Let me start with a confession. There are some people I will pay not to listen to, and one of them is George Soros. First, let's dispense with the myth that this guy is a great investor. I don't know Buffett, but if I did, I would tell you that Soros is no Buffett. George Soros is a speculator who got lucky at two levels. The first was timing.. betting against the British pound in the early 1990s was perfect. The second was that he has made his big score betting against central banks that refused to face the facts.
There are many investors who mistake luck for skill and I would not blame Soros for doing the same, if it were his only fault. There are two things about the man that I find distasteful:
1. Moral high ground: I find it hard to listen to lectures on morality and ethics from Mr. Soros, A speculator who made his money on a few big bets should not be telling the rest of the world what constitutes good or moral behavior and why hard work should be rewarded.
2. False expertise: The Financial Times has been publishing a series of articles by Soros on how banking can be fixed in developed markets. A few years ago, Soros also told us what was wrong with the derivatives markets and why options and futures should be restricted, regulated or banned because they could be misused. Unfortunately, the man knows little about either. But, he made a lot of money on derivatives, you say... True! But we don't consider a guy who hits the jackpot on a slot machine in a casino to be an expert on probabilities, do we?
My point is a larger one. We assume that people who have been successful in investing know a great deal more about investing than we do. We buy their books, we listen to them on television and radio and worst of all, we entrust our savings to them at substantial cost. While this may be true in a few cases, it is not true in most. Most successful investors and traders are successful because they are lucky and not because of their intellectual prowess or investing smarts... it is better to be lucky than smart. A few of these investors (like Soros) let success get to their heads and start believing their own hype. They should be ignored!