1. To make money, you must rely on the normal value of the goods to appear discounts and pay attention to accident events.
2. Like other great investors, Soros is very concerned about “expected internal value.” The expected internal value is equivalent to the average weight value of the potential investment results. An investment philosophy that is different from most people is only sensible when the value is expected to be positive. On the one hand, Soros can make a bigger bet than other investors; on the other hand, there is no fundamental difference between Soros and other investors in the processing of the investment process.
3. Financial markets are often unpredictable, so an investor needs to have a variety of different scenarios. The market is “time” predictable, but this does not mean that the market is “always” unpredictable. If an investor is patient and can wait for a chance to successfully bet on pricing bias, then he can beat the market.
4. The hardest thing to judge is: what level of risk is safe. Risk is the possibility of your loss. There are three situations that must be faced: sometimes you know the natural characteristics and possibilities of a risk event (such as throwing a coin); sometimes you only know the nature of the event, but don’t know its possibilities (such as a specified stock price within 20 years); sometimes you may not even know the characteristics of the event that may harm you in the future (such as the vicious “black swan” event).
5. You have a lot of feedback loops, some of which are positive and some of which are negative. These feedbacks interact with each other to produce an unconventional price pattern that prevails for most of the time. But in a few cases, the development of some bubbles has released all of its potential, so as to mask the effects of other influencing factors.
6. The best way to be “safe” is to have a “safety margin.”
7. Your right or wrong is not the most important. The most important thing is how much you can make when you are right, and how much you will lose when you are wrong.
8. The most important thing for an investor is the “magnitude of correctness”, not how high the “correct frequency” is. If the odds of winning in a bet are large enough, then you make a big bet. When Soros felt that he was right, almost no investor was able to make a bigger bet than him.
9. I only go to work when there is a reason to go to work, and I am really doing things on the day I go to work. Keeping a busy trading state creates a lot of costs and errors. Sometimes not being so active is often the best thing an investor can do.
10. If the investment is a kind of entertainment, if you have fun, you may not have made any money. Really good investments are boring. If you are very excited about your investment, then you may be in the gambling, not the investment. The best way to stop yourself as a gambler and not to be a gambler is to bet only when the odds are good for you.
11. If the future price is to be reflected, the current market price is always wrong. The market can influence the events it expects. The market and people’s perception of the market are interactive. There is a two-way reflexive relationship between cognition and reality. This is a process that initially promotes self-reinforcement, but ultimately leads to self-destruction, or it can be said that this is a bubble. Each bubble is formed by a tendency to interact with a wrong concept in a reflexive way.
12. In real life, there is very little real equilibrium — market prices are always accustomed to volatility. Equilibrium is the basis for many macro economists to make assumptions, but Soros thinks that equilibrium is actually a fantasy. Equilibrium makes mathematical calculations perfect, but often does not match the facts. Soros once said: “Economic thinking needs to start thinking about real-world policy issues, rather than simply creating more mathematical equations.” The formation of Soros’s investment perspective is not based on reason, for example: “When long-term trends kinetic energy is lost, short-term volatility tends to rise. The reason is simple — the investors who follow the trend can’t find a direction at this time.” Soros also believes: “The process of prosperity — collapse is asymmetrical in form. After a long-term, gradual boom is often a short, short-lived collapse.”
13. Economic history is never ending a lie after a lie, never be the truth. Being able to explain what happened in the past in words does not mean that the explanation is correct or that the basis of a theory can be used to predict the future. Human beings have a shortcoming of “afterthought smart.”
14. I am rich just because I know when I am wrong. I basically ‘survived’ because I realized my mistakes. We should realize that human beings are like this: wrong, not shameful, shameful is that if you can’t correct your mistakes.