If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring.
Interpretation
Successful investing requires discipline and patience rather than excitement and entertainment.
This quote by George Soros highlights the idea that effective investing is not about entertainment or excitement, but rather about careful analysis and a methodical approach. When investing is reduced to a form of entertainment, it often leads to poor decision-making and losses, as the focus shifts from sound strategies to immediate gratification and thrill.
In practice
This quote can be used in a finance seminar to stress the importance of a disciplined approach to investing.
The securitisation of mortgages added a new dimension of systemic risk. Financial engineers claimed they were reducing risks through geographic diversification: in fact they were increasing them by creating an agency problem. The agents were more interested in maximising fee income than in protecting the interests of bondholders. That is the verity that was ignored by regulators and market participants alike.
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.
Regulating and taxing marijuana would simultaneously save taxpayers billions of dollars in enforcement and incarceration costs, while providing many billions of dollars in revenue annually.
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.
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. But I can empower them. I can support them, and I can help them.
The criminalization of marijuana did not prevent marijuana from becoming the most widely used illegal substance in the United States and many other countries. But it did result in extensive costs and negative consequences.
The very nature of finance is that it cannot be profitable unless it is significantly leveraged... and as long as there is debt, there can be failure and contagion.
You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets.
There's so much disagreement about investing, and it's because nobody really knows.
There is always something to worry about. Avoid weekend thinking and ignoring the latest dire predictions of the newscasters. Sell a stock because the company's fundamentals deteriorate, not because the sky is falling.
Working for company X and having a substantial portion of your retirement plan in company X is simply exposing yourself to too much risk, because the company is both your employer and the source of your retirement income. So if something goes wrong, you lose both your job and your retirement plan.
Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.
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