George soros forex trading strategies

George soros forex trading strategiesGeorge soros forex trading strategies

George Soros Trading Techniques. Making money with a Forex trading strategy is also about not working to many hours. George Soros spent decades as one of the world's. Active Trading; Forex; Personal Finance;. He refers to the philosophy behind his trading strategy as. George Soros. George Soros, a. Start Trading Forex with up to $10,000. FX Strategy, FX Strategies, FX Trade, Forex Trading, FX Trading, Forex Trading Platform.

Updated on June 30, 2015. Uncover the trading strategies and analysis of the biggest and most notorious foreign exchange trades ever. Learn how George Soros shattered. Books about online forex trading, technical & fundamental analysis, forex trading systems & strategies, money & risk management George Soros spent decades as one of the world's. Active Trading; Forex; Personal Finance;. He refers to the philosophy behind his trading strategy as.

Updated on June 30, 2015. Uncover the trading strategies and analysis of the biggest and most notorious foreign exchange trades ever. Learn how George Soros shattered. Article Summary George Soros netted a profit of over 1 Billion Euro in 1992. Find out more about his strategy and what he is trading today. In September. Trading Strategies; Trading. Video; Articles. George Soros Posted By TradersLog. Recommend on Google. Tweet; George Soros is chairman of. Forex Trading.

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George soros

George sorosGeorge Soros

George Soros (born August 12, 1930 in Hungary ) is an elitist leftist American businessman and one of the richest people in the world, current networth estimated to be at about $8.4 billion. The birth-name of George Soros is Gyorgy Schwartz, his family name was changed in 1936 from Schwartz to Soros to avoid antisemitism. George Soros later said that he "grew up in a Jewish. anti-semitic home," and that his parents were "uncomfortable with their religious roots." [1] Soros is an atheist. [2]

In 1947, George Soros emigrated from Hungary to England, where an event occurred that greatly influenced the development of George's personality and worldview. He broke his leg and was cared for by England's National Health Service, free of charge, while the Jewish relief agencies of that era did not offer him the help he believed they owed him. In that event was born Soros' favorable opinion of Democratic Socialism, and his negative view of many Jewish groups.

Soros' immediate family joined him in the West in the mid-Fifties.

Early Years

In his autobiograpy, entitled Soros on Soros . he described how as a teenager he helped to cart off the stolen possessions of Hungarian Jewish men, women and children after they were rounded up and transported to death camps. He claims it never bothered him a bit, and still doesn't bother him today. He has no personal regrets about his actions. Soros, a reputed psychopath [3] [4] [5]. told Steve Kroft of CBSNews in response to questions about his behavior in an interview with of 60 Minutes .

KROFT: No feeling of guilt?

Thread trading strategies jump on the george soros coal train

Thread trading strategies jump on the george soros coal trainThread: Trading Strategies: Jump on the George Soros coal train

Trading Strategies: Jump on the George Soros coal train

Everybody hates coal, but not so long ago, both George Soros and Leon black bought in, suggesting it might be time for investors to do the same, albeit cautiously.%img src="feeds. feedburner/

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George soros-the zero-sum game

George soros-the zero-sum gameGeorge Soros & the Zero-Sum Game

TurtleTrader comment . George Soros, the legendary and enormously successful trader, recently appeared on ABC News Nightline program. The following excerpt of an exchange between George Soros and host Ted Koppel proves illuminating:

Ted Koppel: as you describe it, it [the market] is, of course, a game in which there are real consequences. When you bet and you win, thats good for you, its bad for those against whom you have bet. There are always losers in this kind of a game.

Soros: No. See, its not a zero-sum game. Its very important to realize

Ted Koppel: Well, its not zero sum in terms of investors. But, for example, when you bet against the British pound, that was not good for the British economy.

Soros: Well, it happened to be quite good for the British economy. It was not, lets say, good for the British treasury because they were on the other side of the tradeIts not your gain is not necessarily somebody elses loss.

Ted Koppel: Because I mean put it in easily understandable terms. I mean if you could have profited by destroying Malaysias currency, would you have shrunk from that?

Soros: Not necessarily because that would have been an unintended consequence of my action. And its not my job as a participant to calculate the consequences. This is what a market is. Thats the nature of a market. So Im a participant in the market.

TurtleTrader comment . Why would Soros say trading and speculating are not zero-sum games? Soros is to be saluted for his tremendous success, but he is indeed a speculator participating in a zero-sum game. Perhaps he is reluctant to be as brutally honest with Koppels audience as he is with himself. Trading is a zero-sum game when measured relative to underlying fundamental values. No trader can profit without another trader losing.

Hedge fund-soros fund management

Hedge fund-soros fund managementHedge Fund - Soros Fund Management

George Soros Bio, Returns, Net Worth

Eighty-year-old George Soros is a Hungarian-American hedge fund manager who became known as "the Man Who Broke the Bank of England" after he made $1 billion in 1992. Soros graduated from the London School of Economics in 1952. After graduation, he started his career in the London merchant bank of Singer & Friedlander. In 1956, he moved to New York City and his career took off. He earned large profits from investments and currency speculation. According to Forbes, George Soros is ranked 35th on the list of the world’s richest people, with an estimated net worth of $14.2 billion.

George Soros returned an average of 30.5% per year between 1969 and 2000. In 2007, Soros came back from retirement after the quant liquidity crunch and managed to generate a 32% return for the year. Soros even managed to return 8% in 2008, the worst year for most hedge funds. Soros also returned 29% in 2009, earning $3.3 billion in fees and investment gains.

George soros forex trading strategy

George soros forex trading strategyGeorge Soros Forex Trading Strategy

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Revealed george soros doubled his bet that the stock market is going down

Revealed george soros doubled his bet that the stock market is going downREVEALED: George Soros Doubled His Bet That The Stock Market Is Going Down

REUTERS/Bernadett Szabo George Soros

One day every quarter, the world's big fund managers reveal some of what they're buying and selling in their 13-F regulatory filings.

Generally speaking, these revelations aren't taken too seriously as they are 45-day-old snapshots. But over the weekend, one gigantic $1.3 billion position raised some eyebrows .

Soros Fund Management disclosed that it held put options on 7,090,000 shares of the SPDR SP 500 ETF (SPY) at the end of Q4.

Puts protect the holder of the option from declining prices. Soros' position makes money if $1.3 billion worth of the SPY declines in value.

And at $1.3 billion, this represents the largest position in the portfolio.

After touching an all-time high of 1,850 in January, the SP 500 got hit with some volatility that brought the index down by around 6%. However, markets have been coming back, and now the SP is less than 1% away from setting a new high.

This is not a totally new position for Soros. At the end of Q3, the fund held just 2,794,100 of these options. At the end of Q2, the fund held puts on 7,802,400 shares .

Again, these 13-Fs reveal holdings as of the end of Q4. So, we do not know if and how that position has changed since then.

SEE ALSO: GOLDMAN: Here's What Our Clients Worry About The Most

Jump on the george soros coal train

Jump on the george soros coal trainJump on the George Soros coal train

By Michael Kahn

If there ever was a sector in the stock market where the trend — the relentless, unforgiving trend — was your friend, it has had to be in the coal sector. Coal has been falling with little respite since early 2011 and the Dow Jones U. S. coal sector index has shed 94% of its value (see Chart 1).

But there comes a time in any bear market when the fundamentals get so bad that everyone just gives up, and that is when opportunity is created for brave investors. Even notorious environmentalist and billionaire investor George Soros looked at this group and in August, bought a chunk of two coal companies.

I am not a follower of fundamentals per se, but I do know that environmental regulations and the slowdown in the global economy, especially in China, combined to nearly kill the industry. Indeed, many companies that were on my sector watchlist for years are now bankrupt.

On the surface, it does look that there is nothing to like about coal stocks on any level. And that is just when contrarians should start to get interested.

Make no mistake, buying coal stocks goes against logic. And technically, the arguments I can make for a bottom are mediocre at best — that is, except for the sentiment angle. Everyone seems to think coal is hopeless, creating an extreme in bearish thought. That’s actually bullish because theoretically everyone who wanted to sell has already done so. Supply dries up.

Jump on the George Soros coal train

By Michael Kahn

If there ever was a sector in the stock market where the trend — the relentless, unforgiving trend — was your friend, it has had to be in the coal sector. Coal has been falling with little respite since early 2011 and the Dow Jones U. S. coal sector index has shed 94% of its value (see Chart 1).

But there comes a time in any bear market when the fundamentals get so bad that everyone just gives up, and that is when opportunity is created for brave investors. Even notorious environmentalist and billionaire investor George Soros looked at this group and in August, bought a chunk of two coal companies.

I am not a follower of fundamentals per se, but I do know that environmental regulations and the slowdown in the global economy, especially in China, combined to nearly kill the industry. Indeed, many companies that were on my sector watchlist for years are now bankrupt.

On the surface, it does look that there is nothing to like about coal stocks on any level. And that is just when contrarians should start to get interested.

Make no mistake, buying coal stocks goes against logic. And technically, the arguments I can make for a bottom are mediocre at best — that is, except for the sentiment angle. Everyone seems to think coal is hopeless, creating an extreme in bearish thought. That’s actually bullish because theoretically everyone who wanted to sell has already done so. Supply dries up.

Archangel of optimism

Archangel of optimismTuesday, November 29, 2011

George Soros Trading Strategy

George Soros is a Hungarian financier who was born in 1930 in the capital city of Budapest and later fled to avoid the Nazi's, after studying at the London School of Economics and then moved to America and has become one of most famous traders of all times..

Soros maqnages a highly successful fund management company and also runs the Quantum Investment Group. He became a household name when in 1992, when the Bank of England was forced to withdraw sterling from the European Exchange Rate Mechanism and devalue the currency; at the time he was nicknamed ・the man who broke the Bank of England. George Soros in this time period, traded an around $10 billion worth of the currency and made profits of around $1.1 billion. When the Asian crash occured, the Malaysian Parliament accused George Soros, of bringing down the country's currency. Of course he isn't always right and has had some huge losses as well and it's estimated he lost $2 billion, when trading Russian markets.

Philosophy of Trading

Some of his most interesting writings are on the belief, that traders sometimes do so on their own biases and therefore, change the market itself. He says that in this way trading can rather than promoting stability in the market, actually destabilize it and the view that a market will stabilize itself on its own, is often not always the case.

George Soros is a short-term trader and has a very aggressive style of trading. He makes massive, highly leveraged trades and his trading style is based on Global Macro strategy, a philosophy based on making massive, one-way bets on the movement of a financial investment. The bet is a simple one, based around whether the value of the investment traded will either rise or fall.

His strategy is based on reflexivity which rejects the idea that all information is known, to all market participants and thereby discounted in the price. Soros takes the view that market participants themselves, directly influence market fundamentals (as we looked at earlier) and its their irrational behaviour which lead to booms and busts that present him with investment opportunities.

George Soros Quotes

"Once we realize that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes"

"Markets are constantly in a state of uncertainty and flux and money is make by discounting the obvious and betting on the unexpected."

"Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception."

"The financial markets generally are unpredictable. So that one has to have different scenarios. The idea that you can actually predict what's going to happen contradicts my way of looking at the market."

"The worse a situation becomes the less it takes to turn it around, the bigger the upside".

Books - The Alchemy of Finance

If you want to know more about the trading techniques and strategies George Soros used to make billions, you should read the above book.

George Soros is unquestionably the most powerful and profitable investor in the world today. Dubbed by BusinessWeek as "The Man Who Moves Markets," Soros once made a billion dollars by betting that the British pound would be devalued. Soros is not merely a man of finance, but a thinker to reckon with as well. In The Alchemy of Finance, this extraordinary man reveals the investment strategies that have made him "a superstar among money managers"(The New York Times)

This book is not an easy read and doesn't give you a specific strategy you can use but it take you into the mind of one of the most successful traders of all time. You get to learn his philosophy of trading and life and for that reason, this book should be read by any serious trader.

One of the World's Best Traders?

Trading like George Soros is pure aggression and while it can yield huge profits he downside of betting big and winning big is of course, betting big and losing big. Over the course of more than three decades, he has made the right moves on numerous occasions, generating Billions of Dollars in profit and a huge number of fans among traders who hold him in awe on the other hand, a huge number of critics amongst those on the losing end of his trades. The fact is George Soros is one of the most famous and one of the most successful traders of all time and in the business of finance, you are judged on profits alone and few have made better gains than him.

Trading strategy of george soros

Trading strategy of george sorosI Have This Quote Taped to My Computer. You Should, Too

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Readers should be aware that trading stocks and all other financial instruments involves risk. Past performance is no guarantee of future results, and we make no representation that any customer will or is likely to achieve similar results.

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Any performance results of our recommendations prepared by SA are not based on actual trading of securities but are instead based on a hypothetical trading account. Hypothetical performance results have many inherent limitations. Your actual results may vary.

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George soros trading strategies

George soros trading strategiesGeorge soros trading strategies

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Buffett vssoros investment strategies

Buffett vssoros investment strategiesBuffett Vs. Soros: Investment Strategies

In the short run, investment success can be accomplished in a myriad of ways. Speculators and day traders often deliver extraordinary high rates of return, sometimes within a few hours. Generating a superior rate of return consistently over a further time horizon, however, requires a masterful understanding of the market mechanisms and a definitive investment strategy. Two such market players fit the bill: Warren Buffett and George Soros.

Warren Buffett

Known as "the Oracle of Omaha," Warren Buffett made his first investment at the tender age of 11. In his early 20s, the young prodigy would study at Columbia University, under the father of value investing and his personal mentor, Benjamin Graham. Graham argued that every security had an intrinsic value that was independent of its market price, instilling in Buffett the knowledge with which he would build his conglomerate empire. Shortly after graduating he formed "Buffett Partnership" and never looked back. Over time, the firm evolved into "Berkshire Hathaway ," with a market capitalization over $200 billion. Each stock share is valued at near $130,000, as Buffett refuses to perform a stock split on his company's ownership shares.

Buffett is an arbitrageur who is known to instruct his followers to "be fearful when others are greedy, and be greedy when others are fearful." Much of his success can be attributed to Graham's three cardinal rules: invest with a margin of safety. profit from volatility and know yourself. As such, Warren Buffett has the ability to suppress his emotion and execute these rules in the face of economic fluctuations.

George Soros

Another 21st century financial titan, George Soros was born in Budapest in 1930, fleeing the country after WWII to escape communism. Fittingly, Soros subscribes to the concept of "reflexivity " social theory, adopting a "a set of ideas that seeks to explain how a feedback mechanism can skew how participants in a market value assets on that market."

Graduating from the London School of Economics some years later, Soros would go on to create the Quantum Fund. Managing this fund from 1973 to 2011, Soros returned roughly 20% to investors annually. The Quantum Fund decided to shut down based on "new financial regulations requiring hedge funds to register with the Securities and Exchange Commission." Soros continues to take an active role in the administration of Soros Fund Management, another hedge fund he founded.

Where Buffett seeks out a firm's intrinsic value and waits for the market to adjust accordingly over time, Soros relies on short-term volatility and highly leveraged transactions. In short, Soros is a speculator. The fundamentals of a prospective investment, while important at times, play a minor role in his decision-making.

In fact, in the early 1990s, Soros made a multi-billion dollar bet that the British pound would significantly depreciate in value over the course of a single day of trading. In essence, he was directly battling the British central banking system in its attempt to keep the pound artificially competitive in foreign exchange markets. Soros, of course, made a tidy $1 billion off the deal. As a result, we know him today as the man "who broke the bank of England."

The Bottom Line

Warren Buffett and George Soros are contemporary examples of the some of the most brilliant minds in the history of investing. While they employ markedly different investing strategies, both men have achieved great success. Investors can learn much from even a basic understanding of their investment strategies and techniques.

Can george soros-methods be replicated

Can george soros-methods be replicatedCan George Soros Methods Be Replicated?

I received this comment on one of my recent posts. The George Soros question got me thinking about how interesting the different philosophies are. Soros had an incredible career, but is it possible to replicate his general strategy?

Here is the basic comment from the reader:

Your posts have given me a great deal of information.

What is your opinion on George Soros’ theory of reflexivity? I was reading Seth Klarman’s Margin of Safety, and it mentioned how in rare times price will actually affect value of the underlying company. This actually made me fearful since then value investing wouldn’t work. One of his examples was a company in financial distress. If (the market) thinks it’s worthless the company will go insolvent because no one wants to buy the stock they’re selling or no one wants to give a loan to the company.

Even if the company is valuable if the market doesn’t recognize it, management may take the market’s perception to heart and do actions that will eventually bring the market’s perception to reality.

Soros interests me since sometimes price does affect value, and his theory of reflexivity sort of correlates with value investing.

What do you think?

I added some thoughts, but here is my basic response:

Thanks for the nice words. I appreciate you reading…

Soros built an incredible record. I’ve read his book but find his methods too abstract for my liking. Soros is a philosopher. I get the impression from reading his work that he desires more than anything else to be the smartest man in the room. I’m not trying to disparage him, this is just my opinion I got from reading his writing. I do think he is an incredibly smart guy, and he probably has difficulty explaining his ideas to the everyday person, and that’s probably why his writing comes off like that to me. (read: Im not smart enough to keep up with his ideas!)

Reflexivity Goes into the Too-Hard Pile

I personally prefer much simpler ideas. Reflexivity is a way to think about the world. It has some merit I think… but it’s very difficult to replicate a method like Soros’. It’s not impossible, but very difficult. It’s an art form.

Plain vanilla value investing has some art as well, but it’s less abstract. It’s far easier to figure out how much a stream of cash flow is worth, or better yet, figure out how much the assets are worth that the company currently has on its balance sheet than trying to figure out the opinions of value that the majority of market participants are going to place on a particular asset class or group of stocks.

Value investing is about figuring out what something is worth and paying a lot less. Soros method is more focused on figuring out what other people think, and then trying to predict how they will react.

Keynes talked about the market being a beauty contest where the winner was determined not on beauty alone, but by who the majority of voters thought was most beautiful (or even the next derivative after that!)

“It is not a case of choosing those [faces] that, to the best of one’s judgment, are really the prettiest, nor even those that average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees.” John Maynard Keynes, General Theory of Employment Interest and Money, 1936

This might be true in the short term, but in the long term, the market is not a voting machine, it’s a weighing machine. (Graham is easier for me to grasp than Keynes and Soros.)

With No Leverage, the Markets Opinion Matters Not

Your comments about companies caring about the way people think about them has merit when it comes to leveraged institutions such as financials or other companies with lots of balance sheet risk. These companies could go bankrupt if there was a colossal run on the system (like 2008 or worse), but these events are rare and the way to defend against them is to avoid taking on leverage risk. Companies without debt (or low amounts of debt) don’t have to worry about how the market thinks about them.

So I respect Soros’ results, certainly they are tough to beat… but even tougher to replicate. Buying cheap stocks in the tradition of Schloss or Graham is much easier for an investor like me to replicate. I have the discipline and the emotional mindset to do so, and it doesn’t take a genius to do it.

I usually ask myself these questions when considering a new idea:

Do I understand how the business makes money?

Is it cheap?

What are the insiders doing? Any catalysts?

What are the risks?

What’s the upside?

I try to find easy to understand situations where I can buy assets or earnings cheap. Doing that over and over again over time tends to work very well.

Thanks again for your thoughts. Always fun to consider different ideas. Thanks for reading…

Trading strategies jump on the george soros coal train

Trading strategies jump on the george soros coal trainTrading Strategies: Jump on the George Soros coal train

If there ever was a sector in the stock market where the trend — the relentless, unforgiving trend — was your friend, it has had to be in the coal sector. Coal has been falling with little respite since early 2011 and the Dow Jones U. S. coal sector index has shed 94% of its value (see Chart 1).

But there comes a time in any bear market when the fundamentals get so bad that everyone just gives up, and that is when opportunity is created for brave investors. Even notorious environmentalist and billionaire investor George Soros looked at this group and in August, bought a chunk of two coal companies.

I am not a follower of fundamentals per se, but I do know that environmental regulations and the slowdown in the global economy, especially in China, combined to nearly kill the industry. Indeed, many companies that were on my sector watchlist for years are now bankrupt.

On the surface, it does look that there is nothing to like about coal stocks on any level. And that is just when contrarians should start to get interested.

Make no mistake, buying coal stocks goes against logic. And technically, the arguments I can make for a bottom are mediocre at best — that is, except for the sentiment angle. Everyone seems to think coal is hopeless, creating an extreme in bearish thought. That’s actually bullish because theoretically everyone who wanted to sell has already done so. Supply dries up.

The gorilla in the room is George Soros, whose company bought stakes in both Arch Coal ACI, +2.42% and Peabody Energy BTU, -14.35% in August. Another gorilla is hedge fund manager Leon Black, whose company quietly bought a stake in Arch earlier this year.

If we put conspiracy theories aside, especially when it relates to Soros and his quite outspoken and negative stance on coal, then we are left with the idea that two very smart players, a. k.a. “smart money,” know something. If anything, the Soros purchase especially lit the very dry tinder of these stocks for a monstrous, albeit short-lived rally. Arch moved from the $2 level to $10 in less than two weeks’ time before giving back most of it.

Along the way, the negative sector-wide news parade continued. That kept a lid on enthusiasm by the coattail riders, but if we look at the technical study called on-balance volume, we will see that not all the money flowing in on the way up was lost on the way down. Arch was especially stingy on the give-back giving its chart a bullish divergence between price and indicator (see Chart 2).

We have to conclude that the underlying cause was that investors were not interested in selling hard on the pullback suggesting demand is still there.

There is another newer sentiment angle that I watch. A trading-oriented social-media website called StockTwits maintains rather bullish sentiment reads on both Peabody and Arch. I have found that sentiment there should actually be believed and not faded as with other measures. These traders seem to…

Trading Strategies: Jump On The George Soros Coal Train

BING NEWS:

Jump on the George Soros coal train

Even notorious environmentalist and billionaire investor George Soros looked at this group and in August, bought a chunk of two coal companies. I am not a follower of fundamentals per se, but I do know that environmental regulations and the slowdown in the.

10/1/2015 - 1:01 pm | View Link

BMO adviser Coxe: 'This is the worst trading situation I have ever seen'

There is a growing fear that if the miners develop technology to extract more gold, governments will jump in and make life miserable for. the money back to the U. S. This is one of the ways George Soros got so rich. He does not lead an extravagant.

BING SEARCH:

Stock Portfolio:

Correlated Groups. Trend Same Directions. Unlike sectors and industries, the correlated groups are collections of groups that are supposed to trend same directions.

11/15/2015 - 1:32 pm | View Website

Today's Stock Market News and Analysis

Get the latest news and analysis in the stock market today, including national and world stock market news, business news, financial news and more.

11/15/2015 - 3:45 am | View Website

George Soros

George Soros (/ ˈ s ɔr oʊ s / [3] or / ˈ s ɔr ɒ s /; Hungarian: Soros György; Hungarian: ; born August 12, 1930, as Schwartz György) is a Hungarian-born.

11/15/2015 - 2:26 am | View Website

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11/14/2015 - 11:35 pm | View Website

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Get the latest breaking politics news and political coverage of U. S. elections. Get updates on President Obama's White House, Congress and more at ABC News.

Trading Strategies: Jump On The George Soros Coal Train

BING NEWS:

Jump on the George Soros coal train

Even notorious environmentalist and billionaire investor George Soros looked at this group and in August, bought a chunk of two coal companies. I am not a follower of fundamentals per se, but I do know that environmental regulations and the slowdown in the.

10/1/2015 - 1:01 pm | View Link

BMO adviser Coxe: 'This is the worst trading situation I have ever seen'

There is a growing fear that if the miners develop technology to extract more gold, governments will jump in and make life miserable for. the money back to the U. S. This is one of the ways George Soros got so rich. He does not lead an extravagant.

BING SEARCH:

Stock Portfolio:

Correlated Groups. Trend Same Directions. Unlike sectors and industries, the correlated groups are collections of groups that are supposed to trend same directions.

11/15/2015 - 1:32 pm | View Website

Today's Stock Market News and Analysis

Get the latest news and analysis in the stock market today, including national and world stock market news, business news, financial news and more.

11/15/2015 - 3:45 am | View Website

George Soros

George Soros (/ ˈ s ɔr oʊ s / [3] or / ˈ s ɔr ɒ s /; Hungarian: Soros György; Hungarian: ; born August 12, 1930, as Schwartz György) is a Hungarian-born.

11/15/2015 - 2:26 am | View Website

Business News, Personal Finance and Money News

Find the latest business news on Wall Street, jobs and the economy, the housing market, personal finance and money investments and much more on ABC News

11/14/2015 - 11:35 pm | View Website

Politics News and U. S. Elections Coverage

Get the latest breaking politics news and political coverage of U. S. elections. Get updates on President Obama's White House, Congress and more at ABC News.

Eleven trading tips from george soros

Eleven trading tips from george sorosEleven Trading Tips from George Soros

I had misplaced my copy of Robert Slaters 1996 biography of George Soros, so I welcomed the opportunity to get my hands on Slaters recently released second edition entitled, Soros: The Life, Ideas, and Impact of the Worlds Most Influential Investor. It also seemed worth adding to the library since it had several new chapters updating the billionaire speculators life story to 2008.

Unfortunately, the new chapters werent particularly captivating from an investors point of view. I wasnt aware of how Soros life since 1996 has been more about philanthropy and political causes all very worthy pastimes but not the kind of material to inspire and instruct an active investor seeking more alpha.

There was no disappointment, however, in reading the chapters covering the younger, hedge-fund manager Soros — essentially the chapters in the first edition that I had read some 10 years ago. Slater is a fine writer with a breezy style and he did some good digging to serve up some substantive fare.

Like Warren Buffett, legendary hedge fund manager George Soros has long been an anomaly — an exception to the efficient market thesis that its futile to try and beat the market. Indeed, Soros not only beat the market over a span of several decades but ended up as one of the wealthiest persons in the world.

Another reason we might be interested in Soros is that he made much of his fortune trading volatility arising from monetary and financial shocks during the 20 years to 1992. We seem to be in a similar kind of era of volatility, so perhaps his approach holds some lessons for today.

Soros first wanted to be a philosopher, someone who made a contribution to human knowledge like Sigmund Freud or John Maynard Keynes. But he didnt impress his professors enough at the London School of Economics and after graduation had to settle for a career in the investment industry.

His capacity and penchant for deep thinking was one thing that distinguished him as a speculator. Specifically, he believed his theory of reflexivity gave him an edge. It postulated that the market had an inherent tendency toward disequilibrium — not equilibrium as economists models assumed.

Markets werent efficient but subject to self-reinforcing boom/bust sequences brought on by the interaction of perceptions and real-world developments. Basically, they fed on each other and produced long swings in economies and financial markets that ultimately reached unsustainable junctures. His job as an investor was to ride the boom up, spot the turning point, and go short the bust.

As I went along in the book, I took note of passages that shed some insight into Soros trading approach. Here is a list of eleven.

Some people spend all day talking to their brokers. Soros “prefers to talk to a select few people who can be really helpful ….” Then you need to think and read and reflect.

To be successful, you need leisure. You need time hanging heavily on your hands [to talk to people, read, and think].

If you have an investment thesis you like, run it by people who support the other side of the argument. See if you still like the thesis afterward.

Basically, the way Soros operates is to have a thesis and then he tests it in the market. If the market goes against his position and he feels uneasy (e. g. gets a backache), he cuts his losses.

What he took was basic information from various sources and kind of mulched it in his mind. Then he would come up with a thesis that most of the time was valid.

When Soros believed he was right … no investment position was too large. Holding back was for wimps. The worst error in Soros book was not being too bold.

The key to investing is knowing how to survive. That means at times playing conservatively, cutting losses when necessary and keeping a large portion of ones portfolio out of play.

If you are doing poorly, retrench. Dont try to recoup. And when you start again, start small.

To be in the game, you have to be willing to endure the pain.

Perhaps Soros most distinctive feature, the trait that explained his investment talents the best, was his ability to gain membership in a very ‘exclusive ‘ club that included the leadership of the international community…. Such encounters clearly gave Soros an advantage over other investors.

Invest first and then investigate … form a hypothesis, take a toehold position to test the hypothesis, and wait for the market to prove you are right or wrong.