I didn’t read the Alchemy of Finance for the first time until sometime during 2003, and since it’s been one of my favorite books – perhaps my favorite in the entire finance/economics/inve… category.

The corollary of reflexivity that stuck with me the most was that:
Credit expansion leads to a contraction in value of the underlying collateral.

Sorros also made some interesting philosophical points – somewhat dialectic:
– Progressive society longs for the stability and relationships
– Conservative society long for the freedom and individualism
– Western society measures everything, and will therefore overvalue measurement itself
– The magic of the market can’t be separated from the madness of the market
– The very success of the Bretton Woods agreement sowed the seeds of it’s own disaster
– Freely floating exchange rates based on fiat currencies are not sustainable

Sorros isn’t god, but he’s smart and wise. As an investor, he’s been both more accurate and more brave then most of us. His recent work has much evidence of self-aggrandizement, but so did StarWars 1-3…

Whether or not “reflexivity” is an idea that has merit, good to remember that Howard Aiken said: “If your ideas are any good, you’ll have to ram them down people’s throats”

The Art of Profitability in itself isn’t an amazing book, but it’s the first book that I’ve read to reference other texts in so much detail – very much written as if you were taking a course. Like any text, there are many obvious portions, but if you complete the entire reading list then AofP is really a great book! Peter Sprung from CT has put together the complete reading list from the Art of Profitability… All of the books below are part of that reading list…

Does America Need a Foreign Policy?
By: Henry Kissinger

Michelangelo and the Pope’s Ceiling
By: Ross King

The Enlightened Despots (Unabridged)
By: Geoffrey Bruun

China Road: A Journey into the Future of a Rising Power (Unabridged)
By: Rob Gifford

I’ve already started listening to Kissinger’s foreign policy book and it’s an absolutely incredible read. If you’re interested in international relations and recent history, I think you’ll also find this one enlightening. I might put it up there with Legacy of Ashes, the history of the CIA, which was also an incredible read!

The Man Who Knew Infinity: A Life of the Genius Ramanujan (Unabridged) Audible
God’s Crucible: Islam and the Making of Europe, 570-1215 (Unabridged) Audible
The Peloponnesian War Volume 1 and Volume 2 (Unabridged)
Blood and Thunder: An Epic of the American West (Unabridged: 20 hrs) and (Abridged: 6 hrs)
A History of the Jews (Unabridged 28 hrs) Audible

Fiction:

The Paris Option: A Covert-One Novel (Unabridged) Audible
The Cassandra Compact (Unabridged) Audible
The Lay of the Land (Unabridged) Audible
The Crazyladies of Pearl Street (Unabridged) Audible
Killing Rain (Unabridged) Audible

21:Bringing Down the House and Rigged: The True Story of an Ivy League Kid Who Changed the World of Oil, from Wall Street to Dubai

These two should be commented on together because the style and stories are so similar. If you in the mood for a fast paced novel about a life that sounds exciting, then either of these might be fun. Author Ben Mezerk spins out a story that you should be able to find on MTV. In the case of “Rigged”, saying that building a oil futures exchanged in Dubai “changed the world of oil”, it seems a bit exaggerated, but I’m not in the oil business so I suppose it’s not really my place to comment otherwise… In both cases the stories are a lot of fun, but again, I think of these more as a novel written in the character of historical fiction (ie, parts may have been based on actual events). Don’t get your expectations out of control and you should have a good time

In the Ruins of Empire: The Japanese Surrender and the Battle for Postwar Asia

This was an excellent history of Asia from 1945-1950. If you’re interested in how military occupation works, in how systems operate, in how civil wars get started, in how arms get moved from one group to another, this is a great read! Thoroughly enjoyed this one! How did the Vietnam War get started anyway? And what about the Korean war? And why did we let Suharto get away with so much in Indonesia? Much of the current state of Asia is the result of “The Allies” unwinding the Japanese Empire in Asia. The Korean War, Vietnam War, Chinese Civil War, and Indonesian Independence from the Netherlands will all be quickly understood. Prior to reading this, I confess I wasn’t even aware that France tried to restore it’s colony in Vietnam after Japan’s surrender at the end of WWII. At least I’m slightly less ignorant then before I read this one… Highly recommended!

Liar’s Poker: Rising Through the Wreckage on Wall Street

This was a very wittily written story about greed on Wall Street during the ’80’s, and a bit about the training (hazing) process for new recruits. At least a few blank spots in your knowledge of modern finance will likely be filled in by a read through this one. Recommended! Enjoy