Chapter 3 of Artificial Intelligence in Finance opens with the quote about AlphaGo beating a human Go player. That event was a big deal back in 2016. People thought it would take at least another decade. It didn’t. And that sets the tone for this chapter. AI moves faster than experts predict.
Chapter 2 of “Behavioral Finance for Private Banking” is where the book gets really practical. This is where Hens, De Giorgi, and Bachmann lay out the specific mental traps that mess up our investment decisions. And there are a lot of them.
Book: Trading and Exchanges: Market Microstructure for Practitioners Author: Larry Harris Publisher: Oxford University Press, 2003 ISBN: 0-19-514470-8
The investment industry loves a good buzzword. And for the last several years, “big data” and “machine learning” have been the ones getting all the attention. Fund managers talk about them in the same breath, like they’re the same thing. They’re not. And the authors make that distinction very clear in this final chapter.
This is post 17 of 23 in a series on Systems Thinking: Managing Chaos and Complexity by Jamshid Gharajedaghi (ISBN: 978-0-7506-7973-2).
In Part 1 we looked at how to get portfolio data from 13F filings and started breaking down Fictional Capital Management’s long book. Now we continue with more portfolio metrics and, more importantly, the liquidity analysis that catches the fund manager in a contradiction.
So we made it through the whole book. Seventeen posts later, here’s where I stand on “Introduction to Private Equity, Debt, and Real Assets” by Cyril Demaria (3rd edition, Wiley, ISBN 978-1-119-53737-3).
Chapter 8 of “The Hedge Fund Book” by Richard C. Wilson is about governance. If that word already made your eyes glaze over, stick with me. This is actually one of the more important chapters, because it explains why hedge funds blow up and how simple oversight structures can prevent it.
Book: Financial Markets and Institutions, 11th Edition Author: Jeff Madura Publisher: Cengage Learning, 2015 ISBN: 978-1-133-94788-2
Chapter 2 answers a question that affects everyone: why do interest rates go up and down? The answer comes down to supply and demand for money, explained through what economists call the loanable funds theory.
This is Part 2 of Chapter 1 from “Investing Psychology” by Tim Richards. If you missed the first part, go read Chapter 1 Part 1 first. We covered how your senses trick you. Now we get into how your brain takes shortcuts and how other people’s behavior messes with your money.