Money & Finance

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  1. Banking the “Unbankable” World News - Money
  2. Is the Euro Doomed? With Britain heading out of the European Union, Greece back on the brink and discontent fuelling the rise of populist politicians, Bloomberg QuickTake asks can the world’s most ambitious financial experiment survive? (Video by Angus Bennett) World News - Money
  3. Elon Musk on How To Start Up A Business World News - Money
  4. A report by Oxfam suggests Europe’s largest banks have registered over a quarter of their profits in offshore tax havens last year. The continent’s top 20 lenders avoided paying tax on an estimated €25 billion, the study finds. World News - Money
  5. theglobalelite: “World bankers, by pulling a few simple levers that control the flow of money, can make or break entire economies. By controlling press releases of economic strategies that shape national trends, the power elite are able to not only tighten their stranglehold on this nation’s economic structure, but can extend that control world wide. Those possessing such power would logically want to remain in the background, invisible to the average citizen.” - Aldous Huxley was an English writer, novelist, philosopher, and prominent member of the Huxley family. World News - Money
  6. Court Temporarily Blocks President Trump’s Syrian Refugee And Travel Ban
  7. When Buffett was starting his career he offered himself to work for free for Benjamin Graham, the pope of value investing and writer of Intelligent Investor, the bible of value investing. Why would someone work for free? Because the experience and knowledge that you can get in this job is worth much more than money. If you are young and in love with some activity, be open to work for free for someone that can inspire you in a positive way. This video shows Warren himself explaining how his experience working with Graham has changed his life:
  8. Here is a short paragraph from Berkshire’s 1993 letter: “In many industries, of course, Charlie and I can't determine whether we are dealing with a "pet rock" or a "Barbie." We couldn't solve this problem, moreover, even if we were to spend years intensely studying those industries. Sometimes our own intellectual shortcomings would stand in the way of understanding, and in other cases the nature of the industry would be the roadblock. For example, a business that must deal with fast-moving technology is not going to lend itself to reliable evaluations of its long-term economics. Did we foresee thirty years ago what would transpire in the television-manufacturing or computer industries? Of course not. (Nor did most of the investors and corporate managers who enthusiastically entered those industries.) Why, then, should Charlie and I now think we can predict the future of other rapidly-evolving businesses? We'll stick instead with the easy cases. Why search for a needle buried in a haystack when one is sitting in plain sight?” --------------------------------------------- “Severe change and exceptional returns usually don't mix. Most investors, of course, behave as if just the opposite were true. That is, they usually confer the highest price-earnings ratios on exotic-sounding businesses that hold out the promise of feverish change. That prospect lets investors fantasize about future profitability rather than face today's business realities. For such investor-dreamers, any blind date is preferable to one with the girl next door, no matter how desirable she may be. Experience, however, indicates that the best business returns are usually achieved by companies that are doing something quite similar today to what they were doing five or ten years ago. That is no argument for managerial complacency. Businesses always have opportunities to improve service, product lines, manufacturing techniques, and the like, and obviously these opportunities should be seized. But a business that constantly encounters major change also encounters many chances for major error. Furthermore, economic terrain that is forever shifting violently is ground on which it is difficult to build a fortress-like business franchise. Such a franchise is usually the key to sustained high returns. “ 1987 letter to Berkshire Hathaway shareholders Warren Buffet understands value investments and is exceptional at it. Also, value investments deal with hundreds of millions of dollars, and return hundreds of millions as well. These amounts make a difference to Buffet. For a big investor like Buffet, a seed investment of $1 Mn which returns $5 Mn is nothing more than pocket change. Berkshire generates $20-25bi per year in cash. Hard to invest this amount of money in startups.
  9. US states grouped and labeled as countries with similar GDP. World News - Money
  10. Before understanding the different types of mutual funds and ETFs, you need to understand market cap. Market capitalization is a quick way of determining how large a company is. To calculate market cap, take the share price and multiply it by the number of shares outstanding (meaning shares that anyone can buy). This will give you a dollar amount, which is the company’s market cap. Here are the most common names you’ll see, as well as their corresponding market caps: Large cap – $10-$100 billion Mid cap – $2-$10 billion Small cap – $250 million-$2 billion For example, let’s say Company A has a stock price of $10 and has 1 million shares outstanding. Their market cap would be: $10 x 100,000,000 shares = $1,000,000,000 So Company A has a market cap of $1 billion. According to the list above, this would make them a small-cap company. Mutual funds and ETFs will often categorize themselves by the size of companies that they invest in. For example, a large-cap ETF will hold stock in only large-cap companies. There are a few other types of market caps you may see, but not as often. They are: mega cap (> $100 billion), micro cap (< $250 million), and nano cap (usually <$50 million). Ideal asset allocation (and how to choose) One thing to consider is your own personal level of risk tolerance. Everyone’s asset allocation for stocks is going to be different based on the level of risk that they’re willing to take on. Here is the mix that I am currently investing with equities: Ticker ETF Name Indicative Value Ticker Equal Weight 30% RSP Guggenheim S&P 500® Equal Weight ETF RSP.IV 10% EWEM Guggenheim MSCI Emerging Markets Equal Country Weight ETF EWEM.IV 30% EWMC Guggenheim S&P MidCap 400® Equal Weight ETF EWMC.IV 30% EWSC Guggenheim S&P SmallCap 600® Equal Weight ETF EWSC.IV It’s important to know the difference between ETFs and mutual funds, as well as their strategies, before investing. Also, understanding market capitalization is crucial before choosing your own investment strategy. You will also want to make sure you’re comfortable with your asset allocation so you’re not too heavily weighted in one asset class. This will help you keep a well-balanced and diversified portfolio.