Soros Fund lost $800M in the 1987 crash — the world's best investor got it wrong

Soros Fund Management's flagship Quantum Fund was one of the most successful hedge funds in history, managed by George Soros. In 1987, Soros made a famous bet against the US stock market that was prescient in timing — but disastrous in execution.

Soros correctly predicted the market was overvalued and sold his US stock portfolio before the October 1987 crash. When Black Monday hit on October 19, 1987, the Dow fell 22.6% in a single day. Soros was right about the direction — but then he made a fatal mistake.

Believing the crash was overdone, Soros bought back into the market, betting on a rebound. Instead, the market continued to fall. The Quantum Fund's S&P 500 futures positions, which had been profitable before the crash, turned into a $800 million loss.

The loss was devastating for a fund that had returned over 30% annually for years. Soros himself described the 1987 crash as his most painful investing experience, saying that being right about the direction of the market was worthless if you got the timing of your entry wrong.