Learnings are a collection of semi-educational topics that I’ve learned over the course of my life and work. In these posts, I discuss, in more formal tones, topics that form the foundation of my understanding of the world.
Having trouble find a specific series of learnings? Try looking at learnings grouped by topics.
Green Transition
The Green Transition is the new name given to the idea that human activities are affecting the natural environment negatively, and that effort should be made to transition the economy to a more sustainable and Earth-friendly path.
Over time, it has garnered much discussion both for and against the idea, and right now, is a…
Long Term Compounder
Everyone is out to find the next long term compounder — a company with such a strong business model that its earnings compounds steadily over the years. The thinking is that for such a company, if you have a long time horizon, then the price mostly doesn’t matter — simply buy and hold, and eventually,…
Growth vs Dividends
How should we evaluate a company that pays $10 in dividends a year, every year, vs a company that pays $5 in dividends this year, $5.25 next year, $5.51 the year after, and so on, increasing its dividends by 5% a year?
Business returns
We’ve discuss the capital stack of a company before — basically how the company funds its initial creation and ongoing concerns. But why are there so many classes of funding? Why not just fund the entire company with equity? Or with debt?
Hedging
While hedging is mentioned in finance a lot, it is, surprisingly, not very well defined. Despite its frequent use in finance literature, it seems that most people have a rather hazy mental model of what hedging is, or how it works.
Partners
What are you actually getting yourself into, when you buy shares of a company? Or the bonds of a company?
Value System
In this blog, we talk a lot about “value” — intrinsic value, extrinsic value, productive value, etc. What does it mean exactly, though, what is value? In this post, I try to put a definition on what I mean by “value”.
Regulations
AML, KYC, MIFID, SEC, CFTC, FinCEN! Regulations and regulators! If you’ve ever worked in finance, you’ll know that the alphabet soup of regulations and regulators that need to be followed is long and overwhelming. Do we really need all of these?!
All Money is Debt
What is money? What is debt? How are they related?
Some people get all twisted out of shape calling fiat money “debt”, and that only gold or bitcoin or silver or whatever is real “money”. But is that really right?
Real Estate Syndication
I’ve received, over time, numerous requests from various people inquiring about real estate syndication.
Here is a quick summary of the space, and the things I look out for when evaluating a new deal.
Rethinking Financial Planning
For most people, retirement planning / financial planning is often thought of as simply how you deal with excess money (disposable income) after paying for living expenses, taxes, etc.
In my opinion, that is a very limited and limiting way of thinking about some of the most consequential decisions you would have to make in…
Affordable housing
Housing is a touchy subject. On the one hand, nobody likes to hear about homeless children, or elderly retirees forced out of their homes. On the other hand, nobody seems particularly obliged to go out of their way to help those in need attain housing.
So what then?
Arbitrage
Arbitrage is the bedrock of almost all modern financial transactions. Arbitrage is what keeps ETFs and their underlying trading somewhat in sync, it is what prevents futures from drifting from their underlying, and it is what options pricing (Black Scholes model and its modern derivatives) is ultimately based on.
Marathon
Unless you are extremely lucky, building wealth will likely be a long term process, something you work towards over long periods of time, possibly your whole career.
Once you’ve built your wealth, retaining it will require just as much, if not more effort. Without the discipline to control your budget, invest wisely and manage your…
Capital Stack
How do business ventures get funded?
Who’s paying for the overhead when the business is first starting out and has no revenue?
And what do they get out of this?
Financial planning, portfolio management and wealth management
Financial planning, portfolio management and wealth management are often used interchangeably, but they are actually different disciplines in finance.
In this post, we look at the differences between the three, and how they should be employed.
Monte Carlo
How much money can you spend every year, if you want your money to last 30 years?
Does this change if you invest 100% in stocks? 100% in bonds? 60/40 in stocks/bonds?
Do you even know what the historical returns of stocks are?
Let’s play a game….
Components of a trading strategy
Contrary to the perception of many people, a lot of things go into a good trading strategy.
It is not simply just “a good idea”, but really, the orchestration of many different disciplines towards a common goal.
Efficient Market Hypothesis
The Efficient Market Hypothesis (EMH) is often cited, or at least alluded to, as the reason why everyone should just buy a basket of all stocks in the market, and then hold them passively. However, while I believe that the general advice is reasonable, the premise is, I believe, flawed.
Analyst Reports
Opinions are like rear ends — everyone has one, and most of them smell funny.
Analyst reports are just formal versions of opinions.
Draw your own conclusions.
How to value a company – cash flow statement
Money comes in, money goes out. But does money stay in the bank?
In this post, we discuss how we can look at the cash flow statement of a company, and decide if it is fundamentally performing.
How to value a company – balance sheet
What does a company own? Can we give a company a valuation, based on what it has?
In this post, we discuss the basics of valuing a company by looking at its balance sheet.
Leverage
Leverage can be used to magnify your potential profits (or losses!). However, there are many ways to apply leverage to a portfolio.
Depending on the asset in question, as well as the time horizon of the investment/speculation, different types of leverage may be appropriate.
How to value a company – income statement
How does a company operate? How do we look at a company’s operations and answer the question, “how much is this company worth”?
In this post, we discuss the basics of valuing a company by looking at its income statement.
How Does Trade Execution Work
What happens after you click “Submit Order”? How does whatever you type into a webform or app gets turned into money changing hands, and shares changing hands?
In this post, we explore the high level microstructure of the stock markets, and how it differs for professionals vs retail traders, and where things can go wrong.
Investing vs Speculating 3
Wrapping up our 3 part series on investing vs speculating, we talk about tips for new investors, tips for new speculators, how you can find your inner investor vs speculator.
Investing vs Speculating 2
What would you do if stocks dropped by 50%? What *should* you do?
Let’s talk about why we buy stocks, when it may be good idea to hold through a drop, and when it may be a good idea to cut our losses.
Investing vs Speculating
What is investing? What is speculating?
Defining both, and then exploring their differences to see where that leads us.
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