George Soros And The Human Uncertainty Principle

The division between academic economics and the way traders look at the market is deep. The efficient market hypothesis assumes that markets and valuations are always pushing towards an equilibrium, and evidence to the contrary gets pushed aside as fluctuations or statistical deviations. But the dot com bubble, the 2008 financial crisis, and other boom-bust cycles before them make this assumption hard to believe, and the world’s most successful traders clearly don’t behave as if the market is a rational machine tending toward truth. Still, the division between theory and practice is so fundamental,...