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Ride Bubbles, Make Billions: Easily Find The Biggest Market Trends
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Dec 11, 2024
Learn how to identify the next big megatrend by using George Soro's theory of reflexivity. ✉️ Learn the secrets of legendary traders and investors: https://bit.ly/4aCna7i 🔗 Follow along: https://analyzingalpha.com/george-soros-trading-strategy ⏱️ Video Chapters 0:00 Intro 1:22 George's Key Insights 2:09 Real Estate Bubble Reflexivity Example 3:42 Uncertainty Expresses Itself as Volatility 4:52 How do You Identify Megatrends? ❗Copyright Music: Sero by Stump (www.artlist.io) and Bass Boosted by Bass Music Movement, Public Domain Design and Footage: Pexels and Canva 🏷️ Tags #georgesoros
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0:00
it's September 16th 1992 and George
0:02
Soros and Stanley dren Miller are making
0:05
125 million an hour while the bank of
0:07
England is hemorrhaging by that evening
0:10
these legendary traders made over a
0:11
billion dollars in a single day how with
0:16
one simple concept that makes economic
0:18
departments tremble
0:21
reflexivity in this video I'm going to
0:23
reveal what reflexivity is and how it
0:25
mint billionaires why reflexivity makes
0:27
Market moves crystal clear and how it's
0:30
easier than you think to capitalize on
0:32
the next big Trend like George Soros but
0:35
first we need to understand the pivotal
0:37
moment that turned George Soros from an
0:39
unprofitable Speculator to a trading
0:41
Titan let's rewind to 1974 when
0:45
17-year-old George found himself reading
0:47
Carl poer while studying at the
0:49
prestigious London School of economics
0:52
and if you're not sure who Carl poer is
0:54
he's widely regarded as one of the
0:56
greatest philosophers of the 20th
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century Carl put forth that no perfect
1:00
knowledge exists at the same time
1:02
georg's economic professors argued for
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perfect knowledge and touted the
1:06
efficient market hypothesis these two
1:08
ideas can't coexist so which one is
1:11
right according to George poer is right
1:13
and a good thing for him because if he
1:15
didn't he wouldn't be a
1:16
multi-billionaire that he is today after
1:18
studying poer George had two key
1:21
insights that were fundamental to him
1:23
Conquering the markets one investors are
1:25
fallible they make imperfect decisions
1:28
based on incomplete information and two
1:31
markets are reflexive investors
1:33
imperfect actions move the very markets
1:35
they're a part of and while this might
1:37
seem like common sense it has massive
1:40
implications if you think deeply about
1:42
it it means that every Market move has
1:44
two components an underlying Trend based
1:47
in reality and a misconception related
1:50
to that Trend now here's where it gets
1:52
interesting a boom is set in motion when
1:54
a trend and a misconception positively
1:57
reinforce one another and if you can
1:59
ident identify the misconception you can
2:02
make bank or in Georgia's case break
2:04
them let's understand this through the
2:07
lens of a real estate bubble and see if
2:09
you can spot the trend and the
2:12
misconception when credit becomes
2:14
cheaper and more available real estate
2:16
activity picks up and home prices rise
2:20
after all there's more demand for the
2:21
same Supply since real estate values are
2:24
higher there are fewer defaults as
2:26
homeowners have more Equity making
2:27
lending standards relax further
2:29
positively reinforcing the trend on the
2:32
way the trend and the misconception or
2:34
misconceptions are tested if enough
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doubt Creeps in the bubble will burst
2:38
before it even gets started but if the
2:41
trend shakes off the test it accelerates
2:43
to the upside these tests are something
2:45
technical analysts have traded for
2:47
centuries but only with this
2:49
understanding can we comprehend the
2:51
reason behind them eventually an upward
2:54
move becomes unsustainable and when
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credit is most relaxed because there's
2:58
most leverage in the system and enough
3:00
doubt Creeps in this causes lending
3:02
standards to tighten making everything
3:04
move in the opposite direction forc
3:06
liquidation leads to reduce prices
3:08
increasing defaults causing further
3:10
tightening and become full circle so how
3:13
did you do did you spot the trend in the
3:15
misconception the trend is credit
3:18
becoming cheaper and more
3:19
available the misconception is the value
3:22
of collateral is independent of the
3:25
availability of credit it's not it's
3:27
reflexive if you can spot a trend and
3:29
it's misconception you're well in the
3:31
way to understanding the markets and
3:33
which Trends are most likely to turn
3:35
into Mega Trends and there's a reason
3:37
why they say the trend is your friend
3:39
but I'm going to add that the reversal
3:41
might just be your end and it's my hope
3:43
that the addition to this famous ad AG
3:45
gets edged in trading lore to
3:47
potentially save your skin and here's
3:49
why in markets heightened uncertainty
3:51
expresses itself as increased volatility
3:55
at the top action gets incredibly
3:57
volatile as there's uncertainty and
3:59
investors need to sell position to get
4:01
within reasonable open risk ranges this
4:04
reduction in position sizing combined
4:06
with deleveraging is why the market
4:08
takes the escalator up and the elevator
4:11
down and it's also why making money on
4:13
the short side is so much harder than it
4:16
is on the long side you get whipsaw if
4:18
you oversize your trades so keep them
4:20
small so you can ride the elevator down
4:22
as it will be a bumpy ride finally
4:25
there's almost always a bounce at the
4:26
bottom as volatility subsides and
4:28
liquidity comes back back into the
4:30
market congratulations now you've
4:32
learned what reflexivity is why the
4:35
markets move the way they do and if
4:37
you've been in the markets for any
4:38
period of time you now can fully
4:41
understand this diagram although I take
4:42
issue with who's moving the markets at
4:44
certain points but my point Remains the
4:47
Same but now enough of the why it's time
4:49
for the how how do you identify Mega
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Trends before they start or at least
4:53
early enough to jump on board for this
4:56
I'm going to tell you stories of two
4:57
legendary Traders capitalizing on
4:59
reflexivity the first is Christian quami
5:02
he's a Swedish swing Trader who's turned
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$5,000 into over 45 million 7 years
5:08
compounding at 268 annually and by the
5:11
way his compounding hasn't stopped but
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I'd rather my information be dated than
5:16
inaccurate one of his superpowers is
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getting in on Trends early or as he
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likes to call them themes Christian
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scans for the top 1 three and six month
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stock gainers and identifies the theme
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pushing these higher I'm not sure if CHR
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is looking for misconceptions or just
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capitalizing on theme momentum
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understanding human nature and that fomo
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is about to set in but there is one
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investor who does capitalize on
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misconceptions Chris Camilo an unknown
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Market wizard Chris doesn't use
5:43
fundamentals or charts but instead
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prefers to analyze social media trends
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by browsing Tik Tok and Twitter to
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understand where Wall Street is wrong
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and he's done a great job at it turning
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84,000 into 42 million in just 15 years
5:57
and for those of you asking how I do it
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you got it I lean towards Christian's
6:01
approach while keeping reflexivity in
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mind for instance let's say crypto is
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picking up steam I don't want to hold
6:07
individual cryptocurrencies because of
6:08
liquidity and security reasons so I'll
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own crypto players in the stock market
6:13
my choice would be coinbase a
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cryptocurrency exchange why it's the
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most popular exchange and it's publicly
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traded and it earns a percentage of each
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transaction if bitcoin's price doubles
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because of a sentiment shift coinbase
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Revenue also doubles from the same
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quantity of Bitcoin Trading
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and since there's really no extra effort
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for coinbase to process an additional
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transaction the marginal cost is near
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zero for each additional trade this
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means coinbase's operational cost stay
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flat while earning Skyrocket as media
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coverage intensifies around Rising
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prices of Bitcoin and ethereum a wave of
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fomo or fear of missing out motivates
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more people to buy in this Surge and
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buyer interest drives both trading
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volume and prices higher significantly
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boosting coinbase's future earnings the
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link between earnings and expectations
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is Crystal Clear I expect narrative
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shifts to emerge to support the medior
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rise such as Bitcoin is going to be the
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global currency or only 0.26% of the
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world can own one Bitcoin or get in
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before it's too late eventually
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investors recognize that their
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enthusiasm is placed leading to a shift
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in sentiment this negative bias then
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begins to drive bitcoin's price down
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adversely impacting its financials and
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fundamentals and its narrative which
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then reinforces the negative sentiment
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causing a Cascade effect before the
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eventual bust we've seen this time and
7:33
time again but by the time the bust
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occurs I'm long gone I've trailed my
7:38
profits using a moving average
7:40
understanding that it's better to be 10%
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late than 100% too early and if there's
7:44
a climax top I'd cut it earlier and yes
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there are likely ways to make more money
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on the trade by going for higher
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momentum picks in the same theme but I
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always prefer to take a smoother ride to
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the top and have enough room in the
7:56
elevators to get out before the
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inevitable drop so there you have it you
8:00
have learned what reflexivity is why the
8:02
markets move the way they do and how to
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capitalize on booms and busts the thing
8:07
is everything I just told you is
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completely useless if you don't have the
8:10
foresight to see the next big bubble or
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the KN how to structure your trade
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properly the best way to learn check out
8:18
this video that gives a play byplay of
8:20
how George and Stanley broke the bank of
8:21
England so you can see the Masters in
8:24
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