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Ask HN: How can I learn macroeconomics properly?

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Re: Ask HN: How can I learn macroeconomics properly?

#111

Post by avvt4avaw »

countvonbalzac wrote: post #105
avvt4avaw wrote: post #74

I'm a professional investor (more than a decade of experience at hedge funds, particularly in global macro and quant, managing my own and other people's money). Your central premise is flawed -- in particular > Last 3 years has shown that to be a good investor you need to know macroeconomics This is not true. It is true that 'macro' events (central bank actions, supply/demand shocks, wars, pandemics) affect prices, b…

Do you have any recommendations for tax efficient wrappers?

In the UK (where I am) the main ones are SIPPs and investment ISAs. In the US I believe people mainly use Roth IRAs (this is not any special secret advice, it is like the first thing your tax adviser will tell you).

Re: Ask HN: How can I learn macroeconomics properly?

#112

Post by avvt4avaw »

otterley wrote: post #81
avvt4avaw wrote: post #74

I'm a professional investor (more than a decade of experience at hedge funds, particularly in global macro and quant, managing my own and other people's money). Your central premise is flawed -- in particular > Last 3 years has shown that to be a good investor you need to know macroeconomics This is not true. It is true that 'macro' events (central bank actions, supply/demand shocks, wars, pandemics) affect prices, b…

How are your returns compared to those of a passive S&P 500 investor over the past decade?

About the same, with lower volatility and much lower drawdowns (that's net of fees -- before fees they are much better).

Re: Ask HN: How can I learn macroeconomics properly?

#113

Post by lordnacho »

Hedge fund guy here.

Every desk I ever sat on talked about macro, but none of them ever made any money from it. Equity options, fixed income (the home of macro traders), trend following, HFT, and so on. Everybody throws around macro vocab, nobody has anything resembling an idea of how it affects markets. Or rather, nobody has a convincing framework for how things connect. Bonds, STIRs, Fed Funds rates, inflation, growth, unemployment, all that, all you ever seem to get is individual stories that sound good but that don't fit into any kind of explanation of how the economy works.

I did a degree in economics too, and unsurprisingly that also did not bring everything together. Contrast that with eg thermodynamics where over time all the stuff makes sense, and it even connects with information theory.

Even if you did have a coherent macro story, you would struggle to answer the most important question: What is priced in? This is mostly a question about local dynamics rather than macro. Why are used cars expensive? What about chips? What about bonds and currencies and so on? All things that you can learn about, just not in a macro book.

Re: Ask HN: How can I learn macroeconomics properly?

#114

Post by rkmoniofficial »

lordnacho wrote: post #113

Hedge fund guy here. Every desk I ever sat on talked about macro, but none of them ever made any money from it. Equity options, fixed income (the home of macro traders), trend following, HFT, and so on. Everybody throws around macro vocab, nobody has anything resembling an idea of how it affects markets. Or rather, nobody has a convincing framework for how things connect. Bonds, STIRs, Fed Funds rates, inflation, gro…

[dead]

Re: Ask HN: How can I learn macroeconomics properly?

#115

Post by lutorm »

coding123 wrote: post #94
Adraghast wrote: post #92

Earlier quoted context omitted.

I'm curious why you became a "professional investor" instead of following your own advice. > Are you better than them? Are you?

> Are you? I think he's saying that no-one person can be better. Stock market crashed on 9-11. So what happened the next time the world had such a huge hit (Covid)? the markets rose because everyone was piling to get that same post-911 dip. It didn't exist because everyone that was expecting it caused the same to not happen. So I guess if you think you know what's going to happen next. You're probably 1 of a million…

Yeah, this is what I was thinking too. If there was a theory by which you could predict the outcome of the market, the mere presence of such a theory would affect the market such that the theory no longer applied. Sort of a Heisenberg Uncertainty Principle of Economics, but worse. ;-)

Re: Ask HN: How can I learn macroeconomics properly?

#116

Post by hnxs »

avvt4avaw wrote: post #106
shiredude95 wrote: post #87

Earlier quoted context omitted.

in other words dca is the most effective strategy for your average investor?

No. Invest everything that you can now (into low cost diversified index funds or ETFs) and then top it up regularly as you get more capital from whatever else it is you do to earn a living (e.g. a percentage of your salary every month, a percentage of your annual bonus, a percentage of the annual dividend from your business etc etc).

Do you have any recs? I currently use VTWAX, VTIAX, and VTSAX as my index funds. Even split between all three. I would appreciate any recommendations on what to change in terms of allocation.

Re: Ask HN: How can I learn macroeconomics properly?

#117

Post by goodpoint »

SantalBlush wrote: post #83
mikewarot wrote: post #41

Economics is an arena full of entrenched interests who exploit information asymmetry and regulatory capture to compete, at multiple scale factors. It is my strongly held opinion that rational analysis of "Economics" is not possible. You've got the global scale, where nations compete, best described by Beau of the Fifth Column as a game of poker where everyone cheats to gain power. You've got the corporate scale, wher…

Most of what you've described here is about politics and finance, not economics. Econ has pretty much nothing to do with sitting on a board or high-frequency trading. HN is full of users who don't know what econ is but want to explain how wrong it is to one another. It's like a parody of itself.

More like:

HN is full of users who don't know what $thing is but want to explain how wrong it is to one another.

(Having said that, Economics is still quackery)

Re: Ask HN: How can I learn macroeconomics properly?

#118

Post by landemva »

TimJRobinson wrote: post #11

https://youtu.be/NVnbFQjqh5o is a good overview - Raoul Pal really knows his stuff

He seems to say enough stuff that some of it ends up being correct. He seemed to be wildly wrong on timeframes of some calls.

https://www.reddit.com/r/investing/comments/geztt6/why_do_pe...

Re: Ask HN: How can I learn macroeconomics properly?

#119

Post by topaztee »

avvt4avaw wrote: post #74

I'm a professional investor (more than a decade of experience at hedge funds, particularly in global macro and quant, managing my own and other people's money). Your central premise is flawed -- in particular > Last 3 years has shown that to be a good investor you need to know macroeconomics This is not true. It is true that 'macro' events (central bank actions, supply/demand shocks, wars, pandemics) affect prices, b…

can you expand on this? `Simply buy a diversified set of investments in a tax-efficient wrapper for a total cost of < 10 basis points annually,`

Re: Ask HN: How can I learn macroeconomics properly?

#120

Post by nickff »

topaztee wrote: post #119
avvt4avaw wrote: post #74

I'm a professional investor (more than a decade of experience at hedge funds, particularly in global macro and quant, managing my own and other people's money). Your central premise is flawed -- in particular > Last 3 years has shown that to be a good investor you need to know macroeconomics This is not true. It is true that 'macro' events (central bank actions, supply/demand shocks, wars, pandemics) affect prices, b…

can you expand on this? `Simply buy a diversified set of investments in a tax-efficient wrapper for a total cost of < 10 basis points annually,`

I believe the parent is suggesting that people buy broad-market exchange-traded funds (ETFs) in whatever type of account is most tax-efficient.
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