📖George Soros
Probabilistic Thinking
Think in probabilities, not certainties.
Think in probabilities, not certainties. Every investment has a range of possible outcomes. Weight your decisions by the expected value of each scenario.
🏠 Everyday Analogy
📖 Core Interpretation
In Probabilistic Thinking, George Soros focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：Expected value calculations guide rational decisions.
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❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
Asian Financial Crisis Thai Baht Short (1997)
Anticipating Thailand’s unsustainable peg and mounting foreign-debt vulnerabilities, Soros’s fund took large speculative short positions in the Thai baht and related assets.
✨ Outcome：The baht devalued sharply in 1997; Quantum Fund earned substantial profits, illustrating his readiness to commit large capital when macro imbalances seem inevitable.
2
Asian Financial Crisis Positioning (1997)
Quantum Fund cut exposure to vulnerable Asian currencies and equities as imbalances grew, avoiding crowded long positions before the crisis.
✨ Outcome：Preserved capital and avoided large drawdowns while many regional investors suffered heavy losses.
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