If I can, I don’t want to talk to you about emotions anymore. I want to talk to you about money, credit, interest rates, exchange rates, and inflation.
Then I’ll talk to you about assets, liabilities, equity, income, expenses, and profit.
Then I’ll talk to you about stocks, bonds, funds, derivatives, futures, options, and swaps.
Then I’ll talk to you about primary issuance, secondary trading, market makers, liquidity, volatility, and arbitrage—beta coefficients, alpha returns, the Sharpe ratio, maximum drawdown, win rate, and payoff ratio.
Then we’ll talk about capital asset pricing, arbitrage pricing, the efficient market hypothesis, random walks, and mean reversion—financial statement analysis, discounted cash flow, internal rate of return, net present value, and payback period.
Then let’s talk together about the macroeconomic cycle: GDP, CPI, PMI, the unemployment rate, and the trade balance—central banks, open market operations, reserve requirements, the rediscount rate, and the benchmark interest rate—value at risk, stress testing, Monte Carlo simulation, hedging and risk management, and insurance.
Then I’ll talk to you about behavioral finance: anchoring effects, overconfidence, loss aversion, herd behavior—corporate governance, agency problems, equity incentives, mergers and acquisitions, leveraged buyouts, and bankruptcy restructuring. Finally, that’s the world—and me.