Market Cap to GDP – a Somewhat Overlooked Indicator

One way to check if the market cap of American publicly traded companies has not disconnected altogether from their real incremental value is comparing their market cap to the total GDP. This ratio can be used to understand whether the market is overvalued – in the U.S, the lion share of the companies are publicly traded, at least the big ones, thus we can expect to find a correlation between both the movement and the size of the stock market

Continue Reading

What’s the difference between stocks and poker?

When I first entered the stock market, I used to think I could beat it. I thought I could pick the best stocks and see the value of my account increasing every day, and this same feeling affects most people in the market. This is also what happens to most people at a poker table. Sometimes you just need to lose some money to get rid of your arrogance. The problem is that by listening to news from the stock

Continue Reading

The Power of Passive Investing

At the start of 2008, Warren Buffet made a million-dollar bet with the CEO of money management firm Protégé Partners. He bet on an index fund that invests in the S&P 500, while Protégé bet it could pick five “funds of funds” that would perform better. His side Warren Buffet’s thesis that the best thing a young man could do was to put his money in an ETF tracking the S&P 500 and just forget about the money. The compounding

Continue Reading

The Eighth Wonder

Compunding

Lacking financial literacy, many people are unaware of what might be the most important factor for increasing your own capital. It’s a term that Albert Einstein referred to as “the greatest mathematical discovery of all time” (and Albert Einstein knew something about math) and “the eighth wonder of the world.” If there is anything you need to know about finance, it’s Compound Interest (Compounding). But compounding is not just math or finance. It’s a more profound idea than it may seem

Continue Reading

Vocabulary for the Solid Investor

In the last few weeks, I have received some feedback saying that I have put the cart before the horse, and that some readers first need to understand the basic ideas and concepts of investing. I strongly believe in strengthening financial literacy, so I immediately thought about discussing important vocabulary terms for the new investor, who will hopefully become a solid investor. This discussion will not follow a strictly ABC approach but rather focus on the order in which a

Continue Reading

How will Robinhood affect your returns?

Robinhood is definitely a cool app. It is one of the fastest-growing apps these days, and when taking into account its particular field of financial services, its growth is even more impressive. Robinhood is a financial services company showing growth similar to that of an internet services company, with over 140K new subscriptions a month, and 17% monthly growth to their premium subscription. Robinhood is a disruptive company. It allows people to trade stocks with no fees. With this simple,

Continue Reading

Shit people (who don’t invest) say

They are everywhere around us. Some of my best friends are this way, and in this post I want to address all their sayings. All their clichés. I’m talking about people who don’t invest. People who have strong feelings about the stock market or don’t have any feelings about it at all. Some of them are just being lazy, but some are doing it out of principle. Let’s dig into their characters. Types of non-investors The lazy—He intends to invest.

Continue Reading

Thematic ETFs — What are they good for?

An exchange-traded fund, known as an ETF, has become increasingly popular over the last few decades. Born in the early 90’s, an ETF is a financial vehicle traded in stock exchanges and tracks the index it covers. For example, some ETFs track the S&P 500, and ETF shares are traded in accordance with the index, replicating the return of the index. The Thesis Stocks exchanges have a long history. Some argue that a stock market even existed in ancient Rome,

Continue Reading

San Francisco vs. the NASDAQ

 “Real Estate Prices have gone nuts! The prices are insane!” Real estate prices are a major topic everywhere you go. Home prices have skyrocketed in recent years, becoming out of reach for most young people. The price-to-income ratio in Los Angeles and San Francisco is now approximately 10, which means that if you work ten years, earn the average salary of a person living in one of those cities, and save all of it, you would be able to buy a house at the end

Continue Reading

Site Footer

Sliding Sidebar

Never Miss a Post!