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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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4. But what matters most is that people put the comments they hear from these guys into perspective and think for themselves. It's important to remember that Buffett, Soros, and Rogers don't care about what other people think. That's one of their real strengths. Nor do they care what the markets will or won't do.

In fact, none of the 3 -- at least as far as I can tell from the research I've done -- subscribes to the "random walk" or "efficient market" theories, which I take to be complete bunk.

5. The bottom line is that Soros, Buffett, and Rogers have demonstrated time and again that they'll only make a move when they're darned good and ready -- when they've done all they can to scope out the situation at hand, and to make sure that the percentages are in their favor.

That, by itself, is a terrific lesson for retail investors to learn. Wall Street tries to push investors into action with advertisements portraying "real" people making trades from their kitchens, or getting the latest quotes on their mobile phones. They show attractive retired couples who've achieved their dreams with big sailboats, or antique cars, or expensive vacations. Ignore those messages, and you've effectively elbowed aside the artificial sense of urgency that Wall Street is trying to create.

Not only is this manufactured urgency designed to separate more of you from your money, but they wouldn't do it if they knew that most investors got it "right" more often than they got it wrong.

Buffett, Soros, and Rogers act only when they believe the time is right. Buffett has referred to this as waiting for the Sunday pitch. If you've never heard that term before, it's one that dictates extreme patience while all the spitballs, knucklers, and sliders go by. You only take action when the one pitch you know you can hit out of the park is on its way -- then you swing from the heels, and give it all your effort.

There's one final thing these guys do better than almost anyone: Keep everything in perspective. They assemble their portfolios with diligent planning, attention to detail, and an emphasis on the objectives they expect to achieve. They make investments based on a clearly defined set of expectations and don't hesitate to cut their losses if they find out they were wrong.

In that sense, every investment choice they make fits a specific role in their portfolio. Nothing, if they can help it, is left to chance. So to the extent there's any action to be taken right now, let me leave you with one final thought.

No nation in the history of mankind has ever bailed itself out by doing what we're doing now, which means that placing bets on a "recovery" is really a fool's errand. On the other hand, making choices that capitalize on the trillions of dollars now being injected into the world's financial system is the place to be. History shows that it's better to be generally long resources, inflation-resistant choices, and real companies with real earnings.

Not only will these kinds of profit plays fall less than others if the markets stumble and fall from here, they'll also rise faster and farther once the capital infusions start to work their way through the global financial system and the rebound gets under way.

And I'll bet my bottom dollar that George Soros knows it.
No positions in stocks mentioned.
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