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Kindle Notes & Highlights
by
Andrew Craig
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September 2 - September 22, 2020
‘smart beta’ funds. These aim to give you the low cost and breadth of a passive or tracker fund but with the improved performance you would hope to achieve with an active fund.
They do this by weighting the investments held within the fund using various clever metrics
you were to put £10,000 into a FTSE 100 tracker fund today you would end up with roughly £1,100 worth of Royal Dutch Shell,
The point is that ‘market cap weighted’ indices like the FTSE 100 (and S&P 500) mean that you end up with a much heavier exposure to big companies than
small ones.
This can be problematic for your performance because big companies, by their very nature, are ones that have already succeeded and gone up a great deal in price, while small companies, all other things being equal, are of...
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By owning a ‘normal’ tracker fund, you will very likely end up having far too much of your money exposed to companies that have already seen a huge uplift in their share price – and far too little of your mone...
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Smart beta funds attempt to get round these so...
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minnows
Over time, an equal weighted index of the FTSE 100 or S&P 500 may outperform a market cap weighted index.
Imagine someone selling £50,000’s worth of shares (as you will be doing in a few years’ time).
commission rates with an upper cap.
Today it is possible to buy and sell shares online for as little as £5.95
ETFs are almost all passive funds. You can buy an ETF based on the FTSE 100, on gold, on the Australian dollar, on the CAC 40, and so on and so on.
number of firms in the UK market with whom you will only have to pay £1.50 per transaction, if you set up regular automated monthly payments into certain funds or shares. The UK market has come a long way in the last few years in this respect, but this is something that only a tiny percentage of the population are taking advantage of.
If you know where to go, the difference between the best financial accounts and products available today and those of only a few years ago is like the difference between a sports car and a horse and cart.
open-ended investment companies (OEICs)
unit trusts.
the initial charge, the annual management charge (AMC), and the total expense ratio (TER) – now more frequently called the ongoing charges figure (OCF).
better financial advisers are actually able to get you into some funds more cheaply than you might be able to do yourself, as they are able to buy in bulk for their clients.
nomenclature
The great thing about the foreign exchange markets is that ‘there is always a bull market somewhere’.
One currency’s strength is, inherently, another currency’s weakness,
so, no matter what is happening in the world economically, there is always the chance to make money in the forex mark...
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spread betting,
trading foreign exchange can be quite complicated and is not for the faint-hearted.
simply owning assets from all over the world will give you useful exposure to a large number of the world’s currencies, without you having to worry about learning the ‘black magic’ of forex.
derivatives
Warren Buffett described them as ‘financial weapons of mass destruction’,
It is perhaps easiest to think of a derivative as a bet between two people about what the price of something will be in the future.
Iraq
single-entry bookkeeping
first became aware of bitcoin in about 2013
finance journalist and comedian Dominic Frisby. I
(there were several thousand additional suicides on both sides of the Atlantic following the dot-com crash of 1999/2000 and the financial crisis of 2008/9 – this should not be forgotten).
maelstrom
prosaic
In 2010 a software developer named Laszlo Hanyecz purchased two pizzas for 10,000 bitcoins. This was about $40 worth of bitcoin at the time. At the peak bitcoin price in December of 2017, the bitcoins he used to purchase those pizzas would have been worth not far off $200 million. Those are expensive pizzas.
Ponzi schemes
Warren Buffett has said: ‘Only when the tide goes out do you discover who has been swimming naked.’
haemorrhaged
Initial Coin Offering, or ICO.
it is not possible to use these fundamental valuation tools on crypto assets. They don’t have revenues, profits or balance sheets.
spurious
markets as tough as commodities, mining and resources, emerging markets and, more recently, biotech.
Much to the chagrin of the visionaries and techno-anarchists who hope that crypto will change the world by taking power away from elites, big corporates, central banks and governments, I suspect that those very elites, corporates, central banks and governments are likely to be the big winners in the space in the next few decades.
ownership of gold by private individuals was illegal in the USA from 1933 to 1974.
As ever, patience is a virtue and time is one of your biggest allies in investment.
Even now, the production and use of bitcoin alone uses about the same quantity of electricity per annum as the entire economy of Switzerland.
Lightning Network,
