In 1988, billionaire investor-speculator George Soros wrote a book called The Alchemy of Finance. The book was well-received as a book about the ups and downs of life as a trader, but Soros's theory of reflexivity -- which he believes should replace conventional economic thinking -- was largely ignored.

For the past 20 years, Soros has continued to bang the drum on reflexivity, and most people have continued to ignore him, with some economists expressing tremendous disdain for his ideas.

A USA Today profile of this brilliant investor and philanthropist manages to make him look pretty pathetic: " [...] George Soros, now in his eighth decade and enjoying a personal fortune estimated at $9 billion, yearns to be seen as something other than a financial oracle or Democratic Party sugar daddy. The Hungarian émigré, who built a worldwide reputation by out-thinking markets, desperately wants to be acknowledged as a philosopher."

With a new book out, The New Paradigm for Financial Markets: The Credit Crash of 2008 and What It Means, Soros is ever-hopeful that this time he will finally gain the recognition he deserves for the theory he believes to be his "life's work."

Having read a few of Mr. Soros's books, I doubt that his propensity for pontification will appeal to most readers. But the USA Today interview is definitely worth reading to get his thoughts on the current state of the market. He might be heckled as crazy and irrelevant, but I'm always interested in the market predictions of someone who made $9 billion making market predictions.

George Soros, the billionaire money manager, claims to be old and wise, and able to guess the market's turns better than most. Given the compensation he has collected on Wall Street over his lifetime, it is hard to quarrel with that.

Soros, who still manages several hedge funds, says that the U.S. is in a "bear market rally," according to The Wall Street Journal. Like many pundits, he stakes his claim primarily on the American housing market. If home prices keep up their sharp decline, how, he reasons, can the rest of the economy do well?

He may have a point. Much of what economists have said recently is based on a recession being avoided because consumer spending has slowed but not halted. People are still going to Wal-Mart (NYSE: WMT). Thank goodness for that.

But Soros and his intellectual allies look at a housing market that will continue to decline into 2009 and say that this must force a deeper and deeper downturn.

No one wants to believe Soros. The thought is too grim. But the logic is hard to dispute.

Douglas A. McIntyre is an editor at 247wallst.com and the author of the Ten Stocks Under $10 letter.

America touts itself as an egalitarian society. But the way we reward people suggests that while everyone has an equal chance to get rich, only about five people can make more than a billion in a year. The way these five people get there reveals what our society most values -- the ability to help people with huge amounts of money get much richer as quickly and consistently as possible.

Wednesday's New York Times listed those five most valuable players. Here are our society's biggest winners, where they work, how much they made in 2007, and how they won:

• John Paulson (Paulson & Co.) -- 2007 earnings: $3.7 billion. Beginning in 2005, Paulson made huge bets on the decline in value of securities backed by subprime mortgages
• George Soros (Soros Fund Management) -- 2007 earnings: $2.9 billion. Soros' $17 billion flagship Quantum Endowment fund racked up a 31.7% return in 2007, its best annual showing since the high-tech implosion at the start of this decade. Soros' $2.9 billion payday comes almost entirely from his personal stake in the fund (which he no longer manages). I don't know how he made that 31.7% return.
• James Simons (Renaissance Technology) -- 2007 earnings: $2.8 billion. Simons, a mathematician and former Defense Department code breaker, uses complex computer models to trade.

It is hardly a surprise that a Wall Street Journal poll of economists finds them in a foul mood. Most believe that the financial troubles in the US will get much worse and that the housing market has yet to bottom.

According to the newspaper: "Three interrelated issues weighed on the economists' minds. When asked what the biggest downside risk to their forecast was, 35% said further deterioration in the credit markets, while 25% said it was a sharp drop in consumer spending and 13% said continued housing weakness."

The news raises the question of whether experts are "talking" the economy into a worse recession. Yesterday, George Soros said the current crisis could cost financial institutions almost $1 trillion worldwide. Just a few months ago, many experts thought the US would avoid a recession completely.

The question is a reasonable one. When the press and economists make repeated public comments on how bad things are does it causes consumers to buy less, worry more, and put more cash on the sideline?. No one knows, but given the psychology of fear no one should be surprised if the answer is "yes".

In a recession, fear feeds on fear and consumers can freeze their spending almost completely.

Douglas A. McIntyre is an editor at 247wallst.com.

Now that a number of banks and brokerages have taken large write-offs after assessments of the falling value of mortgage-backed and LBO debt, things are supposed to get better. Auditors have looked at the extent of the damage and the Fed is putting cash into the system to improve balance sheets.

But a lot of the smart money does not see it that way. The International Monetary Fund said that the total damage from the crisis will be $945 billion. That would mean that the housing market will get much worse along with defaults on corporate and consumer debt.

Now, in rides George Soros, iconic hedge-fund manager and a billionaire many times over. He says the credit crisis is only in its early stages. In a conversation with Bloomberg, he said, "This is a man-made crisis and it's made by this false belief that markets correct their own excesses. It will take much longer for the full effect of the decline in the housing market to be felt.'' In other words, hike up your pants and buy a boat. The flood waters are getting much higher.

No one knows whether the IMF or Soros is right. Comments from management at Morgan Stanley (NYSE: MS) and Merrill Lynch (NYSE: MER) seem to indicate that they see things getting better in the second half of this year.

Even so, we should pay attention to Soros's more pessimistic prediction. Those forecasting worse times are not idiots and need to be, at the very least, listened to carefully.

Douglas A. McIntyre is an editor at 247wallst.com.

Google (NASDAQ: GOOG) this, Apple Inc (NASDAQ: AAPL) that, will Lehman Brothers Holdings (NYSE: LEH) follow Bear Stearns (NYSE: BSC) -- bleh, all hotly debated, all random market noise! Noise that you must learn to ignore.

The financial media -- envious of the fat profits generated by such entertainment-based businesses as World Wrestling Entertainment Inc (NYSE: WWE), Las Vegas Sands Corp. (NYSE: LVS) and Wynn Resorts (NASDAQ: WYNN) -- has brainwashed you into believing that in order to make money in the stock market, you must keep up to date with every single headline and development in the business world. Hogwash!

I have no problem with financial entertainment, but I do take issue with all these media outlets making their content out to be useful to investors. I've repeatedly echoed this theme in articles like this and I don't expect this industry to change anytime soon, but I am going to keep preaching so you will better understand how low your chances of success are if you bet on the most popular -- hence the most efficient -- topics du jour. Unless you are George Soros or Warren Buffett or a few other wealthy elderly men, there is always somebody better informed and more intelligent than you are. Hence, you are always at a disadvantage.

I'm placing this blog post squarely at the feet of George Soros. The first reason I'm doing that is because I can. The second reason I'm doing it is because Mr. Soros will never read it. The third reason is because I have the ability to understand insurance actuary tables and I can read the writing on the wall.

Is anyone out there willing to take a guess at exactly why George Soros, Progressive Insurance (NYSE: PGR), and most of the rest of the auto insurance industry is so highly motivated to promote the green movement? Do you think it's because they want more trees available for the little birdies to sing in? Is it because someone said we're running a couple quarts low on oil? Could it be that they fear "green house gases" will soon choke us all? Nope, it's about none of those things. It all comes down to percentages, money, and control.

Coach Inc. (NYSE: COH) opened at $47.61. So far today the stock has hit a low of $47.55 and a high of $48.38. As of 11:00, COH is trading at $48.00, up $0.66 (1.4%).

After hitting a one-year high of $54.00 in April, the stock has trickled slightly downward over the past two months. Wildly successful hedge fund manager and billionaire investor George Soros increased his holdings in COH by nearly 55% in the first quarter of 2007, while the stock price was at roughly where it is now. He holds about a $23M stake in COH currently. With the recent dip, now might be a good time to get into COH if you like to follow the big boys. Recent technical indicators for COH have been bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $42.50 range. COH hasn't been below $42.50 since November and has shown support around $46.10 recently. This trade could be risky if the company's earnings (due out in late July or early August) disappoint, but even if that happens, it looks like this stock could find support above $45 where it has bounced three times in the past month and also where its 200 day moving average is.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: At publication time, Brent neither owns nor controls a position in COH.

Billionaire George Soros, who knows a thing or two about how to make a buck, likes Microsoft Corp. (NASDAQ: MSFT), a lot. In fact, he's doubled his stake in the world's largest software maker.

Soros reported owning 415,497 shares of Microsoft as of March 31 from a previously disclosed stake of 198,075 shares.

This is an interesting contrarian bet.

Analysts aren't expecting on average Microsoft's shares to hit $33.88 over the next 12 months, according to Thomson Financial. They currently traded at about $31.

Wall Street is concerned that the billions Microsoft is spending to catch up with Google Inc. (NASDAQ: GOOG) in search will depress profits. There are also rumors about huge multi-billion acquisitions including Yahoo! Inc. (NASDAQ: YHOO).

So what does Soros see that others don't?

I don't know the answer to the question but it's important to remember that sentiment on tech stocks varies between irrational exuberance and cataclysmic doom. The reality is rarely that cut and dry, which is something savvy investors such as Soros understand very well.

Soros isn't bullish on every tech company.

He's cut or dropped his stakes in Oracle Corp. (NASDAQ: ORCL), Take-Two Interactive Software Inc. (NASDAQ: TTWO) and eBay Inc. (NASDAQ: EBAY), according to Reuters.

In a February 24th column in the Wall Street Journal, Bill Coles talked about his love of Arthur Conan Doyle's short stories featuring Sherlock Holmes. I enjoy Holmes, but prefer Agatha Christie's Belgian sleuth Hercule Poirot. Why am I writing about this on BloggingStocks?

I believe that investors can learn a lot about methods of research and thinking about investing from reading the classic detective stories and novels. The way that they approach problems, think of solutions that others are likely to miss and do copious research, never accepting the obvious answer. These are all the characteristics of great investors, from Warren Buffett to George Soros to Peter Lynch.

Want to learn more about applying the methods of the great literary detectives to your investment research? Believe it or not, there's actually a book about it: Robert G. Hagstrom's The Detective and the Investor: Uncovering Investment Techniques from the Legendary Sleuths. This is not a book I would suggest to every investor, but if you enjoy a good mystery yarn as much as I do, you will want to pick up a copy.

According to the Commodities Watch [subscription required] column in Tuesday's Wall Street Journal, analysts believe that the growth in exchange-traded funds has "buoyed" the prices of gold and silver. According to John Reade of UBS, the amount of gold in ETFs is "quite an impressive number." Basically, what has happened is this: As fund managers anticipated a growth in interest in investing precious metals, they established gold and silver ETFs. To establish the fund, they acquired large quantities of these metals, reducing the liquidity in the market. This, in turn, drove prices up, which in turn, attracted more investors and so on.

This is an interesting illustration of John Maynard Keynes's investing philosophy occurring on a large scale. While he is best known as more of a macro-economist, he provided one of the most compelling metaphors for financial markets.

Suppose that a newspaper hosts a beauty contest where entrants are asked to look at 100 photos of models and select the six that they thought were the most beautiful. Prizes would be awarded to readers who voted for the models who received the most votes. How would you vote? It would be naive to simply select the ones that you liked most. What if you have different tastes than the average person? Instead, you must try to select the models who will be considered most attractive by the average reader. However, the other readers will be making their selections the same way.

To quote Keynes: