The alchemy of finance

What Hacker News says

1. callamdelaneyFeb 2021
   There is a lot of talk about investments / trading on this thread so I thought I'd drop some of my thoughts and experiences here.

   1) You can be right and still lose significant amounts of money. I've lost many thousands myself on something that I was eventually right about, timing is key - and it doesn't do to dwell on any decision - whether because you lost or could have made more. Sure, if I'd just invested my pocket money in bitcoin when I first mined it in 2012 I'd be retired already - but I didn't - shit happens.

   2) If you are attaching emotion to your positions you're doing it wrong. This 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 - what actually is and what people think is or will be; usually the latter is much more powerful in terms of short term positions. One of Soros's points is that the two interact and influence the other eventually.

   Show morethread
2. nabla9Mar 2020
   For learning I strongly recommend against almost all books mentioned in this thread. They don't really teach how financial systems work in the society or the underlying principles. They give you just a viewpoint. Some of them are good read after you know the basics.

   You need to pick up real college textbook (or online course) and read the parts that interest you and skim other parts. Example: Introduction to Finance: Markets, Investments, and Financial Management by Melicher and Norton

   You can also pick up introductory undergraduate college textbook in economics and read the parts that interest you. Greg Mankiw's books are good but the price is off the charts, so maybe don't buy them. (Macroeconomics & Financial Systems could be cheap if 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)

   Show morethread
3. FiberBundleMar 2020
   Take a look at the Economics & Finance videos on Khan Academy [1]. I have only watched some of them, but those I watched were good.

   You could read some standard macroeconomics textbooks, but I'd advise against doing that, since they are expensive and unnecessarily formalized using elementary math, which doesn't really add anything to the material itself. There's however a good book on monetary economics by Mishkin called Economics of Money, Banking and Financial Markets, which is really good, but the Khan Academy videos on banking mostly cover the same material.

   Personally I've learned a lot from reading economic 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 grasp for a beginner)

   Some other good book I can recommend (not history books) are: The Secrets of Economic Indicators: Hidden Clues to Future Economic Trends and Investment Opportunities by Baumohl

   Inside the House of Money by Drobny (mostly about global macro trading, but you would learn a lot about economics along the way, would only recommend this after having built up some basic knowledge though)

   Most importantly you should start reading the Economist, which has really high quality economics and finance articles, but is released only weekly and offers a good trade off with regards to time commitment and knowledge about what's going on in the world. Note that you will probably need to know some basics in order to understand everything, but you can look up things along the way. Economics really isn't hard to learn if you have a technical background.

   [1] https://www.youtube.com/user/khanacademy/playlists?view=50&s...

   Show morethread
4. simula67Sep 2019
   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

   [2] https://www.amazon.com/Alchemy-Finance-George-Soros/dp/81265...

   thread
5. nstjFeb 2019
   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 equilibrium is a complete farce, is not supported by the evidence, and has no relevance to the way markets operate.

   A good way to determine the conviction of economists (especially academic ones) with respect to any theory of equilibrium which they may have is to ask them if they have risked personal capital in situations to prove their theories (ie: if equilibrium is real, then why wouldn't you bet on it). The answer tends not to be yes.

   [0]: https://www.amazon.com/Alchemy-Finance-George-Soros/dp/04714...

   Show morethread
6. vpribishSep 2017
   Goedel, Escher, Bach -- If you're reading this page you will dig this book.

   Guns, Germs, and Steel -- how circumstance drove civilizations. Fun storytelling even if it's a bit too "just-so". definitely trains you 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 to change how you look at the history of technology, government, power, the saudis, and geopolitics.

   Show morethread