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I'd recommend starting by reading this article about how Google approached educating its employees on investing: http://www.sanfranmag.com/story/best-investme
by scw 17y ago
I'd recommend starting by reading this article about how Google approached educating its employees on investing:
http://www.sanfranmag.com/story/best-investment-advice-youll-never-get http://www.sanfranmag.com/story/best-investment-advice-youll...
And this talk by Charlie Munger on stockpicking and the art of worldly wisdom:
http://ycombinator.com/munger.html http://ycombinator.com/munger.html
The two major mental models which I've found helpful in understanding the market are the Efficient Market Hypothesis (EMH; http://en.wikipedia.org/wiki/Efficient_market_hypothesis http://en.wikipedia.org/wiki/Efficient_market_hypothesis) which explains how the market acts under idealized conditions of rationality. Temper this with learning about Behavioral Economics (http://en.wikipedia.org/wiki/Behavioral_economics http://en.wikipedia.org/wiki/Behavioral_economics) which covers issues of human perception and how us semi-rational beings actually act, such as perceiving a loss of $100 as twice as painful as a gain of $100.
The Intelligent Investor by Benjamin Graham is a wonderful book, but reads densely. In more recent editions contains thoughtful side commentary by Jason Zweig which help break up the text and give a more modern perspective. A key idea is the separation between investing and speculation: set aside some percentage of your portfolio for speculating, and experiment with it, but investing for the long-term is the way to go in the absence of something which allows you to escape the financial gravity of the efficient market.
A Random Walk on Wall Street by Burton Malkiel covers efficient market theory thoroughly. The Intelligent Asset Allocator by William Bernstein for approaches to constructing long-term portfolios.
Lots more to say on this issue, but hopefully some of these starting points will get you thinking.
- arthurdent 17y agoIncidentally, heard a rumor (absolute speculation and it was probably made up by the person who told me) that Google was interested in financing an internal hedge fun and someone sent me this link. http://www.google.com/intl/en/jobs/uslocations/mountain-view/finance/taxtreasury/trader-foreign-government-bonds-mountain-view/index.html http://www.google.com/intl/en/jobs/uslocations/mountain-view...
- ig1 17y agoMost large multinationals will have traders in their treasury teams. If you've got large reserves of currency in lots of currencies you need to manage currency and deflationary risk.