1 Alternative asset classes: any other asset classes excluding stocks, bonds, or cash
2 Hedge fund: an investment fund that trades relatively-liquid assets and uses more complex trading and portfolio techniques to pursue higher-than-market returns.
3 Gabler, Neal. “The Secret Shame of Middle-Class Americans Living Paycheck to Paycheck.” The Atlantic, July 11, 2018.
4 Stocks: shares representing ownership in a company. If the company has 100 shares, owning one share will give you 1% (1/100) ownership of the company.
5 Politi, James, and Colby Smith, “Fed Inflation Shift Raises Questions about Past Rate Rises,” Financial Times, August 28, 2020, www.ft.com/content/e1a3a865-1738-40b3-9180-2ca8f886f4f0. (accessed Sept 10, 2020)
6 Treasury bond: government debt securities issued by the US federal government. Investors buying bonds lend money to the government and get “interest payments” in return.
7 Nominal return: the nominal return without considering inflation.
8 Real return: the actual return you get after accounting for (deducting) inflation out of the nominal return.
9 Twenge, Jean M., and A. Bell Cooper, “The Expanding Class Divide in Happiness in the United States, 1972–2016,” Emotion, 2020, doi:10.1037/emo0000774.
10 Kahneman, D., and A. Deaton. “High Income Improves Evaluation of Life but Not Emotional Well-Being.” Proceedings of the National Academy of Sciences, vol. 107, no. 38, 2010, pp. 16489–16493., doi:10.1073/pnas.1011492107.
11 Data from: GDP per Capita, Worldometer, 2017, https://www.worldometers.info/gdp/gdp-per-capita/. (accessed Sept 24, 2020)
12 Hoffower, Hillary. “Warren Buffett Has Lost More than $21 Billion in the First Months of 2020. Here’s How the Notoriously Frugal Billionaire Spends His $67.6 Billion Fortune.” Business Insider, March 23, 2020, www.businessinsider.com/how-warren-buffett-spends-net-worth-philanthropy-2018-10. (accessed Sept 08, 2020)
13 Ritholtz, Barry. “Six Rules of Michael Steinhardt.” The Big Picture, February 28, 2012, ritholtz.com/2010/09/six-rules-of-michael-steinhardt/. (accessed May 10, 2020)
14 Chris Dudley, senior wealth advisor and director of sports and entertainment at Boston Private Wealth. “Money Lessons Learned from Pro Athletes’ Financial Fouls.” CNBC, May 15, 2018, www.cnbc.com/2018/05/14/money-lessons-learned-from-pro-athletes-financial-fouls.html. (accessed Sept 10, 2020)
15 Assets Under Management: value of financial assets that a financial institution (banks/funds) controls.
16 Brokerage house: a company that finds buyers or sellers to help you trade your investments.
17 REITs: companies that own and operate real estate. REITs give investors a more liquid and management-free way of getting exposure to real estate investments.
18 Bonds: a type of security that demonstrates the indebtedness of the bond issuer to the bold holders. A bond can be issued by the government, organizations, or a person.
19 Kaufman, Josh. The First 20 Hours: How to Learn Anything…Fast. NY, NY: Portfolio/Penguin, 2014.
20 Stock market index: a number to track the market performance of a combination of selected stocks. Examples include the S&P 500 Index (around 500 of the biggest companies in the US), NASDAQ index (stock exchange for major technology companies), and the Hong Kong Hang Seng Index.
21 Initial Public Offering (IPO): the process of a company issuing shares to the public to raise capital.
22 Bulls and Bears: bulls represent an up market. Bears represent a down market.
23 Short: the opposite of longing/buying a stock. When you short a stock, you profit when the price goes down, as you can buy it later at a lower price.
24 Tesla analyst Dan Ives of Wedbush Markets interview at https://wizards.institute/
25 Subprime: prime means optimal. So subprime describes less-than-optimal, untrustworthy investments.
26 Recession: a part of the business cycle where the economy contracts and experiences a decline in economic activity.
27 Marks, Howard. Mastering the Market Cycle: Getting the Odds on Your Side. London: Nicholas Brealey Publishing, 2020.
28 Marks, Howard. “Yet Again?” Oaktree Capital, 2017.
29 Distressed Fund: an investment fund that specializes in buying companies experiencing financial stress.
30 Lattman, Peter. “Treasure Hunters of the Financial Crisis.” The New York Times, November 9, 2013, www.nytimes.com/2013/11/10/business/treasure-hunters-of-the-financial-crisis.html.
31 Data from: The S&P 500 P/E Ratio: A Historical Perspective. ValueScope. https://www.valuescopeinc.com/wp-content/uploads/2017/07/White-Papers-SP-500-PE-Ratio.pdf
32 PE Ratio: Price / Earnings. The higher the ratio, the more inflated (expensive) the valuation is.
33 Sharpe, William F. “Likely Gains from Market Timing.” Financial Analysts Journal, vol. 31, no. 2, 1975, pp. 60–69., doi:10.2469/faj.v31.n2.60.
34 Insider trading: illegal trades made based on non-public (insider) information.
35 Technical signals: the patterns found by analyzing historical price and volume
36 Fifield, Aaron. “Knowing Your Edge—Surviving the Game | Blair Hull.” Season 1, episode 85, 2016.
37 Ibid.
38 Exchange-Traded Fund: works like a mutual fund, except you can go in and out of the fund much more quickly, as they can be freely bought and sold during regular stock market hours.
39 Torngren, Gustaf, and Montgomery, Henry. “Worse Than Chance? Performance and Confidence Among Professionals and Laypeople in the Stock Market.” Journal of Behavioral Finance, vol. 5, no. 3, 2004, pp. 148–153., doi:10.1207/s15427579jpfm0503_3.
40 Blue chip companies: Typically well-established companies with a good reputation and sound financials
41 Torngren and Montgomery. “Worse Than Chance.”
42 Ibid.
43 Ibid.
44 Chief Investment Officer (CIO): job title of the most senior executive in charge of the company’s investments.
45 Sweeney, Chris. “Hugh Hendry: Wit and Wisdom of Ex-Financier Turned YouTube Star.” Scotland | The Times, September 7, 2020.
46 Asymmetric loss profile: achieving more positive gains than negatives with active risk management.
47 Graham, Benjamin. The Intelligent Investor. Harper, 2006.
48 Mean: represents the average number in mathematics.
49 Data from: Quantitative Analysis of Investor Behavior. Dalbar, 2017.
50 Ibid.
51 Super platforms: Scalable applications or web-based services that have a loyal user base and high growth.
52 Eng, San. “Kathy Xu: China’s Queen of Venture Capital.” Wizards Institute, 2020. https://www.youtube.com/watch?v=VeHP3b0ccFM&ab_channel=WizardsInstitute
53 Winn, Howard. “Anthony Bolton Retires with Unfond Memories of China.” South China Morning Post, April 2, 2014, www.scmp.com/business/article/1463349/anthony-bolton-retires-unfond-memories-china.
54 Browne, Christopher H. The Little Book of Value Investing. Hoboken, NJ: Wiley, 2007.
55 Collateral: a valuable asset used to secure a loan. Lenders can seize the asset if the borrower fails to make payment on their loan.
56 Bar Eli, Michael, et al. “Action Bias Among Elite Soccer Goalkeepers: The Case of Penalty Kicks.” SSRN, February 9, 2008, papers.ssrn.com/sol3/papers.cfm?abstract_id=1091662.
57 Ibid.
58 Singh, Manish. “Reliance Jio Platforms Says $15.2 Billion Fundraise Is Good for Now.” TechCrunch, June 19, 2020.
59 Sengupta, Devina. “Reliance Jio Plans to Capture over 50% of Revenue Market - ET Telecom.” ETTelecom.com, March 3, 2017.
60 Farah, Lynn. “Mukesh vs Anil: How the Ambani Brothers’ Wealth Soared and Dipped.” South China Morning Post, July 20, 2020.
61 Ritholtz. “Six Rules of Michael Steinhardt.”
62 Inman, Phillip. “Black Wednesday 20 Years On: How the Day Unfolded.” The Guardian, Guardian News and Media, September 13, 2012, www.theguardian.com/business/2012/sep/13/black-wednesday-20-years-pound-erm.
63 Eng. “Kathy Xu: China’s Queen of Venture Capital.”
64 Individual Retirement Account: a tax-advantaged investment vehicle that gives you tax benefits.
65 Cassidy, John. “Mastering the Machine.” The New Yorker, 2011.
66 Schwager, Jack D. Market Sense and Nonsense: How the Markets Really Work (and How They Don’t). Hoboken, NJ: Wiley, 2013, pp. 267–275.
67 Franck, Tom. “Warren Buffett Says Berkshire Sold All Its Airline Stocks because of the Coronavirus.” CNBC, May 4, 2020.
68 Limit order: an order that will not be executed unless it hits the specified price.
69 Leverage: the use of borrowed money in investing to amplify profits (or loss).
70 Amadeo, Kimberly. “How a 1998 Bailout Led to the 2008 Financial Crisis.” The Balance, 2020, www.thebalance.com/long-term-capital-crisis-3306240.
71 Derivatives: a financial asset whose value is based on the value of another financial asset
72 Ibid.
73 Arbitrage: the simultaneous buying or selling of assets in different markets to take advantage of difference in pricing for the same product.
74 Guo, X. (2008). “The Fall of Long-Term Capital Management.” Lingnan Journal of Banking, Finance and Economics, 1. Retrieved from http://commons.ln.edu.hk/ljbfe/vol1/iss1/1
75 Ibid.
76 Amadeo, “Bailout.”
77 Peters, Basil. Early Exits: Exit Strategies for Entrepreneurs and Angel Investors (but Maybe Not Venture Capitalists). Coquitlam, B.C.: MeteorBytes, 2009.
78 Palmer, Annie. “Jeff Bezos Is Now Worth More than $200 Billion.” CNBC, August 26, 2020, www.cnbc.com/2020/08/26/amazon-ceo-jeff-bezos-worth-more-than-200-billion.html.
79 Calculated with data from Private Domestic—Price Indices by Class (Territory-Wide). Hong Kong Property Review Monthly Supplement. Hong Kong Government Rating and Valuation Department, 2019.