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Five Reasons to Listen to George Soros

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And why interpreting his position as bullish is almost certainly a mistake.

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So if you're a savvy investor, what steps can you take to translate moves being made by 3 of the best investors of our time into profits of your own?

1. A good place to start is by taking the time to understand precisely what drives these guys. Even though superficially they're different -- Rogers hunts for opportunities around the world, Soros tends to pursue investment plays involving currencies and macroeconomic trends, and Buffett's a deep-value guy -- they have much more in common than you think. That's especially true since the core elements of the strategies these 3 investors use to win and profit usually run counter to Wall Street's conventional wisdom.

2. Take the very concept of profits, for example: Most people are surprised to learn that none of these gentlemen spends the morning rubbing his hands together and cackling over how much money he's going to make that day. But nearly all have gone on record at one point or another about the importance of not losing money in the first place. They've also repeatedly stressed the importance of waiting until the really compelling opportunities develop before putting money at risk.

Rogers, once Soros' partner at the Quantum Fund -- a hedge fund that's often described as the first real global investment fund -- goes a step further: He describes his investment process as waiting until somebody puts money down in the corner, then "walking over and picking it up."

3. Moreover, none of these 3 investors believes you have to take big risks to make big money. In fact, all 3 believe, as I do, that it's how you concentrate your wealth that matters.

This flies in the face of what Wall Street would have you believe, which is that you need to diversify your assets to get ahead. Diversification as Wall Street practices it is a complete misuse of the math and a proxy for an entire establishment that doesn't know what it's doing.

The thinking is that by spreading your money around willy-nilly, some of your holdings will rise in value, even as other parts of the portfolio fall. Even so, by diversifying, Wall Street says that you'll be better off for it over the long run.

Granted, there are some instances where taking steps to "diversify" leaves you better off than if you'd done nothing at all, but one of the critical problems with diversification as Wall Street has practiced it is that it doesn't work when everything goes down at once -- as so many investors who'd been led to believe they were protected found out the hard way in 2000, and again in 2007.

That's why, for example, I'm a proponent of concentrating my efforts on a few relatively high-probability choices, especially when it comes to trading services, such as the Geiger Index or the New China Trader, for example.It's a strategy that individual investors should consider, as well.
No positions in stocks mentioned.
Fifteen trades. All profitable. Since launching his Geiger Index trading service late last year, Money Morning Investment Director Keith Fitz-Gerald is a perfect 15 for 15, meaning he's closed every single one of his trades at a profit. And he did this during one of the most volatile periods for the U.S. stock market since the Great Depression. Fitz-Gerald says the ongoing financial crisis has changed the investing game forever, and has created a completely new set of rules that investors must understand to survive and profit in this new era. Check out our latest insights on these new rules, this new market environment, and this new service, the Geiger Index.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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