Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: Book recommendations for understanding financial systems?

news.ycombinator.com

Post reply on HN
Print view View original

61–70 of 211 posts

Re: Ask HN: Book recommendations for understanding financial systems?

#61

Post by dave333 »

santiagobasulto wrote: post #57
dave333 wrote: post #55

Elliott Wave Principle by Robert Prechter and A. J Frost https://epdf.pub/queue/elliott-wave-principle-key-to-market-... This is the technical analysis method used by many market traders and it both predicted this week's market plunge as well as described its form, and is currently forecasting a further plunge next week. For economics I would look for any youtube talk by Prof. Steven Keen - he accounts for debt that…

Elliot Wave analysis is harmful, do not engage with it. I have friends that have lost a lot of money trying to follow it. It has 0 scientific background, it’s not more than astrology applied to finance. Please don’t spread these things, be responsible.

Do flocks of birds or schools of fish fly or swim in random directions? Or do they swarm together in discernible patterns? At core we share similar brain structures with them.

Re: Ask HN: Book recommendations for understanding financial systems?

#62

Post by cinquemb »

nabla9 wrote: post #60
cinquemb wrote: post #56

Earlier quoted context omitted.

Even assuming that's true, one can't say the sort of risk and investor took on 15 year look-backs since WWII has been evenly distributed to get some sort of acceptable return, nor can one say that this will continue hold true for the next 15 years. You may believe it hold true though, and many do… but very few will do their homework on the risks to their "diversification" and their own changing liquidity constraints…

> assuming that's true, Don't assume. You can calculate it in spreadsheet. > You may believe it hold true though, In the long run we are all dead. We don't need to believe they hold true. Certainty is not part of this world. Because you never know is just rhetorical argument. Quantifying risk and going on that is good enough.

>Quantifying risk and going on that is good enough.

Because most people who are blindly buying indexes around the world thinking they are diversified and DCA are certainly doing that…

Re: Ask HN: Book recommendations for understanding financial systems?

#63

Post by haileris »

talolard wrote: post #14

I liked Trading and Exchanges by Larry Harris

Seconding this. It's a fantastic book, a little outdated but easy to fill in the gaps.

I think the best route is to read this, skip all of the books marketed to retail traders. Read the things the professionals read like the CFA study materials.

Mark Meldrum also has a comprehensive coverage of the CFA body of knowledge on YouTube.

Re: Ask HN: Book recommendations for understanding financial systems?

#64

Post by maest »

I have almost 10 years in the finance industry, both buyside and sellside and my take is that, while there are some fundamental principles at play, the world of finance is too messy and complicated for any one book to describe it. An even stronger statement I am willing to make is that no one person correctly and fully understands the financial system.

So, once you accept that there is no "correct" answer to how the financial system and how markets work, what's left to do is to follow what's happening in the world and try to build your own mental model.

One source I'm a big fan of (and has a bit of a cult following in the financial world) is Matt Levine's "Money Stuff" blog: https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthe...

He's engaging, funny, talks about interesting topics and, most importantly, he's _rarely_ wrong. It's a rare thing seeing a journalist talk about your specialty subject and actually being correct.

Similar source is Felix Salmon: https://www.felixsalmon.com/

Similar league as Levine, but I find him slightly less engaging, for whatever reason.

Re: Ask HN: Book recommendations for understanding financial systems?

#65

Post by thekyle »

cinquemb wrote: post #52
nabla9 wrote: post #50

Earlier quoted context omitted.

His advise is still sound if you are an investor and not speculator. The part of your investment that is in stock should be determined your investment horizon. If you don't need to sell your stock in next 15 years, don't hold cash.

Yeah, would have played out very well for those top ticking n225 in 1989, esp with every global CB's trying to follow in the footsteps of the BOJ, while everyone is crowding into "diversification" and searching for yield… I consider investors to be the same as speculators, just speculators who think their beliefs will remain valid over long time frames… cause that's the gamble.

So if you don't believe in investing then what are your plans for retirement? Just to save enough money into a bank account?

Re: Ask HN: Book recommendations for understanding financial systems?

#66

Post by maest »

dave333 wrote: post #61
santiagobasulto wrote: post #57

Earlier quoted context omitted.

Elliot Wave analysis is harmful, do not engage with it. I have friends that have lost a lot of money trying to follow it. It has 0 scientific background, it’s not more than astrology applied to finance. Please don’t spread these things, be responsible.

Do flocks of birds or schools of fish fly or swim in random directions? Or do they swarm together in discernible patterns? At core we share similar brain structures with them.

There's a gargantuan step to be made between saying "there are _some_ similarities between human and fish brains" to "the stock market behaves non-randomly like a school of fish". And an even bigger one to saying "The non-random patterns in the stock market can be divined with TA".

Re: Ask HN: Book recommendations for understanding financial systems?

#67

Post by fauria »

If you are looking for a shorter read, I would recommend "The money creation paradox" paper published by ING: https://think.ing.com/uploads/reports/Money_paradox2.pdf

I find fascinating that, despite the simplicity of the question, not every economist agrees on how this happens.

Re: Ask HN: Book recommendations for understanding financial systems?

#69

Post by mrpickels »

anticodon wrote: post #68

Why there's no suggestions for Karl Marx? He predicted these crises and that they're unavoidable in capitalism and all only get worse with the time.

because we live in the real world and deal with real humans. Karl Marx never worked a single day in his life and created an ideology for people who believe in unicorns. His work is a criticism of Adam Smith's theories, not a self-sustainable solution.

Re: Ask HN: Book recommendations for understanding financial systems?

#70

Post by triggercut »

If you have the time for a deep deep dive, I would recommend David Harvey's The Limits to Capital New Edition (2006). There's always the recorded version of his course on Reading Marx's Capital[1] which is similar.

[1]https://www.youtube.com/user/readingcapital

Post reply on HN