What it means
Soros's framework. Prices don't just reflect reality - they create it. A rising stock price improves a company's ability to raise capital, which improves the fundamentals, which justifies a higher price. This is reflexivity, and it explains bubbles and busts.
Why it matters
Most economic models assume markets passively reflect 'true' values. Reflexivity shows the loop. It's why momentum works in trends and why crashes accelerate once they start.
How to use it
Identify situations where price feedback can change fundamentals. Tech IPOs, leveraged businesses, commodity producers with high fixed costs - all are reflexive in different ways.
Take it further
Want a worked example or a deeper dive? Ask Rocky how this concept applies to your specific watchlist or trade idea.
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