The Alchemy of Finance 2007 or Later Printingth Edition
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“…these updated classics are packed with investment wisdom…” (What Investment, November 2003)
From the Inside Flap
"An honest struggle by an independent and searching mind to break through an old and stale orthodoxy with new and meaningful insights into financial and human behavior" Paul A. Volcker
"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 Director, BKF Capital Group, Inc.
- Item Weight : 1.68 pounds
- Paperback : 391 pages
- ISBN-10 : 0471445495
- ISBN-13 : 978-0471445494
- Publisher : Wiley; 2007 or Later Printingth Edition (June 15, 2015)
- Product Dimensions : 6 x 1.2 x 8.9 inches
- Language: : English
- Best Sellers Rank: #25,836 in Books (See Top 100 in Books)
- Customer Reviews:
Top reviews from the United States
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I was very wrong. The editors completely skipped the New Introduction, which is a key part of the narrative. They also appear to have cut out the vast bulk of the book's text -- 370 pages got condensed into 2.5 hours of narration!
I started listening to the Audible version, Chapter 1, holding the paperback in my hands and trying to match up the spoken and written versions. I couldn't find where the narrator was reading from! For my needs, the Audible Abridged version was a complete waste of time.
I called Amazon / Audible to complain. The rep was very helpful, and refunded my purchase as I requested. He explained that most titles are in fact offered in Unabridged versions, and "The Alchemy of Finance" is an exception to this rule. Caveat emptor.
I would recommend to anyone who wanted to peer inside the Palindromes mind to go and first read "Soros on Soros" which is a kind of brief overview of the ideas offered in this book but done in an interview style so the writing is much more cogent and readable. But, once you have finished that I would definitely recommend reading "Alchemy..." The ideas and information offered inside are powerful and game changing to those who can understand them- which certainly doesn't take a PHD, just an open mind and bit of thought.
In fact, it was after reading this book that the young Stanley Drunkenmiller sought out George Soros and asked to work with him, and Paul Tudor Jones, made it a requirement to read and understand this book before joining his fund. If that is not enough of a referral then I don't know what is. Read this book, take notes, and internalize the lessons and ideas inside and you will much better off for it.
Soros spends a good part of the book proposing measures to stabilize the world's economy and also makes predictions, some of them which turned out to be far different than actual developments. His goal is to seek and find profitable returns and not an objective truth, which is partly why his approach belongs to alchemy and not finance - and that works well with reflexivity principles too.
Other than his fundamental points (boom/bust cycle, reflexivity in markets, inherent bad volatility in free markets) I really enjoyed his "real time experiment", depicting his major trading decisions in his Quantum Fund, as I was looking forward to understanding a little bit better how a hedge fund works.
As others have said, I find his writing quite cloudy and difficult to follow but I'm glad I read it anyhow. I was able to take some valuable notes.
Obviously Ben Graham's "Intelligent Investor" serves as contrast to this confused Soros.
It's an important framework in thinking about oil and gas prices too.
Top reviews from other countries
A great read for someone who is navigating the macroeconomic aspect of world economics.
It is massively complex in the ideas presented, necessarily so. I did find my self re-reading certain pages, sections two or three times to get my head around the points he was trying to make. Having said that, I think that the ideas were as simplified and accessible as they could get, whilst retaining the points the author was trying to put across.
George Soros is essentially presenting an opposite theory of how markets work to that of Scholes et al. As Soros's fund is a practical application of his theories, the successes of that may be equated with the value of what he says. However, Soros is pushing a theory that markets are unpredictable and irrational and that models are a straw man ... really saying his speculation is largely an exploitation of that knowledge.
The opposing view (from around the same time) was being implemented practically by Scholes, Meriweather and others in LTCM (See "When Genius Failed"). To see how both sides where successfully exploiting more naive market participants see "All that Glitters".
After the dramatic failure of LTCM, more sway was given to Soros' point of view, largely as his successful fund had been battered but survived more or less in tact. Some time in more recent history that fund also took a big kicking. Bizarrely this does give some more credence to to the theory Soros puts forward .... he is saying that one makes money in markets by being maverick and ignoring popular theory, so once people started copying him it is time to change the game plan or face the consequences!
All in all a very interesting thesis, especially to anyone with any knowledge of the man or the markets. Although it is economic theory and market psychology, etc, it is written more as manifesto and so engaging and accessible.
Not for the newcomer though, it would probably pay to have read a bit about trading, derivatives etc before attempting this one.