A Quote by George Soros
The prevailing wisdom is that markets are always right. I take the opposite position. I assume that markets are always wrong.
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Trading has taught me not to take the conventional wisdom for granted. What money I made in trading is testimony to the fact that the majority is wrong a lot of the time. The vast majority is wrong even more of the time. I've learned that markets, which are often just mad crowds, are often irrational; when emotionally overwrought, they're almost always wrong.
There's been a dichotomy in the world financial markets over the last 30 years between the developed markets and the developing markets. Brazil, for example, always had to pay a lot more in interest to borrow money than governments in developed nations.
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.
I had always been interested in markets - specifically, the theory that in financial markets, goods will trade at a fair value only when everyone has access to the same information.
It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon.
There will always be bull markets followed by bear markets followed by bull markets
When you are starting a new business you don't want to go after giant markets. You want to go after small markets and take over those markets quickly.
Markets are a social construction, they're made from institutions. We in a democratic society create markets, we constitute markets, we bring them into existence, and we shouldn't turn markets over to a narrow group of people who regulate them and run them in their interests, rather they should be run democratically for the common good.
The problem isn't that conservatives are wrong about the efficiency of markets or the creativity of enterprise. It's that they have made false idols of both, usually without acknowledging that markets work best when well regulated, that private enterprise cannot meet every human need, that government has always played a critical role in our economy, and that the profit motive can be socially and environmentally destructive as well as dynamic.
Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.
Capitalism has taught us that markets are always more efficient than hierarchical managerial coordination. But in a situation where those three conditions aren't met, I can't outsource or partner with you because markets don't function in the absence of sufficient information.
Since the dawn of civilization, markets have been ubiquitous. Many of us have benefited from their focus and efficiency. Yet two widely held beliefs - that markets are best left unregulated and that markets are inherently benign - are naive and outdated.
Markets help people pursue their happiness more efficiently and effectively. Because they are so effective, markets provide benefits right here and right now, even while government is busy batching the protection of happiness.
I THINK ITS COOL THAT OTHER CROWDS LIKE WHAT I DO. HOWEVER IVE ALWAYS HAD A GOOD MIX OF PEOPLE AT MY SHOWS. I STARTED DOING THINGS ON RADIO ON ROCK MARKETS AND ALTERNATIVE MARKETS. IVE ALWAYS BEEN A COUNTRY TYPE ACT HOWEVER I STARTED WITH THE ROCK MARKET. IM VERY INTERCHANGEABLE.
But I can tell you markets are like women, always commanding, always mysterious, always volatile, always exciting and it is not a joke.
The government can always rescue the markets or interfere with contract law whenever it deems convenient with little or no apparent cost. (Investors believe this now and, worse still, the government believes it as well. We are probably doomed to a lasting legacy of government tampering with financial markets and the economy, which is likely to create the mother of all moral hazards. The government is blissfully unaware of the wisdom of Friedrich Hayek: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.")
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