Category: Money Tips Date: 2007-01-07
Soros Investment Tip of the 8: Confirmation chaos
Unstable market state is Soros has been used to test its role in the theory of reflexivity positions, Soros believes that financial market volatility, disorder. Rules of the game is to grasp such a disorder, this is the way of making money. By investing in an unstable state of the market, even though his theory is not perfect, but in the end made him access to investment guru, the world's best investment managers of the crown,
Soros's theory according to understanding of the inherent laws of the financial market operation is not a stand-alone, market participants point of view, bias and psychological factors that help promote the development of things, or the role of constraints, so in the final development may be beyond most people had expected. Can be said that the operation of the market is not logical, more of a psychological, is based on groups of instinct. To a different understanding and prediction of things, often the main reason for confusion. Soros said the financial markets have the recipe for success is widely expected to be able to foresee the extraordinary mental ability, as to the precise predictions of the real world is not necessary.
Depends on the chaotic market participants a clear understanding of the differences of things. The greater this difference, the market performance of the chaotic nature of a stronger, but when the mainstream bias is often not clear. As the parties insist, the price trend is also volatile.
Soros is addicted to chaos, because that was his recipe for making money: understand the market in a revolutionary process. For example, in Germany after the reunification, the United Kingdom to join the Western European countries created a new monetary system - the European Exchange Rate system, the Soros seem to see the instability in financial markets in Europe impending chaos. Through years of observation, Soros and accurate grasp of its instability, when the vast majority of people do not recognize the presence of such instability, chaos happened. This blocking action in a transaction pound earned nearly 10 billion dollars.
From Soros's investment process, we can see that the objective of macroeconomic analysis, a good state of mind, all we recognize the confusion, seize the opportunity Luanzhongqusheng essential factors.
