Unfortunately, the more complex the system, the greater the room for error.

Short term volatility is greatest at turning points and diminishes as a trend becomes established

The scope for improvement is infinite, precisely because perfection is unattainable.

I would be lying, however, if I claimed that I could always formulate worthwhile hypotheses on the basis of my theoretical framework. Sometimes there were no reflexive processes to be found; sometimes I failed to find them; and, what was the most painful of all, sometimes I got them wrong. One way or another, I often invested without a worthwhile hypothesis and my activities were not very different from a random walk.

We [at Soros Fund Management] use options and more exotic derivatives sparingly. We try to catch new trends early and in later stages we try to catch trend reversals. Therefore, we tend to stabilize rather than destabilize the market. We are not doing this as a public service. It is our style of making money.

I am not well qualified to criticize the theory of rational expectations and the efficient market hypothesis because as a market participant I considered them so unrealistic that I never bothered to study them.

No individual anonymous participant can influence the prices and therefore you really can speculate in the market without paying attention to morality. That's one of the positive features of markets. That's why they function.