of survival, having lived through the Russian revolution as an escaped prisoner of war."25 His father, Tivadar, was on the run in Siberia