The Alchemy of Finance: Reading the Mind of the Market

"The Alchemy joins Reminiscences of a Stock Operator as a timeless instructional guide of the marketplace." — Paul Tudor Jones from the Foreword

"An extraordinary . . . inside look into the decision-making process of the most successful money manager of our time. Fantastic."— The Wall Street Journal

"A breathtakingly brilliant book. Soros is one of the core of masters . . . who can actually begin to digest the astonishing complexity . . . of the game of finance in recent years."— Esquire

"A seminal investment book . . . it should be read, underlined, and thought about page-by-page, concept-by-idea. . . . He's the best pure investor ever . . . probably the finest analyst of the world in our time." — Barton M. Biggs, Morgan Stanley

George Soros is unquestionably the most powerful and profitable investor in the world today. Dubbed by BusinessWeek as "The Man Who Moves Markets," Soros has made a billion dollars going up against the British pound. Soros is not merely a man of finance, but a thinker to reckon with as well. Now, in The Alchemy of Finance, this extraordinary man reveals the investment strategies that have made him "a superstar among money managers" (The New York Times).

To those who know little about him Popper in 1934 started a new era in the philosophy of science with a book written in German, and translated in 1959 under the title "The Logic of Scientific Discovery". He rejected the traditional idea that scientific knowledge was based on a method called induction whereby theories are verified by observations. Popper argued that the logical process of induction simply does not exist. Theories are forever tentative and the most useful function (and the only logically decisive effect) of observations is to act as tests or attempted falsifications of theories.

It is application of this theory to stock markets that is of extreme relevance for a trader. "Stock markets are places where different propositions are tested" are the nine most important words ever written about stock markets. Once we can see the mistake that the market is making in coming to general conclusions from specific events then making money is easy as a trader.

I think this philosophy of Knowledge reconciles his poor capability to predict events which is always based on some generalizations with his stock market success as well as his ability to see the flaws in general in a generalization that the market has accepted.


If you understand reflexive Systems, you will love this book   September 24, 1998
5 out of 6 found this review helpful

I studied System Dynamics and this book makes so mcuh sense when read from SD perspective. Systems can be reflexive and self enforcing. Soros simply discovered its relevance in world financial systems and successfully exploited it. I think he is a genius here.


Can you read between the lines?   May 22, 2008
K. Jimmerson
1 out of 1 found this review helpful



Have read a lot of reviews about this book. Some complain that it rambles on. It does, and thats what I liked so much about it. Like Mr. Soros's explanation of reflexivity you really have to contemplate this book with "reflexivity". In other words, if you come to this tome thinking you are going to learn some of his billionaire secrets, forget about it. He is too smart for that. He is not going to spell it out for you. Hoewever if you can read between the lines and learn by doing so, then that is where your free education from Mr.Soros appears. A lot can be learned from words and patterns of speech, and to hear his perceptions of life and market conditions, one can walk away with valuable info about how to time the market and life correctly.

Wanted to listen to this book since hearing Mr O'Reilly (with whom I respect) harp about Soros so much nightly. If nothing else just want to hear the "fair and balanced" sake of the dispute.

If you like listening to things that are somewhat abstract, I recommend this book. If your trying to get detailed info about how Mr. Soros made billions in hopes of repeating his success, start by studying Finance and Economics at your local community college.

His words are like a beautiful Operatic Aria. His Political schemes a perk of success. And, you have to admire his freedom to do that.

"That which does not destroy us, only makes us stronger.




Classic Soros market reflections   October 30, 2008
Rolf Dobelli (Switzerland)
1 out of 1 found this review helpful

This is a remarkable book by a remarkable man. Billionaire George Soros is one of the most notorious, successful speculators of the 20th century and one of the most freehanded philanthropists. Here he outlines a theory that leads to the conclusion that markets are not morally good, that the financial system is rigged to protect the interests of the rich and powerful, and that economics is a spurious science. Much can be said in criticism of this book. It is replete with logical fallacies, muddies the arguments of those with whom the author disagrees, sets up straw men, and does not take adequate account of work done by philosophers and psychologists in some of the areas the author explores. But, getAbstract finds that there is also a great deal of good that can be said. Soros is an original thinker, at his best when he is talking about his own direct experience. He is straightforward about how his ideas have changed, and about his trading and forecasting errors. And why shouldn't he be, when, as he says, his errors are the keys to his success?