George Soros Quotes
128 George Soros Quotes
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Good investing is boring.
George Soros
I put forward the theory of reflexivity as if it were relevant at all times. That is true in the sense that the two-way feedback mechanism that is the hallmark of reflexivity can come into play at any one time, but it is not true in the sense that it is at play at all times. In fact, in most situations it is so feeble that it can be safely ignored.
George Soros
The message of my book is usually summed up by saying that the participants’ value judgements are always biased and the prevailing bias affects market prices.
George Soros
If I had to sum up my practical skills, I would use one word: survival.
George Soros
A hedge fund is a mutual fund that employs leverage and uses various techniques of hedging.
George Soros
I believe that market prices are always wrong in the sense that they present a biased view of the future. But distortion works in both directions: not only do market participants operate with a bias, but their bias can also influence the course of events.
George Soros
Unfortunately, the more complex the system, the greater the room for error.
George Soros
Loans are based on the lender’s estimation of the borrower’s ability to service his debt. The valuation of the collateral is supposed to be independent of the act of lending, but in actual fact the act of lending can affect the value of the collateral. This is true of the individual case and of the economy as a whole. Credit expansion stimulates the economy and enhances collateral values. The repayment or contraction of credit has a depressing influence both on the economy and on the valuation of the collateral. The connection between credit and economic activity, is anything but constant – for instance, credit for building a new factory has quite a different effect from credit for a leveraged buyout. This makes it difficult to quantify the connection between credit and economic activity. Yet it is a mistake to ignore it.
George Soros
The shape of the supply and demand curves cannot be taken as independently given, because both of them incorporate the participants’ expectations about events that are shaped by their own expectations.
George Soros
Perfect knowledge is not attainable.
George Soros
For instance, the stock market is generally believed to anticipate recessions, it would be more correct to say that it can help to precipitate them. Thus I replace the assertion that markets are always right with two others: I) Markets are always biased in one direction or another; II) Markets can influence the events that they anticipate.
George Soros
The change in stock prices may, in turn, affect both the participants’ bias and the underlying trend.
George Soros
As long as the bias is self-reinforcing, expectations rise even faster than stock prices.
George Soros
Fundamental analysis seeks to establish how underlying values are reflected in stock prices, whereas the theory of reflexivity shows how stock prices can influence underlying values. One provides a static picture, the other a dynamic one.
George Soros
Investors operate with limited funds and limited intelligence: they do not need to know everything. As long as they understand something better than others, they have an edge.
George Soros
Exchange rates have found a way of influencing the fundamentals. For instance, a strong exchange rate discourages inflation: wages remain stable and the price of imports, falls.
George Soros
Speculative capital is attracted by rising exchange rates and rising interest rates.
George Soros
Once a trend is established it tends to persist and to run it’s full course.
George Soros
When a long-term trend loses it’s momentum, short-term volatility tends to rise. It is easy to see why that should be so: the trend-following crowd is disoriented.
George Soros
The act of lending usually stimulates economic activity.
George Soros
Quantum Fund is a unique instrument: it uses leverage; it operates in many markets; and most important, I manage it as if it were my own money – which it is to a large extent. We generally invest our equity in stocks and use our leverage to speculate in commodities/(futures, bonds, currencies).
George Soros
There is something unsound about increasing one’s exposure in the course of a trend because it makes one vulnerable to a temporary reversal.
George Soros
I did not want to miss a strategic opportunity on account of a tactical error.
George Soros
In fact, the realtime experiment was instrumental in helping me to hand in there because seeing my ideas clearly formulated strengthened my convictions.
George Soros
The mere fact that there is an attempt to take charge of the world economy is sufficient to give the financial markets a boost and, even if the hopes are going to be disappointed, it will take time for the failure to become evident; thus the attempt at a concerted policy should be sufficient to sustain the present rally for a while.
George Soros
I have become so involved in the market that I find it difficult to maintain perspective.
George Soros
The year’s end is seasonally a strong period: we could have some fireworks in the next 4-5 weeks.
George Soros
The trouble is that not having sold I cannot buy now. All I can do is sit out this round and hope that the situation does not get out of hand.
George Soros
I shall advance in order to regroup.
George Soros
My caution may cost me dearly, but it will also ensure my survival.
George Soros
But missing an opportunity is also painful. Fortunately I did not miss the market: I merely failed to take maximum advantage of it.
George Soros
To buy bonds on a 7.5% yield basis when I sold them with a 9-9.25% yield is not an easy decision to make; but the logic of the situation forces me into it.
George Soros
I do not have a strong enough case to fight the trend.
George Soros
All told, my trading activity cost me some money but it has put me in a position in which I feel comfortable. My aim is to limit losses rather than to make a lot of money.
George Soros
The fact is that it is very difficult to maintain a ‘neutral’ position in a fluctuating currency market. Market participants have an existential choice to make and if they have no clear views they are bound to make the wrong choice.
George Soros
Thus I find myself in the awkward position of having to operate with two contradictory theses, at least in the short run. I have found myself in similar situations before and I have developed certain techniques for dealing with them. Indeed, it is more usual for me to operate with two at least partially contradictory theses than to stake everything on thesis as I did at the end of Phase I.
George Soros
As a general principle, I do not dismantle, positions that are built on a thesis that remains valid; rather, I take additional positions in the opposite direction on the new thesis. The result is a delicate balance that needs to be adjusted from moment to moment. If the balancing act fails to protect they portfolio, I have to cut back all ground in order to assure survival. If the balancing act is successful, I gain liquidity without having to sacrifice desirable positions. To illustrate: if I start with a fully invested position and then short an equal amount, a 20% decline, even if it affects the long and the shorts equally, leaves me only 80% invested on the long side. If I cover my longs at the right time, I come out way ahead, but even if I cover my shorts with a loss I am better off than if I had sold my longs at the wrong time.
George Soros
I find it somewhat embarrassing to get caught in the ‘bust of our lifetime’ while writing about the ‘boom of our lifetime’. Yet that is what has happened.
George Soros
I must take care not to compound my error by reacting emotionally. I must adapt to changing circumstances.
George Soros
Incidentally, I am beginning to worry that the process of recording my thoughts for public consumption may interfere with my ability to acknowledge and correct mistakes promptly because doing so makes the record even messier.
George Soros
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