Economics

The Alchemy of Finance

The Alchemy of Finance

  • Downloads：3106
  • Type：Epub+TxT+PDF+Mobi
  • Create Date：2021-05-03 08:55:37
  • Update Date：2025-09-07
  • Status：finish
  • Author：George Soros
  • ISBN：0471445495
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Summary

George Soros ist unbestritten einer der m�chtigsten und gewinntr�chtigsten Investoren weltweit; seine Investmentprinzipien sind immer popul�rer geworden。

The Alchemy of Finance ist eine Sonderauflage der 1987 erschienenen Originalausgabe des Buches。 Sie wurde umfassend aktualisiert und mit erweitertem Vorwort und Einleitung versehen， die Soros zeitlose Investmentstrategien in einen modernen Kontext stellen。

Sie enth�lt ein neues Kapitel， in dem Soros seine Erfolgsgeheimnisse l�ftet sowie ein Vorwort des ehemaligen US-Notenbankchefs Paul Volcker。

Soros erl�utert detailliert seine innovativen Investmentstrategien， die ihm �ber Jahrzehnte hinweg gute Dienste geleistet haben und gibt eine theoretische und praktische Einsch�tzung aktueller Finanztrends。

The Alchemy of Finance erscheint in neuem Design als Band der Reihe 'Wiley's Investment Classics Series'。

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Reviews

Prasad ，

Good

Radu ，

I decided to read this book after watching a series of videos featuring George Soros explaining his Theory of Reflexivity to a conference involving multiple universities and their students around the world， merely out of curiosity to understand more about the world's most notable advocate for open society and international finance。What I've discovered after reading this book is that the majority of George Soros' wealth came from shorting currency exchanges。 As a trader， Soros by his own words de I decided to read this book after watching a series of videos featuring George Soros explaining his Theory of Reflexivity to a conference involving multiple universities and their students around the world， merely out of curiosity to understand more about the world's most notable advocate for open society and international finance。What I've discovered after reading this book is that the majority of George Soros' wealth came from shorting currency exchanges。 As a trader， Soros by his own words describes how he seems to have an incredible instinct for the feel of the stock market， almost to the point he could constitute it as a form of black magic （which seems apt， considering the title of the book）。From a philosophical point of view， he is either unable （or unwilling） to explain his methodology beyond his emotional involvement in the market， though he admits from an anecdote involving a conversation with his own children who pointed out that half of the explanation he gave about his market strategy was total nonsense。The simplest way to explain his Theory of Reflexivity to view the market like a rubber band and to view every market participate as either a pragmatist （who view the world as it is） or an idealist （who views the world want it to be）。 Regardless of their viewpoint， market participants are inclined to "follow the bandwagon" at the slightest forecast of bad news and， like a rubber band， the market will snap back into place when a bull run is stretched too much for too long。What I found especially ironic was a segment at the back not related to the subject of the book， where George Soros explains the purpose of the open society as being "a society where nobody has a monopoly on truth，" which is especially ironic considering his financial contributions to Media Matters。 。。。more

Howard ，

Interesting reflexivity。 I love his references to alchemy as opposed to scientific， because markets cannot be analyzed scientifically， because there is lots of people and emotions in the markets。 Really interesting point of view。 This book was referenced in "Fooled by Randomness" so I grabbed it。 Soros used hypothesis and then the price tells him if he's right or wrong -- kinda scientific， eh？ Neat book。 I just wish there was a Kindle version， as the paperback is useless to me and my computer。 T Interesting reflexivity。 I love his references to alchemy as opposed to scientific， because markets cannot be analyzed scientifically， because there is lots of people and emotions in the markets。 Really interesting point of view。 This book was referenced in "Fooled by Randomness" so I grabbed it。 Soros used hypothesis and then the price tells him if he's right or wrong -- kinda scientific， eh？ Neat book。 I just wish there was a Kindle version， as the paperback is useless to me and my computer。 This is a complex book， and I will be studying it more。 。。。more

Inversor2185 ，

Este es un payaso。 Tiene conocimientos pero opera con muchísimo riesgo。 Tuvo suerte。Ahora se dedica a financiar chiringuitos y lobbies tóxicos de la izquierda。

Vamshi Krishna ，

Good

Jason Kim ，

Soros presents a view of the market valuation that is largely shaped by the market participants' bias rather than the theoretical inherent value of the market。I question how much is actually shaped by market bias vs how much is shaped by inherent value。 If we can answer this question， it might be possible to answer， which approach is more successful。 Soros presents a view of the market valuation that is largely shaped by the market participants' bias rather than the theoretical inherent value of the market。I question how much is actually shaped by market bias vs how much is shaped by inherent value。 If we can answer this question， it might be possible to answer， which approach is more successful。 。。。more

Ian Wagner ，

Fantastic book。 One of the most thorough refutations of the efficient market hypothesis。

Sean Nguyen ，

The book center around one single idea that George Soros embracing。 The interaction between the market and the observer of the market。The author proved himself as a deep thinker and do have strong domain knowledge on the topic that he touched。 The idea in the book is well presented will full fundamental and logical supports， and of course， the author clearly mentions that this is a theory， so it's the reader's job to make his own mind and conclusion。 However， since the book operates on an abstra The book center around one single idea that George Soros embracing。 The interaction between the market and the observer of the market。The author proved himself as a deep thinker and do have strong domain knowledge on the topic that he touched。 The idea in the book is well presented will full fundamental and logical supports， and of course， the author clearly mentions that this is a theory， so it's the reader's job to make his own mind and conclusion。 However， since the book operates on an abstracted and macro level， to be able to fully understand and internalize the author's examples and arguments， I would say readers need to have a good set of prior knowledge as well。In some parts， I do have a feeling of repetitive arguments and idea flow， but that might be a minor issue。Overall， a good book for those wants to pick up the mind of the dude that broke the Bank of England。 。。。more

Nik ，

"an expert who admits that he is shooting in the dark" does a great job to sum up this book 😂 "an expert who admits that he is shooting in the dark" does a great job to sum up this book 😂 。。。more

R。A。 Bentinck ，

If you are into to forex trading it's a book you should read。 If you are into to forex trading it's a book you should read。 。。。more

Adam ，

George Soros is a genius and this becomes apparent very early in the book。 His theory of reflexivity in how observers influence the events they are observing is fascinating。 Understanding that markets never have neen nor ever will be rational but instead follow self-reinforcing trends in a boom/bust cycle made for excellent reading。 However， during the real time experiment portion of the book， I had difficulty keeping up as he was on a completely different plane intellectually。 It was sort of li George Soros is a genius and this becomes apparent very early in the book。 His theory of reflexivity in how observers influence the events they are observing is fascinating。 Understanding that markets never have neen nor ever will be rational but instead follow self-reinforcing trends in a boom/bust cycle made for excellent reading。 However， during the real time experiment portion of the book， I had difficulty keeping up as he was on a completely different plane intellectually。 It was sort of like having Michael Jordan teach you free throws， his skillset and knowledge is so far removed from your reality that you'll likely gain very little from the experience。 If you're interested in reflexivity， my advice would be to skip this and read "The Soros Lectures" or watch them online。 Easier to digest and his updated thoughts （2009） are more refined。 。。。more

Saurav Poudel ，

Excellent book。 I didn't know much about Soros and his line of thinking。 My perception was coloured by characterization in media。 I wouldn't have read this book if I hadn't find NNT talking highly of Soros （Trading， thinking） in one of his old interviews。Overall the book is great。 I will meditate deeper on reflexvity。 Excellent book。 I didn't know much about Soros and his line of thinking。 My perception was coloured by characterization in media。 I wouldn't have read this book if I hadn't find NNT talking highly of Soros （Trading， thinking） in one of his old interviews。Overall the book is great。 I will meditate deeper on reflexvity。 。。。more

Sangam Agarwal ，

Reading this book is like time travel， trading with george soros back in time。

Mike Roberts ，

I think this was a very interesting book。。but I must say it was tough to understand in parts

Sotiris Makrygiannis ，

Ok this is a book， synopsis， of the early life work of Soros。 How he was the one eye king in the kingdom of the blind related to European stocks。 Then he moves to explain his theory （？） related to market reflexes and market biases。 To end up telling us that he thinks that he is the King and that the human system needs to be modified by what the majority believes and not from an organized system。 Rather anarchistic that was so that leaves me with the question why then he invests in social project Ok this is a book， synopsis， of the early life work of Soros。 How he was the one eye king in the kingdom of the blind related to European stocks。 Then he moves to explain his theory （？） related to market reflexes and market biases。 To end up telling us that he thinks that he is the King and that the human system needs to be modified by what the majority believes and not from an organized system。 Rather anarchistic that was so that leaves me with the question why then he invests in social projects to promote his worldviews？ Anyway， I liked the starting comments about quantum theory and I subscribe to his view that the observation is affecting the outcome。 。。。more

Ethan Lambert ，

Dense but good

Mike ，

Concise thesis that the basic concepts on market supply and demand I was taught in MBA and CFA programs is so significantly flawed by assumptions of independence and inertness as to heavily question the model's value。 Since that is the basis for most economic theory its a pretty big challenge。 Since over a long career， Soros was able to trade on his theory and consistently out perform the market， it obviously should be considered。Take always:1。 Market trends are long and wave form。 2。 Collapses Concise thesis that the basic concepts on market supply and demand I was taught in MBA and CFA programs is so significantly flawed by assumptions of independence and inertness as to heavily question the model's value。 Since that is the basis for most economic theory its a pretty big challenge。 Since over a long career， Soros was able to trade on his theory and consistently out perform the market， it obviously should be considered。Take always:1。 Market trends are long and wave form。 2。 Collapses are often avoided by the nature of predicting their appearance and the market adjusting。3。 Collapses usually happen due to unexpected events。4。 Trends either direction are self reinforcing， and thus will continue past the point of rationality。5。 Because of 4， being contrarian is inherently a losing bet unless you can time inflection points， which is very very difficult。6。 The key point is a concept of reflexivity where the market trend affects the underlying value， which affects the trend， usually in a positive way， which affects the value， and so on。 This continues until the trend is far out of whack with fundamentals which will cause a sharp correction and start of a new trend line， often in the opposite direction。 。。。more

Dave B。 ，

Go for the jugular Bubbles can affect the fundamentalsDont under estimate the power of a bubbleDefinitely worth a read。 Read over 10/15 years ago but these points are fresh in my mind still。

Zeqiong Huang ，

Fantastic insight。

Batsuld Bazarragchaa ，

- Brilliant mind of George。

Nathan ，

The Alchemy of Finance helps establish a modal of thought for the market and economy。 It debunks the myth of efficient market theory where everything is ‘priced properly。’ Instead it posits how humans are not rational actors in a system。 This inherently leads to a dynamic adjustment （volatility） in an illogical way。 Trends will favour prevailing biases of the time。 This can in part lead to speculative bubbles。 The longer these bias trends go on for， the longer the boom。 At inflection points thes The Alchemy of Finance helps establish a modal of thought for the market and economy。 It debunks the myth of efficient market theory where everything is ‘priced properly。’ Instead it posits how humans are not rational actors in a system。 This inherently leads to a dynamic adjustment （volatility） in an illogical way。 Trends will favour prevailing biases of the time。 This can in part lead to speculative bubbles。 The longer these bias trends go on for， the longer the boom。 At inflection points these trends reverse and create busts。 These inflection points can be determined by a credit cycle。 Low interest rates （which allows people to easily borrow money creates an acceleration of buying）。 Then when insolvency hits an increasing of interest rates lower buying which then pops these bubbles of prevailing bias。 That being said I disagree with his dissent from a contrarian and fundamental approach applied by Benjamin Graham， Warren Buffett， and Carl Icahn。 It is a simpler way to understand values in the economy。 In a context of investing， you want to buy assets that have a lower market value than intrinsic value （working capital， book value， equity and assets）， and to also factor in growth。 This will give you a valuation of a business which is either higher than the market price or lower。 Regardless of the prevailing biases these businesses will always have to revert to the mean in due time。 Through this modal you can understand inflection points of any business at any time in the economic cycle。 I would recommend reading The Intelligent Investor preceding and then The Alchemy of Finance。 One can garner a lot from this book and get into the mindset of a great investor！ 。。。more

Helfren Filex ，

A book by George Soros。 I was intrigued of what kind of book will he write in portrayal of himself。 When the book opened by the line- Market is a reflection of the thoughts on the bias of the future， I thought， it was going to be a decent book。 There is a lot of stock market lesson here。

Jimmy ，

The idea of reflexivity is interesting， but far from revolutionary and it's not all correct。 Just read the first chapter and I think it's enough。 The idea of reflexivity is interesting， but far from revolutionary and it's not all correct。 Just read the first chapter and I think it's enough。 。。。more

Mustafa Abdullayev ，

It is the first time that I did not finish the book I started。 Actually， I tried to read this book but left it at 10%。 The reason is that I did not like the style and content。 It is heavily economical （I expected a modest amount of economics and little bit of physiology in the markets）。 Also， Mr。 Soros talks about his fund。 Also， his theories are not the tools that I can apply to the real world。 Maybe， my economic knowledge inhibited my ability to gain valuable insights from this book。 I will tr It is the first time that I did not finish the book I started。 Actually， I tried to read this book but left it at 10%。 The reason is that I did not like the style and content。 It is heavily economical （I expected a modest amount of economics and little bit of physiology in the markets）。 Also， Mr。 Soros talks about his fund。 Also， his theories are not the tools that I can apply to the real world。 Maybe， my economic knowledge inhibited my ability to gain valuable insights from this book。 I will try to read this book again in the future for sure。 I believe， the content of this book is a great resource。 。。。more

Conrad ，

George's physical connection with the market is fascinating。 This is not a practical guide but he discusses his abstract and practical hypotheses。 He was able to test a lot of his theories throughout his life。 The people who recognize the trend are the winners。 Short term volatility increases at the end of the long term trend。 There are underlying trends whether the participants realize it or not。 Reflexivity theory gets discussed。 George's physical connection with the market is fascinating。 This is not a practical guide but he discusses his abstract and practical hypotheses。 He was able to test a lot of his theories throughout his life。 The people who recognize the trend are the winners。 Short term volatility increases at the end of the long term trend。 There are underlying trends whether the participants realize it or not。 Reflexivity theory gets discussed。 。。。more

Geoff Steele ，

discusses how market participants end up affecting the prices， economies， trends， boom & busts， or in other words the market itself。 Much like perception is reality。。。but in this case， perception really does affect asset prices， loan valuations， collateral， currency exchange rates。 etc。 and thus the market is reflexive to these activities。 Interesting stuff， kinda like quantum physics in that the act of observing affects the object observed。

Javier ，

Not too bad。 Basically talking about the reflexive theory and how it can affect the different markets providing real examples based in his experience。Short book and a good read。I also recommend to listen it instead of reading it。

Samuel Atta-Amponsah ，

In 1986， George Soros wrote a very challenging book that outlined his approach to investment management – an approach that had provided investors in his Quantum Fund extraordinary returns over the 18 prior years。The book was challenging in two senses。 For one thing， it claimed that financial orthodoxy （as still taught） rests on false premises， and for another， it argued that the philosophical underpinnings of the success of the scientific method could be used to illuminate “historical processes， In 1986， George Soros wrote a very challenging book that outlined his approach to investment management – an approach that had provided investors in his Quantum Fund extraordinary returns over the 18 prior years。The book was challenging in two senses。 For one thing， it claimed that financial orthodoxy （as still taught） rests on false premises， and for another， it argued that the philosophical underpinnings of the success of the scientific method could be used to illuminate “historical processes，” of which the financial markets are a minor subset。Soros continued to employ his approach very successfully as an investor for another 10 years before becoming a philanthropist and statesman。 “The Alchemy of Finance” is a difficult read， but deeply rewarding for those of a curious and skeptical mind。Economics and finance over the past 60 years has increasingly relied on analogy with hard sciences like physics。 Increasingly mathematical and predicated on the assumption that there is some underlying “truth” （like E=MC squared）， economists seek equilibrium and financial analysts seek value。 To Soros， both are wrong and irrelevant。Scientists know that their “truth” is provisional。 A good scientific theory will be used to make empirically verifiable predictions。 A theory can only be accepted as long as repeated attempts to falsify it fail to do so。 No economic or financial theory can be subjected to such rigorous testing， and therefore can embody nothing other than the “ritual and incantation” associated with alchemy。Matters get worse。 In developing his Theory of Reflexivity， Soros points to the role of the thinking participant。 Scientists take great care to design their experiments to eliminate any possibility that their involvement could in any way impact the empirical result。 Experimental purity of this order is impossible in finance， since economics and financial markets do not exist without decisions and action by thinking participants。 Imagine how the financial world would be different if central banker thought did not exist， or if all market participants chose to ignore it。 A corollary of Reflexivity is that self-reinforcing trends will not be unusual。 Soros identified two reflexive connections that seemed particularly important in the mid-1980s: the relationships between credit and collateral， and between the regulators and the regulated。 Twenty years later， the subprime mortgage crisis seems to attest to his foresight。What are we to do？ Or rather， what does Soros do？ If our cherished concepts of Equilibrium and Value have no use or relevance， and self-reinforcing trends occur often， we can only attempt to understand economics and markets as “historical processes，” the drivers of which will be the actions of thinking participants。 Part three of the book exposes his real-time thought process。 Soros consistently develops empirically verifiable predictions of how the process will develop， and always has a plan of action to respond appropriately。 It is jarring to realize that he makes no claim to forecasting prowess – only a deep commitment to understanding the historical process。Central bankers should take note。 。。。more

Corey Thompson ，

I think it's a solid novel for finance and touches on principles for making money。 It does give a different perspective but nothing you can't find in today's internet era。 I think it's a solid novel for finance and touches on principles for making money。 It does give a different perspective but nothing you can't find in today's internet era。 。。。more

Weixiang ，

A surprisingly humanities induced financial discussion on how the market isn’t just an isolating force rather a orderly chaotic force。 It’s constantly interactive like a rhizome。 What I’m trying to say is， the market is more psychology and humanistic rather than a science and predictable。Yeah。。。。 good abstractions， but at the end of the day， use your good psychological calm judgements on the market。

Reference

google book https://www.google.com/search?tbm=bks&q=The Alchemy of Finance

hathitrust digital library https://babel.hathitrust.org/cgi/ls?q1=The Alchemy of Finance&field1=ocr&a=srchls&ft=ft&lmt=ft

The British Library https://bll01.primo.exlibrisgroup.com/discovery/search?query=any,contains,The Alchemy of Finance&tab=LibraryCatalog&search_scope=Not_BL_Suppress&vid=44BL_INST:BLL01&lang=en&offset=0