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I have a degree in economics. Both of my parents have PhD’s in economics from MIT and were professors of economics with dozens of published works. I grew up aro

by CPLX 5y ago

I have a degree in economics. Both of my parents have PhD’s in economics from MIT and were professors of economics with dozens of published works. I grew up around economists including multiple Nobel prizes winners in economics. None of this has anything to do with being good at investing on a personal level. Like nothing, in fact I would argue that it’s probably harmful and in my experience causes people to overthink things. Economics as a profession has a fucking terrible track record of predicting financial markets or broad macroeconomic trends. At this point I’m not sure it’s even clear what economics is for but I can say with confidence that it’s definitely not the place to start if you want to get better at investing.

hervature 5y ago
Agree very much with this. Have an economics degree, PhD from a finance department (although my research was not finance). Personally, with a solid grasp of calculus II, I breezed through my economics degree. Including graduate level courses. My two cents are that an understanding of stats and honing probabilistic intuition (a devilish thing to do) is much more important. Of course, the basic education helps you grok things, how/why a central bank influences an economy, but you may be led astray if you put too much faith into things like the Phillips curve. I would suggest reading any respected macro textbook as well as Hull for learning how financial instruments are priced. You’ll quickly learn that diversifying will get you 95% of the way there with 100% of your mental well-being intact. If you want to be fancy at your cocktail parties, throw a Markowitz optimization over your portfolio. Unless you are willing to devote your entire time finding an edge, you just will not be able to compete with hedge funds and their arsenal of tools, chief among them is a constant stream of intelligent and well paid people to devote their entire time doing it.
mihaic 5y ago
Pretty much what I was thinking, but thank you for bringing some authority so it's not just an opinion.

by CPLX 5y ago

hervature 5y ago

Agree very much with this. Have an economics degree, PhD from a finance department (although my research was not finance). Personally, with a solid grasp of calculus II, I breezed through my economics degree. Including graduate level courses. My two cents are that an understanding of stats and honing probabilistic intuition (a devilish thing to do) is much more important. Of course, the basic education helps you grok things, how/why a central bank influences an economy, but you may be led astray if you put too much faith into things like the Phillips curve. I would suggest reading any respected macro textbook as well as Hull for learning how financial instruments are priced. You’ll quickly learn that diversifying will get you 95% of the way there with 100% of your mental well-being intact. If you want to be fancy at your cocktail parties, throw a Markowitz optimization over your portfolio. Unless you are willing to devote your entire time finding an edge, you just will not be able to compete with hedge funds and their arsenal of tools, chief among them is a constant stream of intelligent and well paid people to devote their entire time doing it.

mihaic 5y ago

Pretty much what I was thinking, but thank you for bringing some authority so it's not just an opinion.