This will be overlooked but this is actually the answer to your question - buy some stock. Any stock. Just one stock if you are low on cash. Just buy it. Now. Not tomorrow, today. It will force you to learn about the business you bought, how it is conducting its business but also how the stock market works. Then how the global economy works and how things are interlaced and connected. In few months you will understand more than any school or book could teach you.
Ask HN: Book recommendations for understanding financial systems?
111–120 of 211 posts
Re: Ask HN: Book recommendations for understanding financial systems?
#112Earlier quoted context omitted.
I recommend against Mankiw, and to be honest, macroeconomics as a whole. But particularly undergrad macroeconomics. Undergrad macro textbooks are more or less designed to teach you how to work a model, and how to prove theorems about a model. But when all is said and done, macro tends not to go the distance and demonstrate how the model relates to the real world. They also get important details wrong. Most of the wes…
How is Tyler Cowen's textbook? I figured that'd be better.
I’d keep in mind that both Mankiw and Cowen are on the right, politically. Cowen in particular, Neo-Classical/libertarian, while Mankiw is often considered Neo-Keynesian, but still conservative. So, balance this with Paul Krugman, Larry Summers, Robert Reich, or so.
Re: Ask HN: Book recommendations for understanding financial systems?
#113Somewhat meta comment, when I read all the conflicting recommendations here (seriously, for almost all recommendations there’s an anti-recommendation somewhere in this thread), it makes me question the value to me in really trying to understand the financial system. I mean, I’m not completely financially illiterate. I understand compound interest. I stick with sinking most of my money into passive investing, saving x…
Yeah, I would make a distinction between learning about the financial system for investment purposes- which as a non-professional in that space I think is pointless- vs learning about to understand what's happening in the world.
Whatever domain you're in, whatever interests you have- having something of a model of the financial machinery that basically underlies all human activity, both in the small and in the large, I would argue is super valuable.
The space is ENORMOUS and incredibly complex and so one has to have a plan and some kind of motivation for carving a path through it, to be sure.
Hard to engage with more specifics without more context, happy to continue the conversation.
Re: Ask HN: Book recommendations for understanding financial systems?
#114If you’re interested in fiat currency and the fed, I highly recommend the book Lords of Finance. The author does a really good job of showing just what central banks do and how their responses to economic events shape outcomes. The book entirely focuses on the Great Depression and the central banks of the USA/Europe but it’s really well written and really helped me appreciate what the fed does.
> Lords of Finance
Oh, yes, great book! And good read.
Two things stuck in my mind:
A) How slow things were back then. The British finance minister (“Chancellor and Under-Treasurer of Her Majesty's Exchequer”) would get on a steam ship, incognito, for a month or so to visit his counterpart in the US, then skipper back, and months later respond to the crisis.
B) How few people saw things coming. People thought the skirmishes that ended up precipitating WW I would soon be over, Irvin Fisher confidently declaimed just before the 1929 stock market crash that “stock prices have reached what appears to be a permanently high plateau”, people didn’t pay much attention to this obscure Adolf Hitler guy.
Every time, by the time the true dimensions became obvious, it was too late to do something (flee, sell, ...).
With respect to the current “15 cases going down to zero, we are doing great, we have it under control” flu, draw your own conclusions.
Edit: typos
Re: Ask HN: Book recommendations for understanding financial systems?
#115Somewhat meta comment, when I read all the conflicting recommendations here (seriously, for almost all recommendations there’s an anti-recommendation somewhere in this thread), it makes me question the value to me in really trying to understand the financial system. I mean, I’m not completely financially illiterate. I understand compound interest. I stick with sinking most of my money into passive investing, saving x…
You'll find that even in the hard sciences, which are more objective many times over than the social sciences. Any complex field is going to generate controversy. That doesn't mean it isn't worth learning about.
That said, you should know why you're studying finance if you're going to spend the time on it. For me intellectual curiosity is a good enough motivator. It also helps me evaluate claims made by, for example, public officials. But I think it is reasonable to question whether it will significantly improve your personal financial situation.
Re: Ask HN: Book recommendations for understanding financial systems?
#116If you’re interested in fiat currency and the fed, I highly recommend the book Lords of Finance. The author does a really good job of showing just what central banks do and how their responses to economic events shape outcomes. The book entirely focuses on the Great Depression and the central banks of the USA/Europe but it’s really well written and really helped me appreciate what the fed does.
> Lords of Finance Oh, yes, great book! And good read. Two things stuck in my mind: A) How slow things were back then. The British finance minister (“Chancellor and Under-Treasurer of Her Majesty's Exchequer”) would get on a steam ship, incognito, for a month or so to visit his counterpart in the US, then skipper back, and months later respond to the crisis. B) How few people saw things coming. People thought the ski…
Those stuck with me but so did the points the author made about gold. There was a depression. Central banks sticking to the gold standard is part of what made it the Great Depression.
Re: Ask HN: Book recommendations for understanding financial systems?
#117I have been here before where I actually wanted to find out what is going on with finance. I was amazed that its more about ideology than it was about finance itself. It was more about psychology and the intents of human nature than it was just about transactions and definitions. In as much as books are good, i would urge you to follow certain men as well. Prof. Richard Werner and all his books. Prof. Steve Keen and…
It's so true, I'd say over half of 'finance/trading' books are almost entirely about psychology and their own personal take, it's really discouraging.
Re: Ask HN: Book recommendations for understanding financial systems?
#118Get some conflicting ideas. Two great, short books are The Mystery of Banking by Rothbard (available for free here: https://mises.org/library/mystery-banking ) and Economics in One Lesson by Hazlitt (free here: https://fee.org/resources/economics-in-one-lesson/ ). They both conflict quite substantially with the mainstream and might open up a whole new line of inquiry for you.
And keep in mind that both of these are Austrian/libertarian takes on things - with important insights, no doubt, but then balance it with some more conventional and maybe even some left accounts.
Re: Ask HN: Book recommendations for understanding financial systems?
#119Surprised no one has mentioned "Trading and Exchanges: Market Microstructure for Practitioners".
Lots of people recommending Ernie Chan - and he is very big in the space but he uses 100 words when 10 will do its a hard time slogging through it.
De Prado is incredibly technical , if there was a De Prado cliff notes Id say read that.
And don't forget if you are coding this stuff up, lots of people have but those books into re-usable code on github.