Top Highlights

• To use a sailing analogy, the wind matters, but the tide matters, too. If you don’t know what the tide is, and you plan everything just based on the wind, you are going to end up crashing into the rocks. That is how I see fundamentals and technicals. You need to pay attention to both to make sense of the picture.
• The genius of Soros was recognizing the turning point when things change—the ability to not only know that a position was right, but that it was right now, and that now was the time to have a big risk on the trade.
• Because no one cares. As long as no one cares about it, there is no trend. Would you be short Nasdaq in 1999? You can’t be short just because you think fundamentally something is overpriced.
• Even though something might be a good idea, you need to wait for and recognize the right time.
• Declining housing prices were the impending storm clouds, but it started raining when money markets stopped working. Most people, however, didn’t notice. Fundamentals are not about forecasting the weather for tomorrow, but rather noticing that it is raining today.