At Coattail Investor, we often refer to Warren Buffett as the "World's Greatest Investor". If Mr. Buffett is indeed the greatest, then George Soros is likely a close second. In fact, people have referred to Soros as the "Warren Buffett" of hedge funds. Regardless of how you choose to label him, Soros is a phenomenal investor. He has assured his place in numerous history books based on his funds' astonishing historical returns. His flagship Quantum Fund returned an average yield of over 30% during its more than 30 year existence. This phenomenal streak was only halted by the merger of Soros' Quantum Fund and his Emerging Growth Fund to create the Quantum Endowment Fund in mid-2000.

Born in Budapest, Hungary, in 1930, Soros survived that country's Nazi occupation before moving to London to study at the prestigious London School of Economics (LSE). There he was exposed to the works of famous 20th century philosopher Karl Popper; these had a great impact on Soros' outlook at the time and would later influence his approach to investing. Although the days of betting huge against a currency to record a $1 billion dollar gain in one day may have come to an end when Soros merged his two funds, this savvy market guru remains influential.

Soros and his management firm differ in many ways from most of the other investors we Coattail. For starters, his fund is not a mutual fund, but rather a hedge fund. The biggest difference between these investment vehicles is the way in which they are run. Hedge funds not only take long and short positions in equities; they also use options and other derivatives and speculate on currencies. These are just some of the means they use to create wealth for their clients.

The hedge fund industry is quite different from the mutual fund industry. However, there is one major similarity: both industries seek to create wealth and attain high returns for clients and investors. Based on that, tracking the movements of Soros Fund Management LLC is a great strategy. For the individual investor, simply being aware of what skilled investors like George Soros and his team of managers are doing is advantageous. You may remember headlines way back in 1992 when Soros capitalized on a decline in the British pound to the tune of $1 billion. Not bad for a day's work. Although the Soros team invests differently than some of our other managers keeping an eye on any major moves they make will be interesting.