George Soros is one of the world's most shrewd investors.
His infamous Pound short broke the Bank of England, he was the mentor of Stanley Druckenmiller, and he is the founder of reflexivity theory.
These 12 quotes will make you a better investor.
THREAD
His infamous Pound short broke the Bank of England, he was the mentor of Stanley Druckenmiller, and he is the founder of reflexivity theory.
These 12 quotes will make you a better investor.
THREAD
1/ “It's not whether you're right or wrong, but how much money you make when you're right and how much you lose when you're wrong".
One of his most famous quotes, and goes nicely with his assertion that “I'm only rich because I know when I'm wrong". Protecting capital is key.
One of his most famous quotes, and goes nicely with his assertion that “I'm only rich because I know when I'm wrong". Protecting capital is key.
2/ "If I had to sum up my practical skills, I would use one word: survival. And operating a hedge fund utilized my training in survival to the fullest".
Reaffirming that staying alive is the most important factor over a long career of investing.
Reaffirming that staying alive is the most important factor over a long career of investing.
3/ “Misconceptions play a prominent role in my view of the world".
They also play a role in his investment process. Here's George Soros explaining the anatomy of a bubble in 2009.
They also play a role in his investment process. Here's George Soros explaining the anatomy of a bubble in 2009.
4/ "Markets are constantly in a state of uncertainty and flux, and money is made by discounting the obvious and betting on the unexpected".
Following on from #3, misconceptions about what is obvious and unexpected are areas often overlooked, and where money is to be made.
Following on from #3, misconceptions about what is obvious and unexpected are areas often overlooked, and where money is to be made.
5/ "If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring".
Don't get distracted by shiny objects, stick to what you know to be true, and invest in those areas.
Don't get distracted by shiny objects, stick to what you know to be true, and invest in those areas.
6/ "The trouble with institutional investors is that their performance is usually measured relative to their peer group and not by an absolute yardstick. This makes them trend followers by definition".
As a retail investor, you don't need to succumb to those same pressures.
As a retail investor, you don't need to succumb to those same pressures.
7/ "Once we realize that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes".
Prioritise intellectual honesty and making money over ego and being right.
Prioritise intellectual honesty and making money over ego and being right.
8/ "The worse a situation becomes, the less it takes to turn it around, and the bigger the upside."
- A contrary perspective to the peaks of pessimism. These moments are when the upside is most attractive.
- A contrary perspective to the peaks of pessimism. These moments are when the upside is most attractive.
9/ "We try to catch new trends early and in later stages we try to catch trend reversals".
Instead of jumping into trends, wait until they form and then catch up with them, and join the upside.
Instead of jumping into trends, wait until they form and then catch up with them, and join the upside.
10/ "When I see a bubble forming I rush in to buy".
The former quote explains this one. However, this relies on the investor knowing when to exit the bubble.
The former quote explains this one. However, this relies on the investor knowing when to exit the bubble.
11/ "The fact that a thesis is flawed does not mean that we should not invest in it as long as other people believe in it and there is a large group of people left to be convinced".
This one harks back to his comments about misconceptions.
This one harks back to his comments about misconceptions.
12/ "There is a powerful case for the market mechanism, but it is not that markets are perfect; it is that in a world dominated by imperfect understanding".
Not a fan of efficient market theory, Soros believes they are implicitly imperfect by nature.
Not a fan of efficient market theory, Soros believes they are implicitly imperfect by nature.
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