How to Accept Losses Like a Winner?
Nobody enjoys losing, but success requires the ability to accept a loss. Just speak with a few of the most successful hedge fund managers in history. It isn’t about being correct, George Soros once remarked; it’s about how much money you earn when you’re right against how much money you lose when you’re wrong.
Stanley Druckenmiller, a very successful student of Soros, once said in an interview that he believes he is correct about 60% of the time. He is thus mistaken 40% of the time. Another billionaire macro icon, Paul Tudor Jones, has said that he is wrong approximately as frequently as he is correct, but he agrees with Soros that the sum of one’s wins is more important than the sum of one’s losses.
This implies that many of the world’s most successful hedge fund managers are often mistaken. And they don’t care since it is just crucial in terms of the game and not what is most important. What matters to them is risk management for their concepts and the asymmetry between their winning and failed ideas.
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