Tag: young
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9.1 Appendix – Economic Cycles
In article 9 I wrote about “Economic Cycles” but I need to clarify some points. Life, economy, business. The economy follows a cyclical pattern, the same is true for human life and business life but we will dig deeper into business life when we will talk about valuation. Economic cycles are mainly defined by the…
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9. Value investing
I’ve a confession to say: I’m a Value Investor or at least is what I aim to be.I’m sure a lot of you are wondering about what means to be a Value Investor.To be a Value Investor is counterintuitive because it isn’t in the nature of human beings to behave like a Value Investor.It’s precisely…
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8. Mr Market
So far I concentrate my contents on the business and the importance of a good management, now we have to speak about the market price.The stock market is auction based. Roughly speaking; agents that compose the market (institutional investors like pension funds or retail investors like us) offer a price for any security exchanged (for…
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7. How the companies reward us
How far and apparently ethereals entities enter in touch with us? As I explained in the preceding chapters, businesses use the stock market to finance their activities.Basically there are two ways that companies use for financing themselves: debt and equity.My blog focuses on equity holders or also called shareholders.As shareholders we own a piece of…
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6. The eighth marvel of the world
Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” Attributed to Albert Einstein The concept behind the compound interest is very simple.Imagine you have a bank account that earn you an annual interest of 4% (it is an utopias today), if you put 1000USD in…
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5.1 Appendix – Currency Value
In the last chapter “Active or passive investing” I spoke about circulating money.I had written about the injection of liquidity by central banks in terms of advantage for investors.New money in the system pushes high people’s spending, earnings of the company and therefore the value of financial assets like stocks.The side effect is that the…
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5. Active or passive investing
When we are starting to enter in the investing world, we basically have two ways to follow.Passive investing or active investing. What is the difference? Stock market is composed by many companies that produce a broad range of products and services. These companies together make the basement of the country productivity.Because the world follows a…
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4. What’s the goal?
“If a man does not know what port he is steering for, no wind is favorable to him.” Seneca The first question we have to ask yourself about investing is“Where do I want to go?”I think that every time we face a new adventure, it’s importante to set the main goal.I start by explaining what my goal…
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3. Wealth
For me it is important to understand the importance of investing for our society, because in my opinion it is the right approach to develop the correct mindset.However we invest not only for an altruistic spirit but because we want to see our wealth growing.The most powerful tool I can use to convey you the…
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2. Trading or investing
In the first article I introduced the general meaning of investing.Now I want to dig about the difference between trading and investing.We live in a society short term oriented, psichologically we are pushed to reach immediately what we want. We can’t wait for nothing, though it is empirically established that success depends on the willingness…