George Soros

[AdamA]

I read this quote today from George Soros' son:

"My father will sit down and give you theories to explain why he does this or that. But I remember seeing it as a kid and thinking…at least half of this is bull—-. I mean, you know the reason he changes his position in the market or whatever is because his back starts killing him. It has nothing to do with reason. He literally goes into a spasm, and it’s this early warning sign."

Strikes me as not just "at least half bull," but as 100% bull. 

Why had Soros been so successful?  Is he really a genius or just a glorified inside trader?

Adam

[MediumTex]

Pure chance would suggest that there will always be a George Soros-type figure in every gambling parlor.  It's sort of like enough monkeys on typewriters will eventually give you Shakespeare, but imagine what a smug and arrogant monkey the Shakespeate typist would likely turn into.

Pervasive use of inside information also accounts for some of Soros's success, I am sure.

Soros may have had some small edge here and there due to a great intellect and nuanced understanding of markets, but I am certain that it would be impossible to study Soros's methods and translate them into Soros-sized gains.

[Wonk]

After studying some of the best traders on the planet, psychologist Van Tharp made a very good point that connects them all.  Winning percentage means nothing.  Most of the successful traders--long term--have less than 50% win rate, but their winners are enormous and they cut losers short (as should be expected).  They are shrewd, calculating and emotionless.

George Soros wasn't one that he profiled, but he fits the prototype.  The infamous "breaking the bank of England" netted him a cool billion.  That buys him a lot of small losers.  For that big win, he knew something most others did not--or were not capable/willing to act on if they did.

There has been a lot of debate over EMH.  I'm not a believer.  My view is that long-term successful traders/investors aren't drawn out of a hat.  They have all of the characteristics that are necessary to be successful that the masses do not. 

[AdamA]

 My view is that long-term successful traders/investors aren't drawn out of a hat.  They have all of the characteristics that are necessary to be successful that the masses do not.  

Wonk,

Have you read "The Way of the Turtle" by Curtis Faith?  

Basically makes your case.  

In a sense, PP could be considered a very conservative reversion-to-mean trading "system."  

[craigr]

There is just an intuition that some people have for things they are good at doing. Whether it's investing, law, computers, music, writing, etc. It is either a talent you have or one you don't. I don't think it can be learned.

As for Soros, Buffet, etc. I would suggest never listening to any outward advice they are giving on current investment markets. They could have ulterior motives or could wake up the next day and feel exactly the opposite for innocent reasons unknown to you. I don't think their success is easily copied and certainly there is a bit of luck involved as well.

[AdamA]

As for Soros, Buffet, etc. I would suggest never listening to any outward advice they are giving on current investment markets.

I agree 100% for a long list of reasons (I'll spare you the list).  

The thing is, I understand Buffet's talent as a value investor, even though I could never imitate it, and it makes sense to me that someone with Buffet's skills could make money in the Market.  

Soros is a little different because he makes money off of predictions he makes about the macro-economy AND he times them...quite the opposite of Buffet.  So...it's always been a bit of a mystery to me.

[craigr]

I agree 100% for a long list of reasons (I'll spare you the list).  

Here is my list why I ignore them:

1) They are both globalist elites that support collectivist ideologies.

That's kind of the end of the list for me. Everything they do is to achieve that goal. So I ignore them because by listening to their advice I am helping them achieve those ends.

The thing is, I understand Buffet's talent as a value investor, even though I could never imitate it, and it makes sense to me that someone with Buffet's skills could make money in the Market.  

Buffet really buys and runs companies. He is not just buying stocks alone. He also gets a lot of deals brought to him that the average investor never sees. So he has advantages that others simply don't have.

Soros is a little different because he makes money off of predictions he makes about the macro-economy AND he times them...quite the opposite of Buffet.  So...it's always been a bit of a mystery to me.

Soros on the other hand I simply think is lucky by and large. He's also a hypocrite that does things to undermine free market economies while profiting immensely from participating in the markets. That alone would be reason enough for me to ignore him.

Not that I have strong opinions on the subject....

[AdamA]

1) They are both globalist elites that support collectivist ideologies.

Beyond that, it's impossible to follow their advice b/c they don't give any.  Vague statements to the financial media don't count. 

[craigr]

1) They are both globalist elites that support collectivist ideologies.

Beyond that, it's impossible to follow their advice b/c they don't give any.  Vague statements to the financial media don't count. 

I think George Soros's advice is often duplicitous. I wouldn't follow anything he says because there is probably a better than even chance he's making money on the other side of the bet.

But like most of this advice, by the time CNBC or whoever pick it up the advice is too stale to be useful. Knowing something everyone else knows is just not actionable information.

[Wonk]

 My view is that long-term successful traders/investors aren't drawn out of a hat.  They have all of the characteristics that are necessary to be successful that the masses do not.  

Wonk,

Have you read "The Way of the Turtle" by Curtis Faith?  

Basically makes your case.  

In a sense, PP could be considered a very conservative reversion-to-mean trading "system."  

Adam, I haven't read that book.  In a sense I think you are right about the PP being a conservative trading system.  Rebalancing bands force you to buy low and sell high even when emotions tell you it's the wrong move.  For 99% of the market that has neither the aptitude nor the desire to attempt to beat the market in the long term, the PP is one of the best (if not the best) "trading" systems invented. 

As for Soros and other investors going public, as always talk is cheap.  As he was chatting up "the ultimate bubble" in gold, he was stockpiling gold bars and gold mining stocks.  Funny thing is he worded it brilliantly.  He only said gold is "the ultimate asset bubble," not "the ultimate asset bubble right now."