No, Finance Doesn’t Require Hard Math
Finance is not just a game of math and numbers–in fact, those who succeed in the industry tend to have two other skills that are much more important.
Demographics is Destiny
They say demographics is destiny, and they aren’t wrong. But that doesn’t mean we can just buy and sell stocks according to the flows of demographic change–the world is much more complicated! To incorporate demographics in a financial analysis, we need to think beyond buying and selling. We need to get multidimensional.
The Mysteries of Margin: Short Accounts and the Moving Risks They Make
We continue digging into margin by looking at how short margin accounts different from long accounts and why shorting stock presents very different kinds of risks to accounts. Want to know why some hedge funds blow up and others don’t? Start here.
More on Margins: How Borrowing in Long Accounts Boosts Returns
Leverage is an essential part of finance, and understanding how it works can benefit traders; misunderstanding it can wipe out accounts, and often has!
Vectorizing the Qualitative
To model assets properly you need to vectorize the qualitative. Sound weird? It is–but it’s also a lot of fun.
How Leverage Boosts Returns–and Risk
If you know how credit, leverage, borrowing, and liquidity are interrelated, good for you–you have some instinct for the financial game. But the details are very important, because they demonstrate why some people become billionaires using borrowed money and others go bankrupt.