Short term volatility is greatest at turning points and diminishes as a trend becomes established
Interpretation
Market fluctuations are most intense during major shifts in trends but stabilize once a trend is established.
This quote by George Soros highlights the concept of volatility in financial markets, indicating that periods of intense price changes often occur at critical junctions where market trends are changing. As a new trend takes hold, the market tends to calm down as participants adjust to the new reality, resulting in more stable price movements.
In practice
During a trading seminar, to explain the importance of recognizing market turning points.
The securitisation of mortgages added a new dimension of systemic risk. Financial engineers claimed they were reducing risks through geographic diversification: in fact they were increasing them by creating an agency problem. The agents were more interested in maximising fee income than in protecting the interests of bondholders. That is the verity that was ignored by regulators and market participants alike.
The collapse of the global marketplace would be a traumatic event with unimaginable consequences. Yet I find it easier to imagine than the continuation of the present regime.
Regulating and taxing marijuana would simultaneously save taxpayers billions of dollars in enforcement and incarceration costs, while providing many billions of dollars in revenue annually.
We are the most powerful nation on earth. No external power, no terrorist organization can defeat us. But we can defeat ourselves by getting caught in a quagmire.
My foundations support people in the country who care about an open society. It's their work that I'm supporting. So it's not me doing it. But I can empower them. I can support them, and I can help them.
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Most women file for bankruptcy in the aftermath of a serious medical problem, a job loss, or a family break up. It is hard to protect against those.
Your most expensive advice is the free advice you receive from your financially struggling friends and relatives.
There is nothing so disastrous as a rational investment policy in an irrational world.
The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient.
I do not understand where the backing of Bitcoin is coming from. There is no fundamental issue of capabilities of repaying it in anything which is universally acceptable, which is either intrinsic value of the currency or the credit or trust of the individual who is issuing the money, whether it's a government or an individual.
The enthusiasm for Tesla and other bubble-basket stocks is reminiscent of the March 2000 dot-com bubble. As was the case then, the bulls rejected conventional valuation methods for a handful of stocks that seemingly could only go up. While we don't know exactly when the bubble will pop, it eventually will.
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