"There came a day when I was rereading what I had written the day before, and I couldn't make sense of it," he later reminisced in his 1995 book, "Soros on Soros." "That was when I decided to get back into business ... I thought that I had some major new philosophical ideas, which I wanted to express. I now realize that I was mainly regurgitating Karl Popper's ideas."

While Soros was what he liked to call a "failed philosopher," he excelled as a money manager. In 1969 he went out on his own and established a private investment partnership, or "hedge fund," that would evolve into what is now the Quantum Fund. His success was quick and conspicuous: Throughout the awful bear markets of the 1970s, when most investors lost money, Soros' fund was profitable every year, and sometimes he even scored double-digit returns. Quantum had only one losing year in its first two decades -- ironically, it was 1981, when Institutional Investor jinxed Soros by putting him on its cover as "the world's greatest money manager."

But Soros' biggest embarrassment came in October 1987: For a Fortune cover story titled "Are Stocks Too High?" Soros predicted that the U.S. market wouldn't fall. Only days later Wall Street suffered the crash of '87. Soros took a $300 million hit, making him one of the biggest losers in the debacle. But even with that big blow, Quantum was actually up 14 percent for the calendar year -- a year when Soros' personal compensation of $75 million made him the second-highest-paid man on Wall Street. He could pull triumph out of disaster.

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Soros settled into his reign as the King of the Street. In 1992, the year that he made his gutsy $10 billion bet on the British pound, Soros' compensation was $650 million. It was the most lucrative year for any individual in Wall Street's recent history. (Even Michael Milken reported an annual income of only $550 million at his peak.) In 1993, Soros topped the rest of his peers by making $1.1 billion, which was more than the annual profit of the McDonald's Corp. Financial World calculated that Soros' pay was greater than the gross national product of 42 nations. In retrospect, a billion bucks a year seems relatively modest compared with the Internet fortunes of the late '90s, but back then it was real money.

Soros' success sprang partly from his extraordinary energy and relentless drive. He often tested the stamina of his butler and cook by sleeping for only two hours a night before returning to work. But Wall Street is full of supercharged workaholics, which begs the question: What was Soros' secret? His basic theory of investing was that financial markets are chaotic. The prices of stocks, bonds and currencies depend on the human beings who buy and sell them, and those traders often act out of highly emotional reactions rather than coolly logical calculations.

Soros didn't accept the prevailing theory among economics professors, who held that markets are rational, that prices reflect every nuance of hard data and relevant information. He believed that investors influenced one another and moved in herds. Soros' trick was to try to understand that herd instinct. Most of the time he went along with the mob, but his real killings came from sensing when the trend would turn and getting out in front of the pack.

And how could he tell the timing of the crucial turning points? Like other investors, Soros had colleagues gather information and perform analyses. But he also had an extraordinary gut. He said that he would have an instinctive physical reaction about when to buy or sell. Normally his composure was cool and emotionless, but when he suffered from a bad backache, he took it as an ominous warning about problems in the market. "I used the onset of acute pain as a signal that there was something wrong in my portfolio," he once explained. "I rely a great deal on animal instincts."

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