The attitude of society towards the 90-year-old financier is ambiguous. On the one side, George Soros actively involved in charity work, on the other hand, his opinion often runs counter to the generally accepted, and stock transactions are too risky. He is credited with participating in a "global world conspiracy" and obtaining insider information for the sake of profit., and in 2018 G. there was an assassination attempt.
Still, there is a lot to learn from the older investor. His condition is estimated at 8,6 billion dollars, and most of the money he earned on the stock exchange. Soros outlined his views on investing and economic problems in the works "Alchemy of Finance", "The bubble of American supremacy. Where should American power be directed?, "About globalization", "The New Paradigm of Financial Markets" and other books.
George Soros George Soros
1. There is no single strategy for playing on the stock exchange - you need to adapt to the situation.
"My personality is, that I don't have any particular investment style. Every time something new - new approaches, new methods, new ways to achieve the goals ".
If other investors adhere to a certain system, then George Soros prefers to study the issue in detail and only then make a decision. He tests the hypothesis, using the market as a laboratory. If the result is successful, - invest heavily.
The financier considers it an advantage, that most players do not view the markets in this way—they do not, that you can experiment on the stock exchange. Soros often engages in speculation, playing down, what is being criticized.
2. Stock market prices do not reflect reality.
«… Market prices are always wrong in the sense, that they reflect a vision of the future, preference-based".
George Soros believes, that investors make deals based on their own ideas about the future of the company or industry. It has both a straight line, and feedback - traders influence the course of events, shaping them with your actions.
Human perception, by definition, cannot be objective., as a result, current market prices do not correspond to the surrounding reality. In his book "Alchemy of Finance" the investor writes: “Participants do not rely on objective conditions when making decisions, but on your interpretation of these conditions".
3. Even the most successful stock market players can make mistakes..
«… I have too little faith in the foresight of professional investors; the larger the post, which they occupy, the less I consider them capable of making the right decisions.”.
The financier does not recognize authorities, because he himself is an example for many traders. He says, who always watches with malice, like securities, considered favorites, do not meet the expectations of millions. Moreover, he plays for a decrease in value and earns a lot of money.: his rates change the course of quotes.
Billionaire, making investment decisions, does not rely on the point of view of one or two assistants. He gathers a whole team of analysts and always listens to the opinion, going against his own. After that, Soros reflects on the information he has collected., considering the future investment from different angles.
4. You need to be able to catch the main stock trend.
“The divergence between the main trend and its recognition by investors always remains, and a savvy investor can take advantage of this. New industries emerge or old ones begin to be in demand again. Usually, it doesn't get the credit it deserves at first".
The legendary financier is renowned for his professional flair. He knows how to find promising directions, capable of generating a large income - only appeared on the market or managed to rehabilitate.
It is necessary to notice trends even before, how other players will pay attention to them. This is the moment to invest. Today Soros focuses on global macroeconomic trends.
5. Making risky trades, need to follow the instinct of self-preservation.
“There are no universal standards here: each situation should be assessed separately. In the final assessments, you should rely on your instinct for self-preservation ".
Investing is always a risk, more or less depending on conditions. Gotta listen to that, what your inner voice tells you. Try to trust your ability to survive and determine, "What level of risk is safe". If quotes go in the right direction, the investor will be able to earn, if not, he will be "thrown out of the game".
6. Bitcoin is not a currency, and its prospects are vague.
Bitcoin is speculation, whose price can change dramatically, therefore, it cannot be considered a currency. The price of cryptocurrency depends entirely on the mood of the players: during the day, it can both decrease, so grow on 25% or more. With such volatility, it is impossible to think about switching to e-currency settlements.
George Soros calls Bitcoin a typical stock market bubble: it is "based on some kind of misunderstanding". Currency must be a stable store of savings, and cryptocurrency unreliable. There are two options for the development of events: there will be a sharp decline in the price of it or a long plateau will follow. The opinions of exchange professionals on this matter were divided.: some take Soros's point of view, others see bitcoin growth prospects.
7. Markets are unpredictable, therefore it is impossible to make predictions.
In an interview, Soros was asked, what forecasts can he give for the next six or nine months. He replied, that there is a "huge imbalance" in the world, what makes the markets unstable.
It's impossible to make predictions: quotes can fall or rise. Even if there are objective reasons for their change, don't forget, that stock market players also influence prices. Investor perceptions can lead the market in any direction.
8. Markets are cyclical: A downturn is always followed by an upswing.
There are certain laws on the stock exchange: after a fall, she recovers, and after the jump decreases. The history of the American stock market is a vivid confirmation of this..
An investor should not lose his head and rush to buy shares, when those go up, or get rid of securities, when they rushed down sharply. This is an unreasonable impulsive decision., leading to loss.
9. Making a deal, only the size of the profit needs to be considered.
“Absolutely unimportant, are you right or wrong. Only that matters, how much money do you earn, when right, and how much money do you lose, when you are wrong ".
George Soros believes, that you need to discard emotions and treat losses with restraint. In its history there were not only successful speculations, but also big failures. The financier often works with short positions - the risk for such transactions is very high.
If there is a failure, mistakes must be admitted, calculate loss and draw conclusions. Soros says, what exactly this quality distinguishes him from other investors. Don't take too much risk.
10. The game on the stock exchange needs a serious approach.
“If investing seems interesting to you, and you enjoy it - most likely, you don't earn anything. True investing is a bore to death.”.
George Soros doesn't bet on luck: he always carefully studies the features of the upcoming transaction, listens to different opinions and tests ideas. It takes a lot of patience., pedantry and care.
When a person wants to make money, he doesn't care if it's fun or not. It fixes attention on the upcoming profit, not for enjoyment. If he needs to do something to get money, he just does it. And for entertainment there is leisure - "time, which belongs only to you ".
11. To understand, how markets work, you need to study people's behavior, not quotes.
George Soros developed the theory of reflective analysis, according to which the stock market is controlled by the mood of the crowd. Human behavior is difficult to call reasonable, therefore, most often, ideas about the future of the market are erroneous. It is extremely difficult to comprehend objective reality - it is constantly changing in an unpredictable direction..
Soros thinks, that stock market players need to act in accordance with their own ideas. Break free from conventional wisdom, be attentive and persistent. This is the only way to create new rules of the game..
12. If you are confident in your decision, act and don't look back.
Soros claims, that indecision is a bigger mistake, than an unreasonable risk. If you are confident in your actions, can't hesitate.
“Let the rags look back!» - the billionaire knows how to make risky investments for large sums. And he doesn't always win., but he knows how to admit mistakes and learn from his own experience. "Nothing is more conducive to concentration, as a danger, to think clearly, I need inspiration, associated with risk.
13. Can't follow the crowd, you need to create your own rules of the game.
Should act contrary to established norms and principles, be flexible. rules, operating on the stock exchange, should not manage the investor. Need to play on your own, but at the same time to study the behavior of the crowd, to make the opposite decision.
This is exactly the manner in which the legendary financier adheres to stock trading.. He is engaged in short-term speculative investments and does not hold long-term assets.. Soros is constantly changing strategy. For example, about ten years ago he invested in currency, today - in the securities of industrial companies.
14. Making transactions on the stock exchange, should listen to your intuition.
George Soros is famous for his extraordinary flair and sometimes follows this rule literally. His investment decisions are influenced not only by a reasonable approach and careful analysis, but also health. According to the son of a financier, that "buys, when his back hurts, but sells, when the pain goes away ".
15. Need to look to the future, not to the past.
Investors often make important decisions, based on the analysis of the past merits of the company. However, the most important thing is to understand, How will stocks perform in the future?, after all, the success of the transaction depends on their possible growth or fall. Where trader can get such data?
Main reason, according to which many stock players do not like George Soros - rumors about, what does he earn, thanks to inside information. When information from a reliable source falls into his hands, he is betting on a decrease in quotes. Whether this is true or not, unknown. The financier denies such allegations. At the beginning of his career in the foreign exchange market, he definitely could not operate with classified data.. It means, that success came to Soros thanks to financial instinct and a lot of work done.
To put the recommendations of the legendary investor into practice, open a brokerage or demo account. Try your hand at investing and improve your skills.
We also recommend reading about, what are the dangers of market forecasts.
