George Soros and Turnaround Stock Investing

Turnaround Stock Investing is not like most investment sites. How many websites would tell investors that they concur with this George Soros quote, “To others, being wrong is a source of shame; to me, recognizing my mistakes is a source of pride”. I have no problem taking small losses as I follow an approach towards finding great turnaround stocks that will turn into multi-baggers.

I still challenge any hedge fund manager or businessperson that has created serious wealth to dispute my assertion that 20% or fewer of their investments in a year or lifetime provided the bulk of their wealth or returns.

When you get a 5 or 10 bagger it more than makes up for all the losses on other stocks. It’s never easy to stop out of a position after you have done allot of fundamental research but I do it with little anxiety. In many cases I reenter and in some cases, I never reenter as the stock keeps falling because the company never turns around.

I find the approach of combining excellent fundamental research with technical analysis to dramatically preserve my psychological capital. This allows me to stay focused on my 5 to 1 reward/risk ratio when I buy a stock. I make sure that I have the possibility to earn at least 5 times the risk I take on with every turnaround stock I buy. So, if I risk $1 a share I want to have a strong conviction that I can earn at least $5 a share. My stop is placed when I reach that $1 loss. This means that I can take on 5 trades and if only one works I will still make money. The key is to have your stops in place at the time you invest your capital. This way your ego and emotions don’t take control of you when you’re close to being stopped out. Without a stop in place, your ego is highly likely to make you double down which is going to increase your losses and decrease your psychological capital.

This is why I take to heart the Soros quote about losses. There is no shame in being wrong only in failing to correct our mistakes. If you are interested in finding turnaround stocks consider becoming a member of turnaround stock investing.