Many people are obsessed with understanding George Soros’s “investment philosophy” which is actually very simple, here I will break it down for you.
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1. The most important thing to understand about Soros is that what he *wanted* was to be a philosopher but what he was *good at* was trading which led him to write several books disguising his ideas about trading with pseudo-philosophical bullshit (eg “reflexivity”)
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2. His trading can be mostly summed up as “get involved in trends”, “stop being involved when the trend has ended and they are obviously over/undervalued”, and “have an insane risk tolerance but good risk management”.
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3. This worked out great for him because he was active at a time when markets were really inefficient and trend following worked really well. It probably won’t work any more (eg see Druckenmiller’s recent performance)
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The good risk management part is key. Maybe some part of the trading record was a lie or an exaggeration just to create a “legend”? Like going from short to long 300% in one levered position overnight? Only need to be down 10-15% to hit initial margin call. Sounds nuts to me.
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At the end of the day it’s all trend following.
End of conversation
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