The alchemy of finance
by George Soros · first published 1987
70% recommend30% neutral
Why HN recommends it
Introduces reflexivity, the idea that market participants' views can change the outcomes they are judging, using a boom-bust framing; for investors and readers interested in market psychology.
Summarised by Claude from recommending comments
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…bought used) After that some light reading for general audience with interesting viewpoints and lessons: - A Random Walk Down Wall Street by Malkiel - Common Sense on Mutual Funds by John Bogle - The Alchemy of Finance by George Soros (Sorosls theory of reflexivity in finance, nontechnical take on nonlinear dynamics in the markets)
on “Ask HN: Book recommendations for understanding financial systems?” ↗Well worth reading on this topic is a book called "The Alchemy of Finance"[0] by one of the most successful investors in history, George Soros (successful like "made a billion dollars in a day" successful). Soros contends, and I tend to agree with him, that the concept of…
on “When does the concept of equilibrium work in economics?” ↗I think you are subscribing to a view called scientism[1]. If that is so, I would encourage you to read books like "Alchemy of Finance" by George Soros [2] which contains serious arguments against that position. You could also listen to David Wood or Edward Feser on YouTube if you are pressed for time. [1] https://en.m.wikipedia.org/wiki/Scientism…
on “Kosher Cell Phone” ↗I loved reading some of his books like Alchemy of Finance, and Soros on Soros. The ironic thing is he speaks a lot about reflexivity, where market's participants views on an outcome actually end up affecting that outcome itself.
on “Soros: "superbubble" that has been swelling for a quarter of a century is finally bursting” ↗…to look at any situation and seek it's origins with less initial judgement. The Visual Display of Quantitive Information -- gets at the essence of communication and medium. more than it seems! The Alchemy of Finance -- "reflexivity", but if you're also interested in Soros or some finance storytelling it's worth it. The Selfish Gene -- as everyone else has said. The Prize -- the history of oil. huh? yeah. Likely…
on “Ask HN: What books have made the biggest impact on your mental models?” ↗…history. Some books I can recommend are: Eichengreen - Globalizing Capital: A History of the International Monetary System Frieden - Global Capitalism: Its Fall and Rise in the Twentieth Century Soros - Alchemy of Finance (skip the first couple of chapters on his reflexivity theory, but the 'diary' chapters are a gold mine) Ferguson - The Ascent of Money (probably a good book to start, the others might be harder to completely…
on “Ask HN: What skills will be useful during an upcoming recession/depression?” ↗…is a huge point, not one I've personally mastered - which is why I don't play with stocks anymore. 3) The whole cycle of emotions surrounding markets is explained brilliantly by George Soros in 'The Alchemy of Finance'. This is an excellent read. It's interesting and illuminating that Soros was a student of Philosophy and not strictly mathematics or business. In my own experience there are two layers to markets -…
on “We live in an age of distractions, dealing with constant mental stimulus” ↗Then Apple wouldn't be Apple. This makes me think of the reflexivity idea Soros wrote about in Alchemy of Finance. It's valid to bemoan not buying Apple stock 20 years ago, because the purchase wouldn't influence company trajectory. Looking back wistfully at not buying the company completely changes the situation…
on “20 Years Ago Today, Sun Almost Bought Apple for $4B” ↗Yes, but let’s say you’re a George Soros fan and want to buy one of his audio books. So you do a search for “Alchemy of Finance audiobook” and the result you get is this [1]. Now here’s the kicker - it’s out of stock. WTF !?! [1] - https://www.barnesandnoble.com/w/the-alchemy-of-finance-geor...
on “Barnes & Noble Set To Be Sold To Elliott Management For About $683M” ↗…to the ego: those who have illusions about themselves have to pay a heavy price in the literal sense. It turns out that a passionate interest in the truth is a good quality for financial success. The Alchemy of Finance by George Soros
on “Where you can and cannot thrive on BS” ↗