Friday, July 20, 2018

Friday Feature Book Review: Soros on Soros: Staying Ahead of the Curve by George Soros ジョージ・ソロス : デリバティブのマジシャン、投資理論、経営哲学: ジョージ・ソロス

George Soros, has a lot of say that is worth reading about. This is really 3 books in one. The first section is about trading, and is called "Investing and global Finance". The second section is about politics and is called "Geopolitics, Philanthropy, and Global Change". The third section is about  "Philosophy" and includes his personal one he called "reflexivity". Most readers focus on the first section, but that seems to be a bit short sighted. George Soros only started trading the Quantum Fund in his 40s. He was already a well formed financier, and it is his foundation of ideas that made him stand out. I will concentrate on this first section as it is the most financial in its flavor within this review.

To hope that you could read "a few good tips" on how to do better trading, and then make billions like him, would be a poor use of time. If anybody is motivated to make really big trades, and learn the edge needed to make mega profits, the bigger picture of the man is needed. Every trader has areas they excel at, and George Soros, was no exception. Like a surfer, he needed a very big wave to show his conviction and really impress. Others could be impressive with smaller waves in more regular numbers, but that is not what he did best. George Soros, was always about the mega trade. He was ultimately an "elephant hunter" in the financial markets. It was never about a preferred type of trade, but more of a window of timing matched with size that really set George Soros, apart of many others of his hedge fund trading generation. To get a full flavor of what it takes to be a trader of his class and stature, I would read all 3 sections of the book. This will help give a much wider perspective of the man, and therefore the person you need to be, to repeat his level of success.

This is in great contrast to his own insecurity about how wrong he could be about recognizing any big wave of opportunity in a trade. He always knew he could be wrong, and put on a big trade in size, with this knowledge. He may have had conviction, but he also always admitted that timing could change and force him to exit a trade quickly. This could be the case even if 24 hours before, he was full of conviction. Many traders in the market do not have this mental attitude. Too many traders often "get married" to an individual trade or a single position, and then "hope" it will change back into a profitable outcome when it goes negative early on. George Soros, never got married to any single position. It sets him apart mentally from 99% of most financial traders and risk takers in the market.

Another rare factor about the trading style preferences of george Soros was actually, his lack of style. Unlike many hedge fund traders who had a usual or signature trade or strategy, George Soros, never had a single one to call his own. It reminds me of a quote by Bruce Lee, "be like water, if water is in a cup, you are the cup" that kind of thing. Part of the strength that george Soros had in regard to strategy was a lack of one that was a clear pattern. Size and conviction appeal was the only true pattern that he would often follow. Equities, FX, Credit or Fixed Income never really attracted him "per se" It was the size potential of any single trade, not the actual type or strategy.

The Top 3 Takeaways from this book that really impact any reader are:

1) There is no single position or trade worth getting married to. If it goes negative, just cut it and move on. Just put the position back on, if the price moves again in your favor.

2) The is no best kind of trade, asset class or strategy. There are many ways to make money in markets, and it is best to be as familiar with as many as you can. Focus on the size of a trade's potential, not the type.

3) You need to have a clear vision about life and your purpose in it, before you can trade sucessfully. Wanting a lot of money is not a good enough start. You must think more deeply about an ultimate purpose.

It is worth reading all of the main 3 sections, not just the financial one to fully understand what makes George Soros tick inside. Whatever your politics, he at least at a clear reason written down in advance before he took action. Many other can argue about his liberal views and ideas, but it is best to balance them with why he even formed them in the first place. Life is a zero sum game for some. As a child, he was shielded from Nazi crimes by being raised publicly as a non-Jewish person in a secret adoption. It kept him alive. Despite having to witness terrible atrocities against other Jews as a youth, he had to contain himself. As an adult later in life, he could finally let out any anger he saw when seeing any similar actions taking place politically. All of that mental baggage certainly makes you think what does it take to make such a man. If that 360 view works for you, then this book is Highly Recommended!

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