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The Alchemy of Finance

3.73  ·  Rating details ·  3,181 ratings  ·  180 reviews
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 Investmentstrategie
Paperback, 416 pages
Published June 15th 2015 by Wiley (first published 1987)
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Average rating 3.73  · 
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 ·  3,181 ratings  ·  180 reviews

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Let's not skirt around the issue here- this book loses about a bajillion points* for having a man in a suit with his arms folded on its cover.
The Alchemy of Finance George Soros
What does having your arms folded on the cover of your book say?
Typically one of two things:
1. "I'm taking back my America one book at a time!"; or (and this one is more common)
2. ADVICE!! "I am about to give you lots and lots of advice that will solve all of your problems and/or make you rich and/or force you to acknowledge that you'll never
Riku Sayuj
Dec 04, 2012 rated it really liked it
Finally an expert who admits that he is shooting in the dark, mostly.
Stirling Mortlock
Apr 04, 2013 rated it it was amazing
This is a book I read and re-read on a regular basis.
Soros has the greatest track record of any money manager, ever. This should give anyone who is interested in managing money, or managing their own money, a reason to read the book in which he describes exactly how he has made his billions.
It surprises me how many people have read the book, and yet, so few put the actual theoretical framework to use. Despite Soros's introduction of the ideas of reflexivity in financial markets nearly 30 years
Ben Sutter
Feb 11, 2016 rated it did not like it
I slogged my way through the first 200 pages of this...but enough is enough.

What I learnt is:

1) George Soros took high risk, leveraged positions. He became very rich. He may well have been skillful. He might have just been lucky. The Alchemy of Finance has not assisted me in determining which is more probable.

2) If he was skillful at making money, he certainly isn't skillful at communicating his methods and strategy. This writing style is muddy, convoluted and the majority of the content is sp
Amir Dov
May 08, 2016 rated it liked it
The Alchemy of Finance provides a peek to the mind and thinking process of who is probably the most successful market speculator in history.

The book can be generally divided to two themes (although with no particular order, as the chapters are kind of mixed):

The first theme is Soros' concept of reflexivity - which includes the explanation of what's wrong with the current academic conception of economics / finance as a social science, and some theoretical background to his own perspective which
Nov 30, 2020 added it
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 ...more
May 16, 2015 rated it it was amazing
It is a rare thing indeed that someone who has had extraordinary success in a field takes the time to set out how he views his field and the main drivers behind his success, even rarer in financial markets. And yet here is this rare gem of a book, available to all who can be bothered to read it.

This is not a get-rich-quick book, nor a step-by-step guide to Soros's decision making process. This is a book for those involved in financial markets, particularly those with a philosophical leaning. A
Sep 30, 2017 rated it liked it
One of the greatest traders and greatest minds of our lifetime. It doesn't get a higher rating because the communication of his ideas of social science/philosophy/principal of reflexivity etc are a little hard to follow at times. I would say that was just me but almost everyone I know who has bought this book hasn't finished it. ...more
George Jankovic
May 07, 2016 rated it it was amazing
A book by one of the 2-3 greatest investors of all time. It's about his reflexivity theory: stock prices are influenced by the economy then they, in turn, influence the real economy. And how all that applies to investing. ...more
Trung Nguyen Dang
Feb 21, 2018 rated it liked it
An one idea book: Reflexivity, the circular relationships between cause and effect that feed momentum. Simplistically speaking, it just means momentum will feed itself until it becomes very extreme then it will reverse to the other extreme.
Jan 21, 2016 rated it it was amazing
Short review: Hard work, but deep. A better title would be "The Alchemy of How Everything Works".

Long review:
Nominally, “The Alchemy of Finance” is about understanding markets and making better investing decisions. If that is all one learned it would be a crying shame, because the book is actually about understanding reality and making better decisions. To restrict it to the markets is a serious mistake and not one Soros makes.

One of the most important steps to understanding reality is understan
Andreas Lorenz
Aug 12, 2018 rated it it was amazing
The most important concept in this book is "reflexesivity" - a novel concept in economics according to GS. It is basically a merger of the in "second order chaos theory" and that the "arrows of causation" runs both ways in any system. This means that the idea of equilibrium is an abstract/deduction with very little real word consequences in most financial markets.

This is highly recomendable as it basically says that all our standard models of economics are - if not wrong - then without much rea
Gabriel Pinkus
This book, much like John Burr Williams' Theory of Investment Value could be shortened immensely for the big idea one ought to take away - The Theory of Reflexivity

Soros' Theory of Reflexivity is a rational explanation of why economics is so terrible (read: absolutely awful) predictor of the future, and why social sciences as a whole tend to fall so short of natural sciences. Economists tend to get "physics envy". When you have thinking participants, results change. In physics, gravity pulls you
Dec 06, 2014 rated it liked it
Shelves: self-improvement
Dry, and far more nonlinear than expected. Prepare yourself to repeat sentences; Soros writes like an academic, and even alludes to this once. The one concept he hammers in more than any other : markets do & will fluctuate.

Some rare brass tacks :

"I react to events in the marketplace as an animal reacts to events in the jungle... for instance I used to be able to anticipate an impending disaster because it manifested itself in the form of a backache."

"If we want to
Matt Kelty
Dec 30, 2012 rated it it was ok
A very smart, successful man is now a billionaire, but in his heart would rather be a philosophy professor. He realizes, along with many other people, that feedback loops exist in financial markets. He calls said feedback loops "reflexivity" and writes 200 pages. It's actually kind of fun to read, but there isn't much meat beyond this one concept. If he was able to make his fortune solely through an edge based on identifying feedback loops, there is a better book to be written eventually. ...more
Mar 20, 2016 rated it really liked it
Heisenberg's principle is that mass and velocity of quant particle can not be measured at the same time because the act of measuring affects the object being measred.
Are those methods appliable for natural and social criteria, too?
Jan 30, 2015 rated it liked it
Interested read. Found myself agreeing to the concept of changing equilibrium and two way causality (reflexiveness) but also disagreeing with some of his views.
Dec 28, 2020 rated it it was amazing
Shelves: cfa
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
Sep 30, 2020 rated it it was ok  ·  review of another edition
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.
Stefan Bruun
Jun 28, 2019 rated it really liked it
A dynamic alternative to the classical models of macro economics. It is clear that the dynamic/reflexive model is of more relevance to investors than the classical static ones. A lot of overlaps with Soros on Soros, though both more practical and more philosophical.
Feb 09, 2019 rated it really liked it
Shelves: history, investing
The idea of reflexivity is interesting, can be widely applied to many social/economic activities. The normality of the market is not stability, but from one extreme to another. I agree with it - reflexivity drives sentiment, stock prices drive fundamentals too. Especially in fixed income, rising asset prices drive up value of collaterals, and therefore risk tolerance of banks, and more lending means better economic activities and more borrowing. The reverse is also true. This is why momentum wor ...more
U-ming Lee
Dec 01, 2012 rated it really liked it
I read and listened to this book multiple times. This is, at various times, a personal reflection of the author's life, philosophical ruminations and accounts of some of the investment activities that Soros had been engaged in throughout his life.

The central idea of the book is Soros' theory of reflexivity. Soros spends some time excoriating the "efficient markets" advocates that have proliferated in academic finance. The premise that markets know best and that securities prices reflect all curr
D.H. Bernhardt
May 18, 2019 rated it really liked it
Politically minded people have strong opinions about Soros. I dont know much about what his political motivations or convictions are, but I figured the guy has to know a thing or two about finance (being a multi-billionaire and all). Soros, an extremely successful hedge fund manager, is also referenced frequently in Nassim Taleb's eloquently expressed notions of optionality in Taleb's Incerto trilogy. I love Taleb and his interest in Soros's operational methods put me on the watch for more infor ...more
Travis Steward
Jan 16, 2016 rated it it was amazing
This is a deeply philosophical book that has not only dramatically affected the methods I use to invest, but how I look at science and any results based discipline.

I think Soros is a total iconoclastic genius, but feel he does suffer some convolution of ideas. He's exactly right in naming this book the way he did. Frankly, I didn't find the "theory of reflexivity" that compelling. It was so many other areas of the book I found intriguing: 1. that the stock market is a feedback mechanism that te
Antonio Kowatsch
Mar 26, 2017 rated it really liked it
A very interesting book about George Soros' theory of reflexivity. Disclaimer: the book is aimed towards people who have an intermediate/advanced understanding of the financial market and how market conditions are evaluated.

What I really liked about the book was that George Soros has written it in a very self-conscious way. It added a great deal of honesty and made it a very good read in my opinion. I definitely learned something from the book. His theory of reflexivity is amazing and quite cou
Lee Spano
Oct 20, 2014 rated it it was amazing
Book Review: Soros George ‘The Alchemy of Finance’ (2003)

This is quite a ground-breaking book. In this work, George Soros explains in detail his theory of Reflexivity and its application to the financial markets. He also gives important insights into his decision-making.

Reflexivity theory is to be contrasted with traditional Equilibrium theory in Economics. I have given an overview of this theoretical debate recently, and so will not repeat it here.

Soros applies Reflexivity theory to several h
Sep 03, 2013 rated it did not like it
WOAH! am sorry but this book is WAY over my head

No doubt it must click for others with its glowing references and reviews ...but for me, unfortunately..i had to give it 1 star, i find books by harvey dent, robert kiyosaki and so on a much easier and more human like conversation to explain this area of finance

...but for hardcore fans and in depth researchers and fllowers of the topic, this seemingly does seem the next level, but i cant keep up nor grasp the style its written or honestly how one
Rick Wilson
Feb 05, 2019 rated it really liked it
Shelves: finance, business
Fascinating view into the mind of George Soros. I’m probably overly deferential because of his track record.

Focus on psychology, information, and how irrational behavior impacts macroeconomic trends. Definitely a contrarian to his core.

Reflexivity is an interesting concept. Homeostasis is never reached in a market. Biases and narratives around an asset will weight how that asset moves. Positive and negative biases will lead to over reactions when in alignment with an asset price movement. And
Mar 19, 2014 rated it liked it
The original masterpiece - original (and first) in Soros' discussing his theory on Reflexivity. Over the years, he's repeated his theory over and over and over...and over, and over again as primers, intros etc. -- which is beyond absurdity and pointless. But, yes this'd be the original masterpiece for what it's worth. Herd behavior, Irrational Exuberance (by Shiller) among other topics and authors have presented similar views -- but no one to my knowledge has attempted to milk the same cow as ma ...more
Ryan Nunley
Aug 01, 2015 rated it really liked it
George Soros uses his technical knowledge to portray his abilities to use the boom-bust cycle of succeeding in the markets. He argues in opposition of the 'Random Walk Theory' but acknowledges at times where he felt such a walk in the markets. Soros doesn't lay out his trading strategies but reveals the general principles that led him in his strategies and history of how he achieved business success. ...more
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George Soros is a Hungarian-American financier, businessman and notable philanthropist focused on supporting liberal ideals and causes. He became known as "the Man Who Broke the Bank of England" after he made a reported $1 billion during the 1992 Black Wednesday UK currency crises. Soros correctly speculated that the British government would have to devalue the pound sterling.

Soros is Chairman of

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Happy Women's History Month! One of the undisputedly good things about modern scholarship is that women’s history is finally getting its due....
73 likes · 11 comments
“The fact that a thesis is flawed does not mean that we should not invest in it as long as other people believe in it and there is a large group of people left to be convinced. The point was made by John Maynard Keynes when he compared the stock market to a beauty contest where the winner is not the most beautiful contestant but the one whom the greatest number of people consider beautiful. Where I have something significant to add is in pointing out that it pays to look for the flaws; if we find them, we are ahead of the game because we can limit our losses when the market also discovers what we already know. It is when we are unaware of what could go wrong that we have to worry.” 12 likes
“Scientific method seeks to understand things as they are, while alchemy seeks to bring about a desired state of affairs. To put it another way, the primary objective of science is truth, - that of alchemy, operational success.” 10 likes
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