George Soros

“Euphoria can lift housing and dot-com prices; panic can send sound banks tumbling.”

“The complexity of the world in which we live exceeds our capacity to comprehend it.”

“A boom/bust process occurs only when market prices find a way to influence the so-called fundamentals that are supposed to be reflected in market prices.”

“I assume that markets are always wrong. Even if my assumption is occasionally wrong, I use it as a working hypothesis.”

“The generally accepted theory is that financial markets tend towards equilibrium, and on the whole, discount the future correctly. I operate using a different theory, according to which financial markets cannot possibly discount the future correctly because they do not merely discount the future; they help to shape it.”

“Financial markets are inherently unstable; stability can be maintained only if it is made an objective of public policy. Moreover, instability is cumulative.”

“We start with the assumption that the stock market is always wrong, so that if you copy everybody else on Wall Street you’re doomed to do poorly.”

“I start with the assumption that the market is always wrong and that there is a divergence between the way people look at a situation and what the situation is.”

“Analysts generally regard the stock market as the passive reflection of investors’ expectations. But in fact, it is an active force in shaping them.”

“Equilibrium applies best only to markets that deal with known quantities. But financial markets deal with quantities that are not only largely unknown but unkownable.”

“The reality is that financial markets are self-destabilizing; occasionally they tend toward disequilibrium, not equilibrium.”

“Risk is when there are multiple possible future states and the probabilities of those different future states occurring are known.”

“The achievements of natural science stand as convincing testimony to man’s ability to use reason. Unfortunately, these achievements do not ensure that human behavior is always governed by reason.”

“Market prices of financial assets do not accurately reflect their fundamental value because they do not even aim to do so. Prices reflect market participants’ expectations of future market prices.”

“Every bubble has two components: an underlying trend that prevails in reality and a misconception relating to that trend.”