📖George Soros
The Power of Compounding
Compounding is the most powerful force in investing.
Compound interest is the eighth wonder of the world. Those who understand it earn it; those who don't, pay it. Time is the most valuable asset in investing.
🏠 Everyday Analogy
📖 Core Interpretation
George Soros sees markets as cyclical rather than linear. Understanding cycle position improves risk-taking decisions more than trying to call exact tops and bottoms.
💎 Key Insight：Time amplifies returns exponentially.
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❓ Why It Matters
Ignoring cycles repeats the same mistakes: excessive optimism at peaks and excessive pessimism near troughs. Context matters for position sizing.
🎯 How to Practice
Monitor credit, valuation, earnings, and sentiment signals; reduce aggressiveness in euphoric phases and preserve flexibility in fearful phases.
⚠️ Common Pitfalls
Treating short rebounds as full cycle turns
Extrapolating peak conditions indefinitely
Becoming maximally defensive near valuation troughs
📚 Case Studies
1
Asian Financial Crisis Baht Bet (1997)
He hypothesized Thai authorities could not sustain the baht’s peg amid rising external debt and capital flight.
✨ Outcome：Short positions on the baht and related assets profited when Thailand devalued and regional markets sold off sharply.
2
Black Wednesday Pound Short (1992)
Soros bet heavily against the overvalued British pound ahead of its ERM exit, anticipating forced devaluation when the Bank of England could no longer defend the currency.
✨ Outcome：The pound crashed; Quantum Fund reportedly profited about $1 billion, cementing Soros’s reputation as the “man who broke the Bank of England.”
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