Alchemy

Soros kept his teacher's argument that we cannot know anything for certain, and drew from it the opposite conclusion about what to do on a Monday morning.

A course on the thought of George Soros.

Philosophy · Finance

What you will learn

  • State the charge that Soros retrofitted his theory to his success.
  • Describe what the 1970 note claimed about real estate investment trusts.
  • Explain why paying in both directions is stronger evidence than paying once.
  • Reconstruct the argument from fallibility to speed, step by step.
  • Explain why an idea that looks good on a quick look is itself treated as evidence.
  • Identify the ambition he names, and connect it to what he read as a student.
  • Distinguish working to be right from working to find out you are wrong.
  • Explain why the second can be an advantage in a market and not merely a virtue.

Course outline

  1. The Note — The standing charge against him is that the philosophy is decoration bolted onto the money afterwards. There is a dated document that settles half of it, and does not touch the other half.
  2. Invest First, Investigate Later — Popper's argument is that we cannot know. Nearly everyone who accepts it becomes more careful. Follow the reasoning by which one man became faster instead — and hear him say out loud what he wanted…
  3. Being Wrong Fast — Two men in one office with incompatible relationships to error — and a body that reported the bad news before its owner could say what it was.
  4. The One Place a Prediction Costs Something — He named a single point on which he departed from his teacher, and it is the point the second course set up. The argument he makes for it is better than its reputation.
  5. The Experiment That Publishes Its Own Failure — He ran a forecasting diary in real time, printed it with the outcomes, and left in the parts where he was wrong. Then the hard question: what does a mixed result prove about a theory that predicts…
  6. 1957 — A paragraph, handed over without a date, about a prediction that causes the event it predicts — illustrated with a share price. Then the date. Then the part that is harder than plagiarism.

Works read in this course

  • The Alchemy of Finance — Soros's 1987 book setting out reflexivity and containing the real-time experiment that tests it.
  • The Poverty of Historicism — Popper's 1957 argument against the claim that history has laws permitting prediction — and the book in which the Oedipus effect is named.
  • The Open Society and Its Enemies — Popper's 1945 attack on the intellectual sources of totalitarianism; the book that started all of this in Course II.

Built from

This course was built from 4 books.

  • Michael T. Kaufman, Soros: The Life and Times of a Messianic Billionaire
  • George Soros, The Alchemy of Finance
  • Sebastian Mallaby, More Money Than God
  • Karl Popper, The Poverty of Historicism

Terms introduced

reflexivity, the boom-bust sequence, fallibility, the unity of method, the real-time experiment, the Oedipus effect

Part of the Simposeum course library.