Some of George Soros’ quotes are iconic, and they hold a lot of knowledge and understanding behind it. George Soros is one of the most influential and legendary traders of our time. A controversial figure for some, but its quality as a trader is undeniable. Often referred to as “the man who broke the Bank of England”. Alluding to his trade in the 1990s that is still remembered to this day. George Soros serves as an inspiration for retail investors and traders all around the world. Despite the controversies, and the conspiracy theories centered around him.
George Soros quotes on mistakes
As one of the biggest advocates of cutting your losses, some of George Soros’ quotes are a reflection of that. These quotes also reveal how important it is to be introspective whether you are trading or investing. It is essential for traders and investors to constantly question their decisions. This is the fastest way to identify mistakes and then act swiftly to correct them. Admitting when you are wrong is a skill that must be developed by both investors and traders.
“I'm only rich because I know when I'm wrong.”
“Although we cannot rid ourselves of misconceptions, we can correct them when we become aware of them.”
“It's not whether you're right or wrong, but how much money you make when you're right and how much you lose when you're wrong.”
“Tell us about the crisis of 1981. It started much earlier, around the time I spelled out my three-stage strategy. Here I was, extremely successful, but I made a point of denying my success. I worked like a dog. I felt that it would endanger my success if I abandoned my sense of insecurity. And what was my reward? More money, more responsibility, more work-and more pain-because I relied on pain as a decision-making tool.”
"Once we realize that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes."
George Soros on reflexivity
George Soros was also the mind behind the theory of reflexivity. The theory is still to this day one of the soundest bases to understand how market participants interact in the market, and how their decisions are made.
George Soros' preposition was that investors base their decisions not on reality, but on their perceived reality. This vision is distorted by their beliefs, culture, and experiences. Their views and perception are therefore flawed and fail to incorporate basic economic and financial assumptions. Soros’ theory of reflexivity still holds true today, and it is perhaps the best explanation for how our financial markets work.
“Misconceptions play a prominent role in my view of the world.”
“I can state the core idea in two relatively simple propositions. One is that in situations that have thinking participants, the participants’ view of the world is always partial and distorted. That is the principle of fallibility. The other is that these distorted views can influence the situation to which they relate because false views lead to inappropriate actions. That is the principle of reflexivity.”
“We are accustomed to think of events as a sequence of facts: one set of facts follows another in a never-ending chain. When a situation has thinking participants, the chain does not lead directly from fact to fact. It links a fact to the participants' thinking and then connects the participants' thinking to the next set of facts.”
George Soros explaining the theory of reflexivity
“Let's deal first with your general theory of reflexivity.
Essentially, it has to do with the role of the thinking participant, and the relationship between his thinking and the events in which he participates. I believe that a thinking participant is in a very difficult position, because he is trying to understand a situation in which he is one of the actors. Traditionally, we think of understanding as essentially a passive role, and participating is an active role. In truth, the two roles interfere with each other, which makes it impossible for the participant to base any decisions on pure or perfect knowledge.
Classical economic theory assumes that market participants act on the basis of perfect knowledge. That assumption is false. The participants' perceptions influence the market in which they participate, but the market action also influences the participants' perceptions. They cannot obtain perfect knowledge of the market because their thinking is always affecting the market and the market is affecting their thinking. This makes analysis of market behavior much harder than it would be if the assumption of perfect knowledge were valid.”
“In economics, contingent, time- and context-bound theories may yield more useful explanations and predictions than timeless and universal generalizations based on ungrounded assumptions.”
“Second, since our understanding of reality is imperfect, the criterion by which choices may be judged is not fully within our grasp. As a result, people will not necessarily make the correct choice and, even if they do, not everybody will accept it as such. Moreover, the correct choice represents merely the better of the available alternatives, not the best of all possible solutions. New ideas and interpretations may emerge at any time. These are also bound to be flawed and may have to be discarded when the flaws become apparent. There is no final answer, only the possibility of a gradual approximation to it. It follows that the choice between alternatives involves a continuous process of critical examination rather than the mechanical application of fixed rules.”
George Soros on geopolitics
George Soros has been very outspoken in politics over the years. This is actually part of why he has been a controversial figure for many reasons. One of the reasons also, why so many conspiracy theories revolve around him as the main figure.
“My main concern is with the world order”
“The world order needs a major overhaul.”
“At present, the developed countries condescend to the developing ones.”
“The main obstacle to further progress on the resource curse is China, and to a lesser extent India.”
“Politicians will respect, rather than manipulate, reality only if the public cares about the truth and punishes politicians when it catches them in deliberate deception.”
“We need to have some degree of social justice, equality of opportunity. The markets are not designed to take care of those needs. That's a political process. And the market fundamentalists have managed to reduce providing those public goods.”
George Soros quotes on his Jewish origins
George Soros' life and world views have been deeply influenced by his first experiences in the world. Born in Hungary, George Soros experienced firsthand the disdain and racism towards Jewish descendants. This is something that has played an important role in his life, and his own perception of reality.
“How do you see your own Jewish identity?
I am proud of being a Jew-although I must admit it took me practically a lifetime to get there. I have suffered from the low self-esteem that is the bane of the assimilationist Jew.
This is a heavy load that I could shed only when I recognized my success.
I identify being a Jew with being in a minority. I believe that there is such a thing as a Jewish genius; one need only look at the Jewish achievements in science, in economic life, or in the arts. These were the results of Jews' efforts to transcend their minority status and to achieve something universal. Jews have learned to consider every question from many different viewpoints, even the most contradictory ones. Being in the minority, they are practically forced into critical thinking. If there is anything of this Jewish genius in me, it is simply the ability to think critically. To that extent, Jewishness is an essential element of my personality and, as I said, I am very proud of that.”
George Soros on his upbringing
“You know, I learned at a very early age that what kind of social system or political system prevails is very important. Not just for your well-being, but for your very survival. Because, you know, I could have been killed by the Nazis. I could have wasted my life under the Communists. So, that's what led me to this idea of an open society. And that is the idea that is motivating me.”
George Soros on his political influence
“Everybody says that I have a lot of power. But what does that power consist of?... Can I influence governments? I am beginning to be able to..."
“The main difference between me and other people who have amassed this kind of money is that I am primarily interested in ideas, and I don't have much personal use for money. But I hate to think what would have happened if I hadn't made money: My ideas would not have gotten much play.”
George Soros quotes on philanthropy
Over the years many people have questioned the true intentions behind George Soros’ philanthropic initiatives. Linking most of his philanthropic endeavors to political influence.
“I'm not doing my philanthropic work, out of any kind of guilt, or any need to create good public relations. I'm doing it because I can afford to do it, and I believe in it.”
“As I like to put it, we have hit pay dirt. The effort to cure the resource curse is a good example of what private foundations working with NGOs can accomplish.”
Bottom line
Despite the controversy surrounding himself, George Soros stands as one of the most brilliant financiers of our time. A brilliant mind, with an incredibly inspiring life story that could easily be turned into a movie. His determination and personal beliefs have shaped financial markets. His influence will be felt forever.
Image source: The New Yorker
