Hello. I'm currently living in Germany. The main issue I see with discussing about the euro crisis and other economy topics is that I just don't understand our economic system. Its just seems to be a very complex topic. Also many people here seem to have the same issue.
I'm currently reading "The Lost Science of Money: The Mythology of Money - The Story of Power" (Stephen Zarlenga). I will review it, after I finished it. Also I'm concerned that the euro might be unstable -> so I would like to invest my current money (~10000 €, im student) somehow. Do you have any advice how I can get the knowledge to understand our economy system good enough to handle the future and not to be unprepared for a potential crisis?
ieatkids5 United States. May 28 2012 03:18. Posts 4381
Read a basic econ textbook, micro and macro. Then read a basic international economics textbook. Then read texts and journal articles on regional integration, free trade agreements, and currency. Then read more specific texts on the current Euro crisis.
It's tedious, but it will really solidify your understanding of the basics of econ, which are necessary to understand before moving on to more complex subjects. Everything builds on one another.
Kaitlin United States. May 28 2012 03:19. Posts 2192
First you must understand that "experts" disagree, so it's important to learn more than just one side of the story. That's pretty much the case in many areas.
You just asked a question about a field that has just as much contradictory "experts" as there are scientists who argue about global warming. Best bet is to take a few econ courses in a university and read a few books on how money flows from one area to another and you should be able to grasp enough to form your own opinions. Sorry but after taking a couple years in Econ I wouldn't know where to start
As for investing, there are plenty of ways to go about doing it, all contingent on how much risk you're willing to put up.
Personally I would recommend going into the stock market. Specifically investing in Chinese mining stocks as they have grown by roughly 15% a year, and expected to become even more bloated once their economy starts kicking off.
Alternatively, you can always put your money into gold and just sit on it. Either in a gold mining stock (my favorite is RIC - a Canadian gold mining company) or in tangible gold.
If you want low risk options - there is always IRA's and CD's. Interest is usually bit better than what you would get in a savings account, and your almost guaranteed roughly $1,000,000 in about 20-30 years. (Although the buying power might be weakened considerably).
If you're looking into real estate, you can just sit on your cash now and let it collect interest until you are able to put a down payment on a house - preferably a triplex. That way you can just rent out the other rooms you aren't using so you could essentially "live for free" while collecting a check every month. Low-risk and a generally good payout in the long-run.
Finally - though not recommended you could put all your cash into the Yen or other currency whose economy is growing strong. Then transfer that currency back to Euro's within a year or so - similar to how the stock market works only your dealing with countries rather then companies.
Last edit: 2012-05-28 03:33:24
"What a god awful thread post." - First reply to Nada's body thread
See.Blue United States. May 28 2012 03:33. Posts 2291
As a graduate student, I can tell you that even faculty at top universities have no idea how things work. We have a lot of very convincing theories, unfortunately the real world is messy and infinitely more complex. As a simple example I can cite off the top of my head two very well-known models of banking, one which says deposit insurance is a great thing, and prevents bank runs, and the other which says bank insurance is terrible and leads to all sorts of moral hazard issues (ala recent events). Both are true, but in reality, what does that mean we should do? How do we strike a balance? These are the concerns that matter.
BlindKill Australia. May 28 2012 03:35. Posts 1179
I think that economics is hard to understand is because it is made up of so many variables, some hidden some known. On a lot of issues there are always good and bad, benefits and disadvantages. It is dependant on the decision makers ideals, priorities and position.
Best way to learn econ is to be open-minded, learn the reasoning behind how the key variables work.
The utmost basics are : exchange rate and its relationship with jobs,imports/exports,inflation,GDP, interest rates growth and its relationship with inflation, employment, understanding scarcity,equilibrium, elasticity, competition, market inefficiencies
There is a notable gap between the ideals preached in academical economics and how empirical data perform so even when you arrive at a conclusion that makes sense you need to examine the assumptions that your theory are built on (scarcity, rational investor, barrier to entry, taxes, behavioral economics) as well as to what extent does your data explain the theory.
One of the more interesting concept I've read about is that the USD appreciates/appreciated during the GFC. Do some research on that and you would see how an economist provided a reasonable explanation.
“Life is a grindstone, and whether it grinds a man down or polishes him up depends on the stuff he's made of.”
babypips.com... Start from there. Currency trading is where it's at. Stocks might not last a year, as the average lifespan of a business is very short these days, and will only get shorter until the top dogs are left. Don't listen to anyone for advice, learn everything on your own. You need to understand fully what you are about to put your money into.
Also, one thing that does impact world econimcs is the position of our planets. Some really rich dudes at forexfactory.com post their analysis, which you can make your own system from. Really fucking neat stuff.
If you're concerned the euro might not be stable, then maybe look into betting against it.
Kaitlin United States. May 28 2012 06:30. Posts 2192
On May 28 2012 03:21 prplhz wrote: if anybody really understood world economics then i don't see why we're in such big trouble
i honestly think that politicians/economy experts are just winging it
This seems to be pretty spot on... On a large scale it is examplified by the crisis, on a smaller scale examplified by some of the experiments with investing where a professional would do worse than picking random stocks.
When using marketanalysis include flawed reasoning like "law of large numbers" I can understand why there is something wrong with the economy...
Edit: Sorry to be off topic. The best way to learn economy seems to be by learning advanced statistics and basic mathematical modelling. After that you are probably prepared to enter into the world of financial terminology.
Last edit: 2012-05-28 07:18:22
fast cheese is wrong. It should always be aged to gain some taste
BrTarolg United Kingdom. May 28 2012 07:25. Posts 2496
As a professional trader, the only advice i can give you is that pretty much everything in this thread is wrong, and don't try it ^_^
In general, those who get into investing or trading, many people actually do know ways of making money, but for some reason they just don't do it. For example, one simple way of trading is to invest more of your capital during the good times, when you can get maybe 10% safely and 20-30% with risk, and to not trade at all when you can only get maybe 0.5-2% safely (now) But of course, people don't really do that, they try their very hardest to make complex, risky investments to get a paltry 3-5% during these "tough times", and when the times get good they shrink up and just buy the safest asset possible to get their 5-10%. In general, this is just how people work, they do the exact opposite of what they are supposed to do.
---
My understanding of economics is pretty scarce, yet i still trade. My strategy can be summed up as buying things that are relatively cheap and selling things that are relatively expensive, and keep my risk at a reasonable level. Most people try to get caught up on whether things are going up or down, and that's where they make their mistakes generally. Personally, I care only a little about where price has been, and even less about where they are going to be next.
Don't take any of the trades or investments listed in this thread, I can at least tell you that much haha. GL
On May 28 2012 03:07 Meril wrote: Hello. I'm currently living in Germany. The main issue I see with discussing about the euro crisis and other economy topics is that I just don't understand our economic system. Its just seems to be a very complex topic. Also many people here seem to have the same issue.
I'm currently reading "The Lost Science of Money: The Mythology of Money - The Story of Power" (Stephen Zarlenga). I will review it, after I finished it. Also I'm concerned that the euro might be unstable -> so I would like to invest my current money (~10000 €, im student) somehow. Do you have any advice how I can get the knowledge to understand our economy system good enough to handle the future and not to be unprepared for a potential crisis?
In my opinion, reading something about Money is the worst thing possible to start studying economy. If there is something nobody agree about in economy, it's money... It's the hottest and most theoric subject there is, just forget about it for now and start by reading an introduction book, just to build yourself a broad view of what is economy and how there are almost no subject which almost all economists agree on.
I am a bit suprised nobody asked for what purpose he invests? for short winnings? long term winnings? for your life after working until minimum 67? Depending on your purpose, and individual risk personality there are different possibilities suitable.
Understanding economics isnt that hard, BUT what seems rational for you, is not necessarily rational for others, your goal may not be the goal of others. Most private/smaller traders (as already mentioned) focus on buying underrated and selling overrated, which will lead to gains, but you have to be able to tell which share for example may be underrated/overrated.
You have to learn the basic mathematical and statistical basics and develop a feeling for times like the opening of a stock or the behavior of traders during the end of the year etc etc. You have to gather reliable info and make use of em.
There is so much to take into account =)
Try reading: Multinational Business Finance by Eiteman ISBN-13: 978-0136121565
my career is a Tax Preparer here in America. I've always wanted to know how the German Tax system works or any of Europe's really. I've briefly looked into England's Taxes and how it works. any place that can show me the rest?
Sorry to thread derail if this is one.
On October 03 2011 Jinsho wrote: Everyone is just a speck of fly dirt on the wall compared to Greg playing at his best :D
Store
Heweree United Kingdom. May 28 2012 03:24. Posts 497
GnarlyArbitrage May 28 2012 04:51. Posts 575
