Don’t Let One Bad Season Ruin The Farm
For most of the history of human civilization, in addition to being a Hobbesian nightmare, there was little availability for the powerful tools we have today. Over the years, many millions of farmers went out of business because of an anomalous season, a crop infestation, or simply not being able to cover their costs with the crop yield.
Research only available to banks & hedge funds, now available to individuals
Add to this the volatility of the demand side, and you can see that the most popular profession for many centuries was anything but easy. This is how derivatives should be viewed in the arc of history, not as a financial weapon of mass destruction as Warren Buffett famously said, but rather as an essential tool that human beings have developed to help ensure that one bad season or one bad storm doesn’t ruin the farm (in a metaphorical sense).
While different forms of cross-asset hedging have probably been in use since the beginning of human civilization, the first financial instrument developed explicitly as a tool for mitigating risk was likely at the rice exchange in Osaka many centuries ago. The first stock exchanges in the Low Countries also saw a rapid proliferation of risk management tools that we may deceive ourselves into thinking our wholly modern innovations.
Series of 3~11 minutesLast updated11 months ago
Understanding Net Present Value and The Basics of Discounted Cash Flow Models (DCF)
Acquaint yourself with the basics of net present value and discounted cash flow (DCF) models.
Series of 3~10 minutesLast updated5 months ago
Investor Psychology 300
Summary: Fundamental analysis is a cornerstone of equity research and successful investing. But understanding the appetites and drivers of the decisionmaking of other investors can be just as important. While markets face issues unique to any particular time, they’re also facing the perennial cycles caused by limited nature of human rationality. We discuss why you want to lead the crowd, or at least know where it’s going, and not follow it.
Series of 8~27 minutesLast updated2 months ago
Is it a good time to get in? How much should I invest?
Series of 5~21 minutesLast updated11 months ago
The VIX Series
What is the VIX? What does it indicate? How can I use it to improve my strategies?