George soros quotes

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

Investors operate with limited funds and intelligence, they do not need to know everything. As long as they understand something better than others, they have an edge.

Discount the obvious, bet on the unexpected

It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong

The concept of a general equilibrium has no relevance to the real world (in other words, classical economics is an exercise in futility).

We [at Soros Fund Management] use options and more exotic derivatives sparingly. We try to catch new trends early and in later stages we try to catch trend reversals. Therefore, we tend to stabilize rather than destabilize the market. We are not doing this as a public service. It is our style of making money.

If the bubbles contain a misconception, as they always do, then it can't be maintained forever.

Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend and step off before it is discredited.

I am not well qualified to criticize the theory of rational expectations and the efficient market hypothesis because as a market participant I considered them so unrealistic that I never bothered to study them.

Outperforming the market with low volatility on a consistent basis is an impossibility. I outperformed the market for 30-odd years, but not with low volatility.

It is sort of a disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.

I give away something up to $500 million a year throughout the world promoting Open Society. My foundations support people in the country who care about an open society. It's their work that I'm supporting. So it's not me doing it.

The main obstacle to a stable and just world order is the United States.

My conceptual framework, which basically emphasizes the importance of misconceptions, makes me extremely critical of my own decisions. I know that I am bound to be wrong, and therefore am more likely to correct my own mistakes.

As an anonymous participant in financial markets, I never had to weigh the social consequences of my actions ... I felt justified in ignoring them on the grounds that I was playing by the rules.

I would be lying, however, if I claimed that I could always formulate worthwhile hypotheses on the basis of my theoretical framework. Sometimes there were no reflexive processes to be found; sometimes I failed to find them; and, what was the most painful of all, sometimes I got them wrong. One way or another, I often invested without a worthwhile hypothesis and my activities were not very different from a random walk.

Democracy, by its very nature, can't be imposed on people. Democracy has to be the people deciding for themselves.

Although I have made a fortune in the financial markets, I now fear that the untrammeled intensification of laissez-faire capitalism and the spread of market values into all areas of life is endangering our open and democratic society. The main enemy of the open society, I believe, is no longer the communist but the capitalist threat.

I called gold the ultimate bubble, which means it may go higher. But it’s certainly not safe and it’s not going to last forever.

Revolutions usually start with enthusiasm and end in tears.

Increase your bets when you are confident and scale down your positions when you don't have conviction.

If we care about universal principles such as freedom, democracy and the rule of law, we cannot leave them to the care of market forces; we must establish some other institutions to safeguard them.

My approach works not by making valid predictions but by allowing me to correct false ones.

The strength of this country lies in the Declaration of Independence and the Bill of Rights and the freedom of speech and thought.

The only thing that could hurt me is if my success encouraged me to return to my childhood fantasies of omnipotence - but that is not likely to happen as long as I remain engaged in the financial markets, because they constantly remind me of my limitations.

In politics, manipulating reality can take presidence over finding reality.

The laissez-faire argument relies on the same tacit appeal to perfection as does communism.

Law has become a business. Health care has become a business. Unfortunately, politics has also become a business. That really undermines society.

I think there's a lot of merit in an international economy and global markets, but they're not sufficient because markets don't look after social needs.

It is credit that matters, not money (in other words, monetarism is a false ideology).

I fancied myself as some kind of god or an economic reformer like Keynes

I am for maximum supervision and minimum regulation.

To my mind, there is a solution which has to do with democracy, because democratic governments are subject to the will of the people. So, if the people will it, you can actually create international institutions through the democratic states.

The financial markets play an active role in determining what's going to happen, how the economy is going to function.

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

Fundamental analysis seeks to establish how underlying values are reflected in stock prices, whereas the theory of reflexivity shows how stock prices can influence underlying values

We are the most powerful nation on earth. No external power, no terrorist organization can defeat us. But we can defeat ourselves by getting caught in a quagmire.

Changeless society is characterized by the absense of alternatives.

The scope for improvement is infinite, precisely because perfection is unattainable.

There is a well-established conviction that the central banks always do what is necessary to keep the system going and then afterwards you then take care of the legal aspects. In a crisis, you simply do not have time to think about such concerns for too long.

The lower interest rates fueled housing and consumption booms in countries such as Spain and Ireland. At the same time, Germany, struggling with the burdens of reunification, tightened its belt and became more competitive. All this led to a wide divergence in economic performance. Europe became divided into creditor and debtor countries.

If the terrorists have the sympathy of people, it's much harder to find them. So we need people on our side, and that leads us to be responsible leaders of the world, show some concern with the problems.

Whenever there is a conflict between universal principles and self-interest, self-interest is likely to prevail.

Studying economics is not a good preparation for dealing with it.

My main concern is with the world order

The reality is that financial markets are self-destabilizing; occasionally they tend toward disequilibrium, not equilibrium.

The prevailing wisdom is that markets are always right. I take the opposite position. I assume that markets are always wrong.

These public-private partnerships are very, very dangerous. The most rotten part of the financial system in the US consisted of the government sponsored entities, Fannie Mae and Freddie Mac. They really kicked off this crisis. The state should set the rules and enforce them - but not become involved as a market player.

Every bubble consists of a trend that can be observed in the real world and a misconception relating to that trend. The two elements interact with each other in a reflexive manner.

Well, you know, I was a human being before I became a businessman.

The trouble with institutional investors is that their performance is usually measured relative to their peer group and not by an absolute yardstick. This makes them trend followers by definition.

I'm only rich because I know when I'm wrong.

To be successful, you need leisure. You need time hanging heavily on your hands.

There is no point in being confident and having a small position.

I rely a great deal on animal instincts.

When you sell options, you get paid for assuming risk. That can be a profitable business, but it does not mix well with the risks inherent in a leveraged portfolio.

I am not a Zionist, nor am I am a practicing Jew, but I have a great deal of sympathy for my fellow Jews and a deep concern for the survival of Israel.

At times of recession, running a budget deficit is highly desirable. Once the economy begins to recover, you have to balance the budget. But it will also need additional revenues. Should the government not receive them, we will all get punished with higher interest rates.

If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring.

Making an investment decision is like formulating a scientific hypothesis and submitting it to a practical test.

Short term volatility is greatest at turning points and diminishes as a trend becomes established

I am against market fundamentalism. I think this propaganda that government involvement is always bad has been very successful - but also very harmful to our society.

I contend that financial markets never reflect the underlying reality accurately; they always distort it in some way or another and the distortions find expression in market prices. Those distortions can, occasionally, find ways to affect the fundamentals that market prices are supposed to reflect.

As I discovered, there is a great deal of similarity between a boom-bust process in the financial markets and the rise and fall of the Soviet system.

Once a trend is established it tends to persist and to run it’s full course.

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.

When money is free, the rational lender will keep on lending until there is no one else to lend to.

The main enemy of the open society, I believe, is no longer the communist but the capitalist threat.

Markets can influence the events that they anticipate.

A lot of the evil in the world is actually not intentional. A lot of people in the financial system did a lot of damage without intending to.

If I had to sum up my practical skills, I would use one word: survival. And operating a hedge fund utilized my training in survival to the fullest.

My sense of insecurity keeps me alert, always ready to correct my errors.

Taking this view, it is possible to see financial markets as a laboratory for testing hypotheses, albeit not strictly scientific ones. The truth is, successful investing is a kind of alchemy.

Markets are imperfect. So you do need regulation, knowing that the regulators are also human.

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.

The people currently in charge have forgotten the first principle of an open society, namely that we may be wrong and that there has to be free discussion. That it's possible to be opposed to the policies without being unpatriotic.

Hedge funds are a very efficient way of managing money. But there are clearly some risks. Hedge funds use credit and credit is a source of instability. Transactions involving credit should be regulated.

A global economy is characterized not only by the free movement of goods and services but, more important, by the free movement of ideas and of capital.

When a long-term trend loses it’s momentum, short-term volatility tends to rise. It is easy to see why that should be so: the trend-following crowd is disoriented.

Every bubble has two components: something - some real trend, and a misconception about that trend.

The generally accepted view is that markets are always right -- that is, market prices tend to discount future developments accurately even when it is unclear what those developments are. I start with the opposite view. I believe the market prices are always wrong in the sense that they present a biased view of the future.

The collapse of the global marketplace would be a traumatic event with unimaginable consequences. Yet I find it easier to imagine than the continuation of the present regime.

I admire Chancellor Merkel for her leadership qualities, but she is leading Europe in the wrong direction.

I chose America as my home because I value freedom and democracy, civil liberties and an open society.

Money values do not simply mirror the state of affairs in the real world; valuation is a positive act that makes an impact on the course of events. Monetary and real phenomena are connected in a reflexive fashion; that is, they influence each other mutually. The reflexive relationship manifests itself most clearly in the use and abuse of credit.

America needs to follow the policies it has introduced in Germany. We have to go through a certain de-Nazification process.

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

The world order needs a major overhaul.

I'll tell you what I'd do if it were up to me: I would establish a strictly controlled distribution network through which I would make most drugs, excluding the most dangerous ones like crack, legally available. Initially I would keep the prices low enough to destroy the drug trade. Once that objective was attained I would keep raising the prices, very much like the excise duty on cigarettes, but I would make an exception for registered addicts in order to discourage crime. I would use a portion of the income for prevention and treatment. And I would foster social opprobrium of drug use.

I'm only rich because I know when I'm wrong...I basically have survived by recognizing my mistakes.

In certain circumstances, financial markets can affect the so-called fundamentals which they are supposed to reflect. When that happens, markets enter into a state of dynamic disequilibrium and behave quite differently from what would be considered normal by the theory of efficient markets. Such boom/bust sequences do not arise very often, but when they do, they can be very disruptive, exactly because they affect the fundamentals of the economy.

Making an investment decision is like formulating a scientific hypothesis and submitting it to a practical test. The main difference is that the hypothesis that underlies an investment decision is intended to make money and not to establish a universally valid generalization.

Who most benefits from keeping marijuana illegal? The greatest beneficiaries are the major criminal organizations in Mexico and elsewhere that earn billions of dollars annually from this illicit trade - and who would rapidly lose their competitive advantage if marijuana were a legal commodity.

The main obstacle to a stable and just world order is the United States. [This idea] happens to coincide with the prevailing opinion in the world. And I think that's rather shocking for Americans to hear.

There is always a divergence between our perception and what actually exists.

What works for Germany can't work for the rest of Europe: No country can run a chronic surplus without others running deficits.

It is much easier to put existing resources to better use, than to develop resources where they do not exist.

The integration of Europe was very much led by a Germany that was always willing to pay a little bit extra to reach a compromise that everybody accepted, because Germany was so eager to get European support for reunification. That was called the "farsighted vision," which created the European Union.

I don't panic. The same thing applies to me as to everybody else, so I'm given to euphoria and despair. And I would say that I basically have survived by recognizing my mistakes.

The global crisis is caused by pathologies inherent in the global financial system itself.

When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.

By creating the European Central Bank, the member states exposed their own government bonds to the risk of default. Developed countries that issue bonds in their own currency never default, because they can always print money. Their currency may depreciate, but the risk of default is absent.

There is very little difference between speculation and investment. The only difference is basically that investments are successful speculations because if you successfully anticipate the future you make a speculative profit.

Misconceptions play a prominent role in my view of the world.

American supremacy is the greatest threat to the world today.

Most of the poverty and misery in the world is due to bad government, lack of democracy, weak states, internal strife, and so on.

I very often used to get backaches due to the fact that I was wrong. Whenever you are wrong you have to fight or [take] flight. When [I] make the decision, the backache goes away.

To others, being wrong is a source of shame; to me, recognizing my mistakes is a source of pride.

Market prices are always wrong in the sense that they present a biased view of the future.

The hardest thing to judge is what level of risk is safe.

Markets are designed to allow individuals to look after their private needs and to pursue profit. It's really a great invention, and I wouldn't underestimate the value of that. But they're not designed to take care of social needs.

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

Find the trend whose premise is false, and bet against it.

When I had made more money than I needed for myself and my family, I set up a foundation to promote the values and principles of a free and open society.

I'm not better than the next trader, just quicker at admitting my mistakes and moving on to the next opportunity.

If truth be known, I carried some rather potent messianic fantasies with me from childhood which I felt I had to control, otherwise I might end up in the loony bin. But when I made my way in the world I wanted to indulge myself in my fantasies to the extent that I could afford.

Market prices are always wrong.

Start by assuming the market is always wrong, so if you copy everybody else on Wall Street, you're doomed to do poorly.

The sovereignty of states must be subordinated to international law and international institutions.

Unfortunately, the more complex the system, the greater the room for error.

If we carry this line of argument to its logical conclusion, the meaning of life consists of the flaws in one's conceptions and what one does about them. Life can be seen as a fertile fallacy.

An open society is a society which allows its members the greatest possible degree of freedom in pursuing their interests compatible with the interests of others.

Political debate is more interested in manipulating the truth, than finding the truth.

No individual anonymous participant can influence the prices and therefore you really can speculate in the market without paying attention to morality. That's one of the positive features of markets. That's why they function.

Financial markets are supposed to swing like a pendulum: They may fluctuate wildly in response to exogenous shocks, but eventually they are supposed to come to rest at an equilibrium point and that point is supposed to be the same irrespective of the interim fluctuations. Instead, as I told Congress, financial markets behaved more like a wrecking ball, swinging from country to country and knocking over the weaker ones. It is difficult to escape the conclusion that the international financial system itself constituted the main ingredient in the meltdown process.