Chapter 2 of Tim Richards’ book is called “Self-Image and Self-Worth.” And the title tells you everything. This chapter is about how your ego quietly destroys your investment returns.
This section of Chapter 3 is where things start to click. Hilpisch moves from talking about AI algorithms in general to showing how neural networks actually work. And then he drops a truth bomb that a lot of people skip over: your model is only as good as your data.
You have done the phone calls, crunched the numbers, analyzed the portfolio. Now it is time to actually show up at the hedge fund’s office and talk to people face to face.
This is Part 2 of our retelling of Chapter 2 from “Trading the Fixed Income, Inflation and Credit Markets: A Relative Value Guide” by Neil C. Schofield and Troy Bowler (Wiley, 2011, ISBN: 978-0-470-74229-7).
So you know what REITs are and you know the three types. But there’s another layer to this. Not all REITs are created equal when it comes to how you actually buy and sell them.
Book: Financial Markets and Institutions, 11th Edition Author: Jeff Madura Publisher: Cengage Learning, 2015 ISBN: 978-1-133-94788-2
Chapter 2 explained why the general level of interest rates changes. Chapter 3 answers a different question: why do different securities pay different yields at the same point in time? A Treasury bond and a corporate bond with the same maturity do not offer the same return. This chapter explains why.
Every problem comes with a story attached. Someone caused it. Someone should fix it. Someone is to blame.
That story feels right. It feels complete. But according to Chapter 3 of Systems Thinking for Social Change, that story is exactly what keeps the problem alive.
Chapter 3 of Behavioral Finance and Investor Types by Michael M. Pompian is where the real meat starts. This is the catalog of all the ways your brain sabotages your investing. Pompian calls them “the building blocks” and splits them into two big groups: cognitive biases and emotional biases.
Six years into Colorado Springs, Walter Davis quit being a stenographer and became a moneylender. By 1912 he was calling himself “The Loan Man” in the city directory. He still listed himself as an attorney, too. He was not an attorney.
In Chapter 13, we meet the Dealers. Larry Harris compares them to any other merchant—like a car dealer or a grocer. They buy inventory at a low price (the Bid) and sell it at a high price (the Ask). Their product isn’t the stock itself; it’s Immediacy. They are selling you the ability to trade right now.