Developing a philosophy for finance: George Soros’ philosophy of financial markets and stock options

Financial markets have always been a great interest of mine. Except, being a philosophy student, I was always more interested in learning about finance whilst applying philosophical rigor to the field. For many years, I yearned to synthesize my two interests—philosophy and finance—and struggled to find others who found a worthwhile link between the two fields as well. I constantly questioned why developing a philosophy of various financial markets, financial instruments, and valuation methods, was not popular amongst philosophy departments. After all, philosophy is in, many cases, an interdisciplinary subject, and it can be used to tests the limits of understanding and logical foundations in various natural sciences, social sciences, and arts.

The Laidlaw Intership Programme gave me the extraordinarily unique opportunity to develop the philosophy of financial instruments—in particular stock option derivatives. Insofar as this blog entry is coming at the end of the internship programme, I have the benefit of hindsight to reflect on both my research and the leadership weekends I participated in. Overall, both my research and the leadership programme enabled me to become much more effective at time-management skills, as well as develop greater confidence in my research abilities.

My initial research plan was to examine the underlying assumptions and conceptual foundations found in stock market prediction methods. Nevertheless, about a week into my research I discovered that this topic was far to broad to cover in this internship, and would be more suitable for a doctorate thesis. Instead, I decided to focus my research on only one type of financial instrument—stock options—and consider George Soros’ philosophical framework with respect to them. This research required me to read a great deal of financial literature to obtain a greater understanding of the structure and uses of stock options, so I quickly found myself immersed in the finance section of the library, rather than philosophy! Gaining a detailed and accurate understanding of stock options, as well as George Soros’ philosophy of financial markets presented the greatest challenge to me. In virtue of this challenge, I learned how to compartmentalize my research in order to achieve my research goals in the limited time I had. In the end, I was able to manage my time well enough so that not only did I gain a very specialized understanding of stock options, but I was also able to develop a novel application of Soros’ theory of reflexivity to stock options. This previously unforeseen application of Soros’ theory has has given me the confidence to continue pursuing research in the field beyond my undergraduate career into postgraduate studies.

 

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State formation the Levant and where the West went wrong

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The Middle East is in turmoil. It has been for decades now, and if you hadn’t noticed then you really haven’t been paying attention. From the harrowing tales out of Syria over the past four and a half years, back to the First Gulf War and beyond, much of this has some origin in the way the state lines were drawn after the collapse of the Ottoman Empire following WWI. Over my time at St Andrews – and even in my UCAS personal statement during my application – I’ve had the chance to talk about unrest in the Middle East. However, very little of this allowed me to focus on what I saw as the root cause of the problem: the actual states we see today in the Middle East and how they were drawn up.

Well, thanks to Lord Laidlaw and the programme here at the University of St Andrews I’ve been given that chance. So here I am to share with you some of my experiences. Seeing as this blog comes near the close of this year’s programme, I’m in a position to reflect back on the process as a whole, and to perhaps share some of my findings.

The major thing I want to share with you, dear reader – and this is something that was, believe me, the bane of my existence for most of the summer – is that archival research is hell. The programme gave me the opportunity, for the first time in my university career, to actually look into archival research. This was terribly exciting. The thought of going down to the National Archives in Kew, or the Middle East Centre at St Anthony’s College, Oxford, made me incredibly important and, frankly, intelligent. Off I go, little old Toby Emerson, to these fancy archives to research important things that have had major effects on the world…

I can tell you, it was a truly humbling experience. Imagine, if you will, my dismay when I here that the St Anthony’s Middle East Centre would be closed during the period I had available to visit. Imagine my pain at finding out just how many documents and maps and photos I would have to order, carefully manage, and then ultimately return without gaining any kind of insight into answering the question I had set myself. I had woefully underestimated the patience required for this kind of research. My truly excellent advisor, Dr Kristen Harkness at the School of International Relations had warned me. She really had. Not in any way to dissuade me from undertaking this kind of research. She had most certainly praised it’s benefits, but had also told me how good she had gotten at Tetris on her phone waiting on various African archives. She’d told me how comparatively good the British National Archives were. I really, really don’t envy her.

There is, of course, an element of experience when it comes to these things. In the British Library I requested a ‘Dictionary of Arab Tribes’, thinking this would give me a comprehensive list of Arab tribes, their locations, and their significance. Unfortunately, I hadn’t read the description online properly, and what arrived at the collection desk was a book containing a list of the etymology of Arab family names. The fact the book itself was quite useless to me was made regardless due to the fact it was written almost entirely in Arabic – a language in which I have less than no skill. As the book sat open next to me for the rest of the day (I was too embarrassed to immediately return it and so pretended to be using it whilst working with another book) I quickly resolved to properly check each source I wanted to use beforehand.

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Some ‘Top Secret’ WWI documents relating to Palestine. Because nothing makes a document more appealing that ‘TOP SECRET’ plastered along the top.

But there we go, you live and learn. I’m sure a lot of the Arts students in the programme could tell you very similar archive horror stories. I did find some useful sources in the archives; the focus of British Imperial records – what they documented and what they ignored – in particular were very telling as to British priorities at the time. My research ended up relying more on secondary sources than I had initially planned, but that’s no bad thing, and I think it’s given me a more rounded idea of things.

So dear reader? What did I find? Well, is it that much of a surprise if I were to tell you that state formation is the Middle East was done on Western Imperial terms following the Ottoman Empire’s collapse after WWI? That much of the conflict in the Middle East today can be seen through an ethno-religious, even tribal lens? And that regardless of these considerations, the Middle East, in particular the Levant, was divided not along ethno-religious, tribal, or in some cases not even topographical lines, but instead by lines drawn in the desert sands in a way that benefitted the Western powers seeking to govern or influence them? It’s probably not much of a surprise, but that’s what I found. It’s been interesting, and it really gives a new dimension, at least for me, for looking at violence and conflict in the modern Middle East, and the responsibility of especially Britain and France in the origin of this.