Thoughts on Investing from George Soros

What George Soros Believes

As seen in an article from fool.com, a famous quote from George Soros emphasizes the unpredictability in the stock market. George Soros believes that the market runs on the grounds of irrational behavior and investors should not give much weight to predictions. In fact, the stock market changed its course in 2015 despite having a decent beginning and outlook at the start of the year. Due to political uncertainty, crashing oil prices, and the threat of ISIL, the S&P 500 ended 2015 on essentially a flat note.

Stocks That Defy Predictions

Recent surprises in biotech stocks only serve to further George Soros‘ belief about the unpredictability of stocks. In 2010, analysts and pundits viewed biotech stocks as dangerous, but the performance of one such stock, the iShares Nasdaq Biotech ETF, ended up being remarkably strong. In fact, the iShares Nasdaq Biotech ETF saw a 307% gain from the start of 2010 through the end of 2015. Gilead Sciences is a biotech stock that underperformed its expectations in 2015, with a gain of only 9.2% compared to a prediction of 30%. Gilead Sciences was expected to outperform the small-cap cancer drugmaker Exelixis, which had an astonishing 240% gain in 2015 despite its negative cash flows and weak financial outlook.

Past Success

Holding the belief that stocks cannot be predicted, George Soros was able to achieve a tremendous amount of success during his career. In the midst of his tenure at the Quantum Fund, he averaged returns for investors of more than 30% each year, making him one of the best hedge fund managers to have existed. He has been thought of as second to only the famous Warren Buffett in the investment world, and investors give immense weight to his ideas and strategies.

Advice Going Into 2016

According to George Soros, investors should be prepared to take advantage of dips in the market and stay invested for unexpected turns in 2016. Trying to predict how the market will perform in a given time period is likely to prove fruitless in the long run. After all, George Soros points out that what should happen rarely ever does.

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