Alchemy

 

Re-reading Soros' Alchemy understood (at last!) his concept of reflexivity, which is no other than a self-reinforcing trend. The more it progresses, stronger it becomes. Or weaker. Simple. Understood also what he was doing under the term "speculation". He was a money trader, had in his head (and tried to express it through an arrow scheme) of interactions - say Japan has a growing foreign exchange deficit, then a devaluation of the yen may be around the corner. With 20 years experience in foreign currency markets, he was able to predict future rates and put a winning bet. No miracle, just a good mind and much experience. His success cannot be copied by me, because he is talking about the situation in 1970 - fifty years ago! Many try foreign currency speculation, like Fishman, and lose their shirts. In the case of Fishman, his Alliance tire factory.  BTW, in the last fifty years, much has been written about currency speculation, and the field is no more virgin, so to speak. Geriatrics like me, theoretically, prefer fresh, innocent markets and not much circulated dog-eared currency notes. All in theory, because in practice exited the playground a long time ago.