This book is comprised of a series of edited interviews with George Soros, and is broken up into 3 parts. The first part is about his investing. He talks about his family history, investment philosophies and theories, his early times as an analyst on Wall Street, and the Quantum Fund. He talk about how his theories were related to some of his real trades, specifically the Japanese stock market, the Mexican market, and the British Pound.
The second section deals with his views on (and participation in) politics. He talks about philanthropy, the geopolitics of Europe, diplomacy, and open societies. The third section of the book deals with philosophy and talks about some of his personal writings.
This book was fun for me to read since it was about hedge funds back when hedge funds were pure – before they were contaminated by Wall Street. Since this book is about Soros the person, and not Soros the investor, a significant portion of the book is devoted to politics and philosophy, and not investing. Although these topics are not out of place, most people will be less interested in this stuff since they are more interested in his investments.
Since Soros talks about his theories (specifically his theory of reflexivity), this book could be considered a more philosophical version of Alchemy of Finance. Hence, this book will appeal to traders/investors looking to ponder their personal investing philosophies. Although Soros tries too hard at times to make every statement sound profound, the timeless philosophical topics he brings up lends the book substantial (as well as lasting) value. This is due to the fact that a majority of traders will always lose money. When novice traders are unable to achieve success, it is best for them to step back and ask fundamental questions, like “why do I trade?”. But most don’t do this, and this book can help with that.
Consequently, the most important lesson that can be extracted from Soros’s market philosophies is that it is important to HAVE market philosophies. When I wrote my “How to Become a Trader” checklist, I said that one of the first things you should do is to write down your philosophies about the markets. This catches some prospective traders off guard since it is something that they’ve never thought about.
The Best Investment Advice George Soros Ever Gave. Here it is:
“Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend and step off before it is discredited.” ~ George Soros
Think about that statement for a minute. For everyone who is in the so-called bear camp, and thinks the current “recovery” belongs in quotation marks, this is an exceptionally meaningful quote.
Of course, everyone who has been bearish on the markets since 2009 has largely lost money, and been quite aggravated in the process. Had trillions in stimulus and quantitative easing not been injected into the economy (the big banks for the latter), our economy would have simply restructured and our markets would have bottomed at values far lower than they did. Bearish market participants have been investing with the philosophy that this will still happen.
Many bearish market participants have recognized the dynamic that there are long-term structural deficit and various economic issues, and that the economy is simply being goosed by trillions in cash and dangerously low interest rates. In other words, the bears scream that “the economy is unsustainable;” If and when rates rise, servicing trillions in debt is going to require even more debt issuance, leading to ever higher rates and a crowding out of the private sector. At this point, people draw different conclusions as to what happens next.
Others note that the euro is going to break apart, and it too is only being held together by programs like LTRO and other central bank intervention.
Regardless, many have come to the conclusion that our equity markets are fundamentally overvalued and do not discount the structural issues we face. The best argument I’ve heard for overvaluation is that corporate profit margins will contract rapidly when the U.S. government needs to start cutting its budget; we may be approaching that day with the creeping “fiscal cliff” at the end of the year. (more…)
The most important single factor in shaping security markets is public psychology. – Gerald Loeb
Wall Street never changes. The pockets change, the suckers change, the stocks change, but Wall Street never changes because human nature never changes. – Jesse Livermore
There is nothing more important than your emotional balance. – Jesse Livermore
There are styles in securities as there are in clothes. A security may be undervalued, but if it is also out of style it is of little interest to the speculator. He is, therefore, compelled to study the psychology of the stock market as well as the elements of real value. – Phil Carret
When events have thinking participants, the subject matter is no longer confined to facts but also includes the participants’ perceptions. The chain of causation does not lead directly from fact to fact but from fact to perception and from perception to fact. – George Soros
I always mark possible quotations when reading a book. This book is so full of them! Here are some random excerpts:
They are endless! If you are just to by one trading book, this is it. Enjoy!
There are some meaningful and aspiring quotes that i have read from books or i heard from my coaches. Today i’m going to share with you guys. Hope that it will inspire you and you might use the quotes as a daily reminder or as a form of motivation.
“Trading is hardwork, laborious and boring, just like any other jobs. If you are excited about it, you are gambling” by Conrad
“There is no calamity greater than lavish desires. There is no guilt than discontentment. And there is no greater disaster than greed.” by Lao Tze
“Its not about being right or wrong, rather, its about how much money you make when you’re right and how much you don’t lose when you’re wrong” by George Soros
“Luck is what you have left over after you give 100 percent” by Langston Coleman
“In the business world, the rear view mirror is always clearer than the windshield.” by Warren Buffet
“Experience is a hard teacher because she gives the test first, the lesson afterwards.” by Vernon Sanders Law
“Human beings, by changing the inner attitudes of their minds, can change the outer aspects of their lives.” by William James
“The only that overcomes hard luck is hard work.” by Harry Golden
“A goal without a plan is just a wish.” Antonie de Saint-Exupery
“If i can do it, so can you” by Adam Khoo
1. All successful traders use methods that suit their
personality; You are neither Waren Buffett nor George Soros nor Jesse Livermore; Don’t assume you can trade like them.
2. What the market does is beyond your control; Your reaction to the market, however, is not beyond your control. Indeed, its the ONLY thing you can control.
3. To be a winner, you have to be willing to
take a loss;
4. HOPE is not a word in the winning Trader’s vocabulary;
5. When you are on a
losing streak — and you will eventually find yourself on one — reduce your position size;
6. Don’t underestimate the time it
takes to succeed as a trader — it takes 10 years to become very good at anything;
7. Trading is a vocation — not a
hobby
8. Have a business/trading plan;
9. Identify your greatest weakness, Be honest — and DEAL with it (more…)
Hell tortures you to stop learning.
What do the worlds best Trading masters differently than the average investor? Can the average investor learn from the Player Legends success stories and their techniques used? What do the most famous Players have in common that can be applied by the average talented trader?
Before we should give some insights on those questions lets have a look at some of the most successful Trade jockey Legends:
Nicolas Darvas turned an $ 36000 account into $ 2000000 in 18 months!!!
Ed Seykota, a Turtle Financier, turned $ 5’000 into $ 15’000’000 in 12 years!!!
Jesse Livermore made several multi-million USD fortunes in the early 1900’s
Richard Dennis, another Turtle Player, made between $ 100 and $ 200 000.000
George Soros is believed to be one of the greatest Trade jockey of all time!!!
The results are quite impressive and some different amazing Financiers should be added easily to the list above. Why do these guys have such tremendous results?
There are common factors, that can be observed through most of the successful Pitbull Legends:
They have a Strategy that they strictly follow.
Most of them have a trend-following average trading style.
Most of them have a mid- to long-term approach. Some of them burned their fingers over the preceding 3 years and some even lost a fortune. Here are some examples of observed behaviour patterns:
Losses are not slice early enough.
Investment with a short-term horizon become long-term horizon in hope of raising asking prices.
People listen to the advise of their invested $ Trade facilitators and Analysts.
People risk coin in hot issues recommended by colleagues of their colleagues.
People have no plan for their investments.
Money Management is not considered at all.
Greed and fear is omnipresent.
What can average talented trading insiders learn from the above and how can the mistakes listed above be avoided? The after key notches can be learned from some of the most successful Trading expert Legends:
Each investor has its own personality. Some of the investor have a very aggressive paper trading style and are stockmarket trading very frequently. Some prefer shares as different are increased risk oriented and speculate in contracts. Other players want only spend a minimum of effort. An investor need to reflect on his outline and choose a note trading approach that fits his personality.
A trade needs to be completely planned in advance. g. when they go on holiday, when they move house etc. But do they have a plan when they invest? An investor needs to have a method that helps him to be prepared for all scenarios of a exchange. One needs to know in advance when to buy, how much to buy, when to exit. Once a buy / sell is executed the bottom line of the instrument (stock, promise note, fixed interest paper etc.
The most important component of a stock trading method is Cash Management? Surprised? Lots of pitbulls and super traders spend most of their time developing a very advanced trade entry strategy. But the entry methodology contributes only approximately 15% to the success of a Note trading Method based on academic studies.
The most important question of a Paper trading Technique is how much to risk bucks and how many deals to trade at the same time.
A can do attitude is required to buy / sell successfully. Why? Because with phrases like it should be great, but I cant or one day perhaps I should succeed in the lottery, but until then I must work hard they have already lost.
