Wednesday, August 26, 2009

What Does Soros Think?

Market Folly published a nice summary today of George Soros' hedge fund holdings.

This review by C. Kurdas on Soros' book The Alchemy of Finance will save you the trouble of reading the book. The book simply describes basic well known market psychology theory including a round-about way of describing the prevalence of existential belief in the minds of market participants. We like to summarize that with the catch-phrase, "You don't know Jack!"

If you want to be a successful, adaptable, 'reflexive' trader or investor, we recommend instead two books more directly addressing the issue of psychology listed below. As Mark Douglas pointed out in his book (the first one below) to a bond day trader whom he was advising, don't presume the other poor schmuck making a trade has better insights into the future than you. Stick to your strategy!

For adaptation to information as the market delivers it, we recommend reading John Hussman every week. Hussman is not a teacher, but his weekly commentaries to clients help you learn how professionals absorb data and apply it to reality, rather than trying to impose one's feeble world view onto the market.

Top Recommendations:
The Disciplined Trader: Developing Winning Attitudes
Trading for a Living: Psychology, Trading Tactics, Money Management

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