Managing money for rich families AMA

[DarkRange55]

I've worked in finance in investment banking, hedge fund, prop trader, venture capital and family offices (A family office basically a group of the best of the best wealth management advisors and traders to deal with everything). Plus commercial real estate brokerage specializing in hotels. And some other jobs. My family also uses a family office.

 

[scottyy]

How should one invest $10,000? Lets say the person is willing to invest all of it

 

[DarkRange55]

How should one invest $10,000? Lets say the person is willing to invest all of it

I know it's boring and not sexy or exotic advice like you probably want to hear but honestly? Roth IRA in broadly diversified low-cost index funds like VT or VOO. Buy and hold.
There have been dozens and dozens of studies done on this. It's the safest and most tax efficient method.

Don't mess around with options or picking individual stocks unless you want to gamble or speculate (there is a difference).

At my old job I'd present one idea a week. Between screening and a deep fundamental dive it would take between 30-50 hours per company depending on how complicated the business was. I think technical analysis is near meaningless - like chart reading, which doesn't work. And chart reading comes with all kinds of indicators like Bollinger Bands and stochastic and Fibonacci numbers and moving averages, all of which don't work but there is some use to them. In terms of looking at the chart and seeing where the stock has been over the last week and seeing how it's been moving.
On stock picking, it's almost never worth it unless it's your full time job and even then only some are actually good at it.

I know I will catch flak for this but don't buy gold and silver. I used to be a goldbug and there is tons of empirical data and research on this, too.

Also try your best to DCA (dollar cost average) every year. It will compound over time.

How should one invest $10,000? Lets say the person is willing to invest all of it

Depending on your age, you may not need bonds right now. Stocks will likely return a lot more over a 30 year time period. You don't really need bonds if you have a very long time horizon. But if you need money and you need it soon you should 100% either be in short term really safe bonds or if you're in the US in an FDIC insured bank account. Theoretically, you want some type of cushion to guarantee to generate income in retirement if the market is flat for a few years like how the Nikkei was in the 1990's. When I get older is probably have a couple years of expenses in something like the iShares 0-3 Monthly Treasury Bond ETF. It barely fluctuates even with interest rates going crazy. It fluctuates because when they pay out the interest rate to the holders it drops by the amount payed out. For short term federal government debt its not very volatile. The first risk is that you hold too many bonds too soon. The longer the duration of the bond the longer the average bond takes to mature the more sensitive it is to interest rate risk. It turns out that stock and bond prices are actually not inversely correlated. US federal government bonds are probably safe as it gets besides FDIC insurance. Treasuries can also be tax inefficient.

Don't worry about hedge funds and exotic alternative asset classes. Just have the temperament and stomach for the market to fluctuate in the short-term. A year is not long-term in the investment world.

 

[Seiko]

Invest in VTI, VT, VOO, etc. Hold it forever. Upon retirement, live off dividends and/or withdraw 3% per year. Anything wrong with this plan?

 

[sserafim]

What exactly is speculation? I took the Big Brain Academy test on Wii a long time ago and it gave me speculator for career based on my brain type. And btw, how rich are these families?

 

[DarkRange55]

Invest in VTI, VT, VOO, etc. Hold it forever. Upon retirement, live off dividends and/or withdraw 3% per year. Anything wrong with this plan?

Super solid, especially if you can do it through a tax advantaged account like a Roth IRA or 401K
True Boglehead philosophy

What exactly is speculation? I took the Big Brain Academy test on Wii a long time ago and it gave me speculator for career based on my brain type. And btw, how rich are these families?

A speculator is an individual or entity that engages in the practice of speculating, which involves making high-risk investments in the financial markets with the expectation of making a profit. Speculators typically buy and sell assets such as stocks, currencies, or commodities in the hope of capitalizing on short-term price fluctuations. Speculators often take on higher levels of risk compared to traditional investors in pursuit of potentially higher returns.
A lot of people have made fortunes speculating on land for example.
Speculation is distinct from investing and gambling (even though most people will say it's not).
Gambling vs speculation: chance vs patterns and variance.

 

[Ferdinand Bardamu]

Are you Jewish?

 

[DarkRange55]

Are you Jewish?

Maybe a Rothschild

 

[no-name9859472882]

I'm able to make 60-200% on my money every week just using volume profile and orderflow on book map how come hedge funds don't do this too feels like 99% of hedge fund managers don't beat the snp500 cuz they don't have the balls to really trade vs buy a blue chip and milk "management fees"

 

[DarkRange55]

I'm able to make 60-200% on my money every week just using volume profile and orderflow on book map how come hedge funds don't do this too feels like 99% of hedge fund managers don't beat the snp500 cuz they don't have the balls to really trade vs buy a blue chip and milk "management fees"

1. Most hedge funds don't beat the S&P consistency. Being able to beat the market in a year or during a bull market doesn't mean anything. Doing it for 30-40 years consistently in any market would be significant. Like Buffett.
2. There are different types of hedge fund strategies. Some use HFT, some are quantitative, ect. When I was a prop trader (not with HF) You learned about ECN's electronic communication networks that allow you to bypass the specialist and get your orders filled quicker and allow you to had these arbitrage opportunities. You learn about technical analysis which is like chart reading, which doesn't work. And chart reading comes with all kinds of indicators like Bollinger Bands and stochastic and Fibonacci numbers and moving averages, all of which don't work but there is some use to them. In terms of looking at the chart and seeing where the stock has been over the last week and seeing how its been moving. And you sort of have to go on gut instincts. But just going on technical chart absolutely does not work. You learn fundamental analysis which is analysis of a stock based on its numbers as a business. I'll tell you something, traders never look at a balance sheet. The only stuff you pay attention to on the fundamental side is product launches, earning reports, trial results especially like big pharma like a stage 2 trial. Mergers and acquisitions, product recalls any big news that's gonna effect the bottom line. When that comes out it means that stock is gonna be in play. It's gonna be hot for the next 2 or 3 days. We learned high frequency momentum training, what became my primary style and most of the guys there. You hear that term around a lot. Michael Lewis who wrote Flash Boys writes about it to some degree. Basically it was momentum style trading. And at its simplest you just trade based on what you feel the stock is gonna do. Just gut trading based on patterns that you've seen 1,000's of times before. The way we were taught was to scalp, make 1-3 cents a trade and average 300 or 400 trades per day and put all your buying power ($3 million per person) into each trade and try to make 1-3 cents on it. And you can make a ton of money that way. It is a stressful way to trade but it was a very profitable niche for the company at that time. We also learned how stocks move. The momentum of every stock is different and its almost like every stock has a personality. So the high volume low priced stocks like Ford aren't gonna move much whereas the midrange high volume stocks like Texas Instruments would have decent movement. I'm not sure how those stocks move now, this was back in the day. You've got the high priced high volume stocks like Exxon which had crazy movement, Exxon was very hot in 2006. But you know would rip your face off if you fucked up. You have to be very careful with those volatile stocks. But if you could master them, that was where the best money was at. We learned some other systems of trading, one was called rebates, rebate trading. Which was basically you sit on the ECN and the ECN offers you money for delivering liquidity. So you sit on the bid and offer and you make even trades and you just rack up the rebates and I knew guys that were making six figures a year just sitting making even trades and making money on the rebates they got from the exchanges. Finally there was what was called dark pool trading. Which has become much more prevalent today. Basically dark pool is like an invisible market for institutional clients who want to unload a large amount of shares without moving the market drastically so if you're trying to unload a billion dollars worth of stock you're gonna move the market very far against you, you could move the stock 3 or 4 dollars by the time you get out of your position. With each batch of shares that you sell you're pushing the stock further away and increasing the amount you have to pay. So the dark pool was designed for institutions or large companies to sell large blocks of shares to a buyer who's interested in buying a large block of shares outside of the actual market anonymously. And the buyer would get it at a discounted rate but the market wouldn't move $3-4. These are usually priced 30 cents out. We had a girl in Israel making a million dollars off of basically just poking around the outskirts of a stocks. Bidding and offering 30-40 cents out, finding one of these dark pools and then arbitraging it between the market rate and the dark pool rate. And once you hit one of those dark pools you knew you were gonna make 3-4-5 $6,000 within a few minutes. When it was new it was totally unregulated and it was crazy the amount of money that people were making on that.
3. It really depends. There are amazing hedge fund and private equity funds that can generate way better returns than an index funds, but there are also ones that underperform. That's why it important that, if you are investing in private equity and hedge funds, that you really do your diligence on the manager and you still diversify. The bulk hedge funds of profit in a hedge fund goes to the manager. A lot of their clients think they will make more but they are not sophisticated investors.
4. I think they are popular because there are a few brand names that exist that put up decent returns which then gets other investors excited and starts the frenzy. Returns have not been that amazing with a few notable exceptions and it is a very expensive way to invest.
5. Black out your private info and show us your financial statements. Then proceed to consistently beat the market for 30 years. It's possible but risky and difficult.

 

[no-name9859472882]

This was informative, im familiar with alot of the tactics you described but is fishing for dark pools still a valid strategy what tools do you reccomemd if so?

Also didn't they stop doing hft trading because of all the illegal spoofing?


Yeah ta dosent work I only like supply and demand because it's hard to institutions to hide volume by price but I geuss if they do it through dark pool they could? Could someone just get access to the dark pool data and use it to find the orders and skimp off them?

 

[DarkRange55]

This was informative, im familiar with alot of the tactics you described but is fishing for dark pools still a valid strategy what tools do you reccomemd if so?

Also didn't they stop doing hft trading because of all the illegal spoofing?


Yeah ta dosent work I only like supply and demand because it's hard to institutions to hide volume by price but I geuss if they do it through dark pool they could? Could someone just get access to the dark pool data and use it to find the orders and skimp off them?

HFT is still going on.

https://www.reuters.com/business/finance/us-exchanges-defeat-high-frequency-trading-lawsuit-2022-03-28/

When I was a prop trader it was before I worked in a hedge fund. I left my boring-ass clerk job (I was a commercial currency broker). Originally the firm was founded by these two crazy guys that made a fortune in the early days of internet porn, specifically gay porn. These were straight guys who realized gay porn was gonna be a huge moneymaker and they made millions. And then they figured the next hot thing was gonna be day trading around 1999-2000 and the original model was that they would offer leverage and a trading platform and lower execution for guys who were gonna trade their own money. That worked well for a while until the dot-com bubble burst and all their traders went bankrupt or had to get real jobs. So what they then did was build a system where guys didn't have to put up any money. And they keep 50% of what the guys earn. They got a huge clearing house and they set up a bunch of branches. They let anyone in the world start a branch for $100,000 and 50% of the profits. In return you get access to the company software, company training, the very cheap trading fees and the massive leverage. So you hire 100 guys and you're able to give each of them $500,000 - a million dollars in leverage. The amount of leverage that these guys had was massive, massive, massive, massive. A typical prop shop is outside of the financial system.

Once our arbitrage and momentum strategies dried up I tried for at least 6 months to build a trading system. And I couldn't make it happen. Because we weren't allowed to hold overnight positions and therefor any type of trading system, I needed at least a multi-week or multi-month system because the fees and the slippage would hurt me. I don't know if you know what slippage is but its where you're looking at the chart patterns and because you're not gonna be able to get out at the price you want, you're gonna take a 3-4 cent loss on each side. And that slippage hurts you when you're trading everyday doing intraday trading. But slippage on a three month trade where you have so much more room to work with 3 cents here, 3 cents there is not a big deal. But of course the liquidity that we had was based from the brokerage house knowing that we had to be out our positions every singe day and we couldn't take longer term positions so I could never get $3 million buying power. Right now I could put together a trading system that did, I don't know, 15% maybe for a certain period of time but again if you don't have that $3 million in buying power that I had its worthless on its own. Especially when I could spend $300 on releasing a book and have that margin returned to me in literally under a day. So eventually I had to realize I couldn't make it happen without an edge. And our edges had dried up when the NYSC went to hybrid markets, started trading like the NASDAQ, we couldn't arb between the ECNs and the specialist, we couldn't see how the orders flow because there's no specialist anymore. It was just running off algos and stuff like that.

Most guys would have two screens, there would be one with 8 stocks, the level twos and then another screen with charts for those stocks. And then some guys would have the third screen, we're playing online poker. So they're in seven or eight trades, they're watching the level twos for those trades, they're watching the stock patterns to see about new trades and new stocks. And then they're playing fucking online poker in two or three different rooms at the same time!

There was 1,000s of guys that came through the door. 90% of them never made it from trainee to trader. And the guys who did make it to trader probably 80% never made more than 25-30 grand in a year. But no one is making trading money now, no one is still trading. Trading now is about algorithms, its about PhD's programming algorithms, all our edges are long dead. Or its about guys like Stephen Cohen from the SEC who has all his traders tapped into legal and illegal insider information, stuff like getting broker first calls and knowing when orders are being dumped and lightning-fast execution and fiber optic cables directed directly into the market, the office right next door to the NYSC so you have a half second faster than everyone else and all kinds of things that aren't available to you unless you work for those companies. And these are professionals, these are not guys E-trading or forexing at home with their little $10,000 they've been saving up. I'm talking about professionals, I had $3 million, the top guys had $10 million to play with everyday.

Seeing dark pools in real time as a retail investor for free, I don't believe so. But I haven't been in trading for a while institutionally.
I've been playing about 3 years and 150% profit cumulative on the Korean stock market, for example but that's outside of work.
If you'd like I dan ask some friends and family that still work in that space and get some more details. LMK

 

[noname223]

I've worked in finance in investment banking, hedge fund, prop trader, venture capital and family offices (A family office basically a group of the best of the best wealth management advisors and traders to deal with everything). Plus commercial real estate brokerage specializing in hotels. And some other jobs. My family also uses a family office.

To be honest always when I read your posts I am sort of impressed. You have a lot of detailed knowledge combined with a very high intelligence it seems. That job fits to you.

A bank account once wanted to sell me a horrendous retirement plan that would have ruined me. At least I am smart enough not to buy into something like that. She wanted to sell me a special retirement plan only available at this bank and this was a big red flag because the accountant gets the biggest bonus for such a contract. Moreover she told that ETFs would be horrible which was another sign that b*tch was lying to me.

 

[sserafim]

How do you think that AI will impact this field? Will AI replace people in it? Or will AI be combined with human judgement and used as a tool instead? Can you trust AI's predictions? Are they accurate?

 

[DarkRange55]

This was informative, im familiar with alot of the tactics you described but is fishing for dark pools still a valid strategy what tools do you reccomemd if so?

Also didn't they stop doing hft trading because of all the illegal spoofing?


Yeah ta dosent work I only like supply and demand because it's hard to institutions to hide volume by price but I geuss if they do it through dark pool they could? Could someone just get access to the dark pool data and use it to find the orders and skimp off them?

There are different kinds of traders: at the top are big hedge funds people like George Soros the masters of the universe, next is mutual funds then banks which themselves employ different types of traders "props", brokers, "quants." The next category is personal traders basically people that use E-Trade. This is the worst class of traders on the planet. They basically send their money to Wall Street for George Soros and Warren Buffet to get richer. They loose money 99% of the time because they have no information, huge trading fees & very little money to be played with. They are the sheep to be sheared. Because money has to come from somewhere. Next up, you have the market makers. These guys facilitate the order flow of a stock on NASDAQ, you will have major banking houses like Barkley PLC that will handle the order flow where as on the NYC you're gonna have the specialist who works directly for the NYC in the pit handling the majority of the order flow. Although a lot of that order flow has been moved online with the hybrid market. So that group's scope of influence has become a lot more limited. The job of the market maker is really just to maintain an orderly market. Then you have the quant traders or quantitative traders. These are guys with rocket scientist IQ's who decided to make money instead of withering away in academia. Basically these guys work for banks or hedge funds and they build complex algorithms to arbitrage tiny price discrepancies. And its people like that put everyone else out of business.

To be honest always when I read your posts I am sort of impressed. You have a lot of detailed knowledge combined with a very high intelligence it seems. That job fits to you.

A bank account once wanted to sell me a horrendous retirement plan that would have ruined me. At least I am smart enough not to buy into something like that. She wanted to sell me a special retirement plan only available at this bank and this was a big red flag because the accountant gets the biggest bonus for such a contract. Moreover she told that ETFs would be horrible which was another sign that b*tch was lying to me.

Brokers are not traders. Boiler Room, Wall Street, The Wolf of Wall Street these are movies about brokers, not traders. Brokers are salesmen. They are now called advisors but their job is to take as much of their clients money as possible in commissions. If their client makes money on the deal its just a bonus. A trader has to make money by making the right call on the market, and putting his money where his mouth is. The broker does not take the same position as the client. They just get payed when they sell a stock to a client.

Some ETF's are bad because are limited to clown stocks and have high expense ratios.

But yeah, most financial advisers are salesmen, especially at banks. They want to put you into garbage because they get commission selling those to clients. I worked at a mutual fund and three of the five floors were dedicated to marketing.



I'm very glad to hear you didn't fall for that! It can cost you dearly!

To be honest always when I read your posts I am sort of impressed. You have a lot of detailed knowledge combined with a very high intelligence it seems. That job fits to you.

A bank account once wanted to sell me a horrendous retirement plan that would have ruined me. At least I am smart enough not to buy into something like that. She wanted to sell me a special retirement plan only available at this bank and this was a big red flag because the accountant gets the biggest bonus for such a contract. Moreover she told that ETFs would be horrible which was another sign that b*tch was lying to me.

Also thank you, that is very flattering but I wish I was intelligent haha

 

[no-name9859472882]

HFT is still going on.

https://www.reuters.com/business/finance/us-exchanges-defeat-high-frequency-trading-lawsuit-2022-03-28/

When I was a prop trader it was before I worked in a hedge fund. I left my boring-ass clerk job (I was a commercial currency broker). Originally the firm was founded by these two crazy guys that made a fortune in the early days of internet porn, specifically gay porn. These were straight guys who realized gay porn was gonna be a huge moneymaker and they made millions. And then they figured the next hot thing was gonna be day trading around 1999-2000 and the original model was that they would offer leverage and a trading platform and lower execution for guys who were gonna trade their own money. That worked well for a while until the dot-com bubble burst and all their traders went bankrupt or had to get real jobs. So what they then did was build a system where guys didn't have to put up any money. And they keep 50% of what the guys earn. They got a huge clearing house and they set up a bunch of branches. They let anyone in the world start a branch for $100,000 and 50% of the profits. In return you get access to the company software, company training, the very cheap trading fees and the massive leverage. So you hire 100 guys and you're able to give each of them $500,000 - a million dollars in leverage. The amount of leverage that these guys had was massive, massive, massive, massive. A typical prop shop is outside of the financial system.

Once our arbitrage and momentum strategies dried up I tried for at least 6 months to build a trading system. And I couldn't make it happen. Because we weren't allowed to hold overnight positions and therefor any type of trading system, I needed at least a multi-week or multi-month system because the fees and the slippage would hurt me. I don't know if you know what slippage is but its where you're looking at the chart patterns and because you're not gonna be able to get out at the price you want, you're gonna take a 3-4 cent loss on each side. And that slippage hurts you when you're trading everyday doing intraday trading. But slippage on a three month trade where you have so much more room to work with 3 cents here, 3 cents there is not a big deal. But of course the liquidity that we had was based from the brokerage house knowing that we had to be out our positions every singe day and we couldn't take longer term positions so I could never get $3 million buying power. Right now I could put together a trading system that did, I don't know, 15% maybe for a certain period of time but again if you don't have that $3 million in buying power that I had its worthless on its own. Especially when I could spend $300 on releasing a book and have that margin returned to me in literally under a day. So eventually I had to realize I couldn't make it happen without an edge. And our edges had dried up when the NYSC went to hybrid markets, started trading like the NASDAQ, we couldn't arb between the ECNs and the specialist, we couldn't see how the orders flow because there's no specialist anymore. It was just running off algos and stuff like that.

Most guys would have two screens, there would be one with 8 stocks, the level twos and then another screen with charts for those stocks. And then some guys would have the third screen, we're playing online poker. So they're in seven or eight trades, they're watching the level twos for those trades, they're watching the stock patterns to see about new trades and new stocks. And then they're playing fucking online poker in two or three different rooms at the same time!

There was 1,000s of guys that came through the door. 90% of them never made it from trainee to trader. And the guys who did make it to trader probably 80% never made more than 25-30 grand in a year. But no one is making trading money now, no one is still trading. Trading now is about algorithms, its about PhD's programming algorithms, all our edges are long dead. Or its about guys like Stephen Cohen from the SEC who has all his traders tapped into legal and illegal insider information, stuff like getting broker first calls and knowing when orders are being dumped and lightning-fast execution and fiber optic cables directed directly into the market, the office right next door to the NYSC so you have a half second faster than everyone else and all kinds of things that aren't available to you unless you work for those companies. And these are professionals, these are not guys E-trading or forexing at home with their little $10,000 they've been saving up. I'm talking about professionals, I had $3 million, the top guys had $10 million to play with everyday.

Seeing dark pools in real time as a retail investor for free, I don't believe so. But I haven't been in trading for a while institutionally.
I've been playing about 3 years and 150% profit cumulative on the Korean stock market, for example but that's outside of work.
If you'd like I dan ask some friends and family that still work in that space and get some more details. LMK

Yeah I'd be interested I gotta say as a trader myself im impressed with your knowledge base.

So if algos control everything and your edge is dead how do you make money now?

Also why do u wanna ctb sounds like your apart of the 1%

 

[DarkRange55]

Yeah I'd be interested I gotta say as a trader myself im impressed with your knowledge base.

So if algos control everything and your edge is dead how do you make money now?

Also why do u wanna ctb sounds like your apart of the 1%

Well, thank you but I'm sure that's just because I tried to hang around people that know a lot more than I do and that's the one benefit of having had so many different jobs. It's just all the knowledge that you pick up and accumulate.

How do I make money? Trading, investing or work-wise?

My dad's side of the family are literally all billionaires and mega/multimillionaires making tens of millions of dollars a year at least. Very old money. A lot of my cousins are high-level on Wall Street and that sort of thing. I feel like the term one percent might be a misnomer because I think if I remember correctly that's something like 250,000 a year or 500,000 a year and realistically even the people in the .6% which I believe is 1 million a year. These statistics might be outdated because I haven't looked at this in a number of years, but even those aren't the people running the world and calling all the shots.
I don't want to ctb, honestly. I'm sure I'm in the 1% minority on this forum haha

I'll try to ask around this weekend and next week on dark pools.

 

[sserafim]

Why do stocks and the stock market exist? How exactly does the stock market work? A stock is a share of a company right? So when you buy a stock you invest into the company? What determines the price of stocks? Why are they always fluctuating? How can the prices of stocks change so much? Why is the economy so dependent on the stock market? In a stock market crash, what exactly happened to make it crash?

Economics and the stock market always seemed interesting to me because so many factors influenced it. There seem to be no clear rules.

 

[Homo erectus]

Is King Charles dying? Is his health condition due to natural causes or foul play? Baron Jacob Rothschild just died. Are these events related?

 

[DarkRange55]

Why do stocks and the stock market exist? How exactly does the stock market work? A stock is a share of a company right? So when you buy a stock you invest into the company? What determines the price of stocks? Why are they always fluctuating? How can the prices and value of stocks change so much? Why is the economy so dependent on the stock market? In a stock market crash, what exactly happened to make it crash?

Economics and the stock market always seemed interesting to me because so many factors influenced it. There are seem to be no clear rules.

Equities trading is defined by buy and selling shares in publicly traded companies. The first exchange was opened in Belgium in 1531. But it wasn't until the 1600's when the British, Dutch and French governments gave charters to the East India Company so they could pillage with the full confidence of the king behind them.

"In the short run, the market is a voting machine but in the long run, it is a weighing machine."
- Benjamin Graham

I will have to take some time to actually respond to this in depth and unpack this, because that's a lot of questions that require answers at the fair amount of length.

 

[sserafim]

Equities trading is defined by buy and selling shares in publicly traded companies. The first exchange was opened in Belgium in 1531. But it wasn't until the 1600's when the British, Dutch and French governments gave charters to the East India Company so they could pillage with the full confidence of the king behind them.

"In the short run, the market is a voting machine but in the long run, it is a weighing machine."
- Benjamin Graham

I will have to take some time to actually respond to this in depth and unpack this, because that's a lot of questions that require answers at the fair amount of length.

Oh okay thanks. Another one of my question is what determines the value of a currency? And what determines the price of something? It seems that prices are always rising these days for the same items, everything is getting more and more expensive. Also, what happens in cases of inflation and hyperinflation? What happened to make millions of marks worthless?

 

[DarkRange55]

Oh okay thanks. Another one of my question is what determines the value of a currency? And what determines the price of something? It seems that prices are always rising these days for the same items, everything is getting more and more expensive. Also, what happens in cases of inflation and hyperinflation? What happened to make millions of marks worthless?

I can quickly answer the currency question but the inflation one will take time to formulate a detailed response because it's fairly complex.
Also I risk invoking the wrath of the anarchists and keynesian Economists and goldbugs (which I used to be but now I only buy golden silver coins to collect them for the numismatics)

 

[DarkRange55]

Oh okay thanks. Another one of my question is what determines the value of a currency? And what determines the price of something? It seems that prices are always rising these days for the same items, everything is getting more and more expensive. Also, what happens in cases of inflation and hyperinflation? What happened to make millions of marks worthless?

What determines the strength of a country's currency: Supply and demand, the interest rates of each country, the trade balance of each country, and the perceived stability of the currency and the governments. Plus economic factors like higher oil prices, which helps the Canadian dollar or Bahrain dinar for example. The dollar is often seen as a Safehaven currency. Sometimes the yen is too, so during troubling economic times, investors and central banks, can pile into other currencies, like the dollar or the yen. Rates of inflation can also affect the value of a currency by how much of it is in circulation, but again that's really more about turnover rate, so the velocity of money. But an example of the extreme end would be like Zimbabwe or Weimar, Germany, and an example on the opposite end, would be like the deflation experienced during the Great Depression in the US or how the yen has such a low rate of inflation right now.

All above Fx = f(economic and political health of country and BOP balance of payments)

you are getting into Balance of Payment issues, basic international economic and BOP very important to smaller countries with fewer reserves -- the why of IMF

The US dollars is also in a unique position with petrodollars, and being the basis of trade with so much dollar denominated debt issued in other countries.
You have the world reserve currencies of which the dollar is by far the largest. Depends on economic performance..,short term yes and then?
Yes that is being challenged and the future is likely the dollar and Chinese yuan, but not yen and euros.

 

[sserafim]

What determines the strength of a country's currency: Supply and demand, the interest rates of each country, the trade balance of each country, and the perceived stability of the currency and the governments. Plus economic factors like higher oil prices, which helps the Canadian dollar or Bahrain dinar for example. The dollar is often seen as a Safehaven currency. Sometimes the yen is too, so during troubling economic times, investors and central banks, can pile into other currencies, like the dollar or the yen. Rates of inflation can also affect the value of a currency by how much of it is in circulation, but again that's really more about turnover rate, so the velocity of money. But an example of the extreme end would be like Zimbabwe or Weimar, Germany, and an example on the opposite end, would be like the deflation experienced during the Great Depression in the US or how the yen has such a low rate of inflation right now.

All above Fx = f(economic and political health of country and BOP balance of payments)

The US dollars is also in a unique position with petrodollars, and being the basis of trade with so much dollar denominated debt issued in other countries.
You have the world reserve currencies of which the dollar is by far the largest. Yes that is being challenged and the future is likely the dollar and Chinese yuan, but not yen and euros.

What exactly happens during inflation and deflation though? You mentioned oil prices so that got me thinking: why are gas prices always changing? Supply and demand? I don't understand how the price of something can change so much…

 

[DarkRange55]

What exactly happens during inflation and deflation though? You mentioned oil so that got me thinking: why are gas prices always changing? Supply and demand? I don't understand how the price of something can change so much…

I guess misspoke about what my cousin studies in economics at Harvard as a researcher and professor. It is not real estate, so I apologize to that one user for that. But he actually specializes and teaches a course in energy markets. So if you'd like, I can attach a bunch of slides and information on that. But it will have to be a little bit later today since I am currently busy at the moment, and I have to go through all of my emails from him to find it.

Secondly, is your questions about inflation and deflation separate from gas prices?
You also have things like stagflation and greedflation and shrinkflation and reflation and price gouging and Excuseflation and skimpflation and wageflation and others…

 

[sserafim]

How do I make money? Trading, investing or work-wise?

I don't want to ctb, honestly. I'm sure I'm in the 1% minority on this forum haha

All ways.

Lol why are you on the forum then

 

[DarkRange55]

All ways.

Lol why are you on the forum then

I'm a ninja assassin …for the government — it's a day job.

 

[sserafim]

I'm a ninja assassin …for the government — it's a day job.

Lmao. Wait btw, what's the difference between a mutual and index fund? I have a Roth IRA and deposited $6000 into it. I didn't use all of it to buy the shares of the fund though (I forgot if it was index or mutual, I'll have to check). I still have like $3000 in the account which I didn't invest. Should I invest the remaining money?

 

[DarkRange55]

What exactly happens during inflation and deflation though? You mentioned oil prices so that got me thinking: why are gas prices always changing? Supply and demand? I don't understand how the price of something can change so much…

*teaches a course on energy and oil markets. Simply put it is complicated. Yes very much supply stuff / storage snd individual markets/infrastructure ( pipelines and tankers)... will post some presentations for you

gold / currency was a fixed back (and price) exchange rate before currency / floating dollars. So a central bank control mechanism. back when more controls. part of response to bank runs -- before Fed in 1913 and floating rtes in 1971

What exactly happens during inflation and deflation though? You mentioned oil prices so that got me thinking: why are gas prices always changing? Supply and demand? I don't understand how the price of something can change so much…

What exactly happens during inflation and deflation though? You mentioned oil prices so that got me thinking: why are gas prices always changing? Supply and demand? I don't understand how the price of something can change so much…

IWhat exactly happens during inflation and deflation though? You mentioned oil prices so that got me thinking: why are gas prices always changing? Supply and demand? I don't understand how the price of something can change so much…
I have a cousin who is currently a managing Director at one of the largest family offices, basically an investment company for super rich people so she manages Mark Zuckerberg's money among a bunch of other people and before that when she was getting her MBA at Wharton (Ivy League) she worked at Chevron in the gas, exploration, division, something like a corporate something rather I forgot her exact title before that she was a vice president at Morgan Stanley, and before that she was an analyst of the hedge fund. So she would probably be a much better person to ask lol

*teaches a course on energy and oil markets. Simply put it is complicated. Yes very much supply stuff / storage snd individual markets/infrastructure ( pipelines and tankers)... will post some presentations for you

gold / currency was a fixed back (and price) exchange rate before currency / floating dollars. So a central bank control mechanism. back when more controls. part of response to bank runs -- before Fed in 1913 and floating rtes in 1971













































IWhat exactly happens during inflation and deflation though? You mentioned oil prices so that got me thinking: why are gas prices always changing? Supply and demand? I don't understand how the price of something can change so much…

I have a cousin who is currently a managing Director at one of the largest family offices, basically an investment company for super rich people so she manages Mark Zuckerberg's money among a bunch of other people and before that when she was getting her MBA at Wharton (Ivy League) she worked at Chevron in the gas, exploration, division, something like a corporate something rather I forgot her exact title before that she was a vice president at Morgan Stanley, and before that she was an analyst of the hedge fund. So she would probably be a much better person to ask lol

Sorry, speak to text. Kind of sucks sometimes.

 

[sserafim]

Lmao. Wait btw, what's the difference between a mutual and index fund? I have a Roth IRA and deposited $6000 into it. I didn't use all of it to buy the shares of the fund though (I forgot if it was index or mutual, I'll have to check). I still have like $3000 in the account which I didn't invest. Should I invest the remaining money?

.