Friday, September 01, 2006

Fun with FinanceJust finished reading my first book on investing (see above available from Amazon.) This book was really readable with lots of good real world examples and experienced tips. The goal of investing is to maximize returns while minimizing risk, but the riskier an investment is, the more return one stands to gain or lose, so you understand the dilema. I already knew most of the math, but needed to know the lingo and theories, such as; volatility, efficent market hypothesis, hedging, leverage, put, call, and arbitrage. It covers everything from stocks to options, bonds, money markets and more. There seems to be no way anyone can predict the market, but only respond to trends and new information that is introduced, so the market in current views is essentially random (without insider information, bad Martha.) I was actually surprised at how simple the methods of current day professional investors are, surely at least compared to a rocket scientist (or for somebody like Jesus, man if the stock market was around back then he could've invested and bought all the disciples he wanted...nah the bible would be too huge then.) I have never invested in the "market" before because frankly, I consider it another form of gambling (some people get lucky and some don't), however if the right techniques are applied, maybe it is possible to beat the market...

Here is a good article about a guy who just sits around and lets his computer algorithms do the work for him. If his computer algortihm detects something deemed significant it dings like an egg timer. Let your PC do the investing


6 Comments:

Anonymous Anonymous said...

after you decide to invest (via 401k or directly) at the age of 75, send the results to heaven. you sound like the kid (14 years old, let's say) who wanted to drive a car and read about it and read about it and read about it and read about it and then, by golly, at the age of 54 took the plunge. Congratulations old man on learning how to drive a car after 40 years of reading about it.

6:59 PM  
Blogger AlexanderTheGreat said...

Well I guess cowardly anonymous illogical responses are better than none.

10:58 PM  
Anonymous Anonymous said...

says who

7:00 PM  
Blogger Cate said...

Well I think I know who anonymous is.

While I wouldn't say the response is illogical, it surely is meant in jest. At least it is if I'm right about who anonymous is.

And I'm guessing anonymous is only anonymous because he doesn't know how to switch his identity under the comment section.

11:55 AM  
Anonymous Anonymous said...

good point supermom

7:36 PM  
Blogger sixty-five said...

Hey - investing is fun and easy. Everyone should try it. You know, of course, the quick way to make a million? Start with two million and only lose half.

7:44 PM  

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