Ten Commandments of Investing by San Eng

Author:San Eng [San Eng, Tim Eng, Oia Eng]
Language: eng
Format: epub
Publisher: Morgan James Publishing
Published: 2021-02-14T16:00:00+00:00

George Soros

Soros famously told his head trader, “Go for the jugular,” and his fund sold one billion dollars’ worth of pound short, flooding the market. The government initially had enough US dollars in reserve to absorb the excess supply of the pound. When this was not enough, Soros called other investors and currency traders and asked them to follow suit. Seeing the weakness in the system, other traders happily complied and continued to sell the British pound. At one point, nearly $10 billion worth of the pound flooded the currency market. Without enough foreign currency reserves, the Bank of England could no longer maintain the currency rate as required by the European Exchange Rate Mechanism—a system to maintain stable value between currencies and encourage trade. As a result, the British had to give up their membership with the Exchange Rate Mechanism and allow the pound to lose its value as people dumped the currency. The value of the pound dropped from US$2 to US$1.5, losing 25% of its value over a few months.

This one conviction investment netted Soros one billion dollars. Soros cited his biggest regret as not being bold enough. He had done his homework, determined the intrinsic value of the pound, and gained religion on the weakness of the British currency system, so he could have bet bigger and made more profits. Of course, this is only true in hindsight. If the trade had gone terribly wrong, Soros could have lost big as well (read about Soros and the Hong Kong currency system in 1998). No Wizard has a 100% success rate in investing. In the case of the pound, Soros’ hard work and boldness to challenge the Bank of England allowed him to make a winning trade.

Will our friend Bobby Lee, one of the biggest Bitcoin evangelists, be proven a Wizard like Soros for his early and bold bet on this crypto-asset? Lee has vocally and boldly bet his reputation and career on the future of Bitcoin. We believe it is still too early to tell. (To decide for yourself, listen to his in-depth interview at https://wizards.institute/)

Once you are sure of your investment’s intrinsic value and have conviction, you must go big and go bold. A good opportunity does not come often, so act with decisiveness and conviction and seize it when the proper circumstances present themselves.

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