Understanding Money
If you start with the following book, white paper and videos you’ll have a very solid starting point for understanding money:
- Pragmatic Capitalism – What Every Investor Needs to Know About Money and Finance (the only item on this page that is not free. Sorry!!)
- Understanding Modern Portfolio Construction
- Understanding the Modern Monetary System
- Everything you need to know about finance and investing in less than an hour
- How The Economic Machine Works in 30 Minutes
Section 1 – Understanding Money & the Macroeconomy
- What Is Money?
- Where Does Money Come From?
- Understanding the Modern Monetary System
- A Cheat Sheet for Understanding the Different Schools of Economics
- Understanding Moneyness
- Understanding Inside Money & Outside Money
- Credit is Money
- Where Does Cash Come From?
- What Backs the Value of Money?
- Banking – A General Overview
- The Basics of Banking
- The Contingent Institutional Approach (advanced reading)
- A New Way of Thinking About the Economic “Machine” – Financial Times Op-Ed
- How the Economic Machine Works – Bridgewater
- The Money Multiplier is a Myth
- Endogenous Money in a Coherent Stock-Flow Framework (advanced reading)
- Where Profits Come From
- Saving is not the Key to Financial Success
- Savings Does Not Finance Investment (advanced reading)
- Understanding Quantitative Easing
- The Bond Market Does Not Care About Headline Inflation
- I Want to Come Back as the Fed. Then I Can Intimidate Everybody
- Whom Does the Fed Serve?
- Who Owns the Federal Reserve?
- What Are Central Bank Reserves?
- Who Determines Interest Rates?
- What is the Purposes of Interest?
- The Fed in Plain English (video)
- Perry Mehrling’s Excellent Monetary System Course (video series)
- Thinking of the Economy as a System of Flows
- The USA is Not Going Bankrupt
- The Role of the Entrepreneur in the Economy
- Why Time is the Ultimate Form of Wealth
- What Causes Recessions?
- Reflections on Gold as Money and an Investment
- Hyperinflation – It’s More than Just a Monetary Phenomenon
- Mr. Roche’s SSRN Research Page
- How Complex Systems Fail
- Understanding the Federal Reserve
Section 2 – Basic Resources on the Financial World
- The Only Basic Financial Advice You’ll Ever Need
- Bond Market 101
- Learn More About Bonds
- All About Bonds
- What is the Stock Market?
- Why Indexing Works
- Should You Use an Automated Investment Service?
- The Biggest Myths in Investing
- The Investing Checklist
- Understanding the Intersection of Technical Analysis, Charting and Fundamentals
- Some Investing Rules from Legendary Investors
- Timeless Investing Lessons
- The Facts They Don’t Want you to Know
- risk Management beyond asset Class diversification
- Risk Management Matters
- Risk Management Failures and Why They Occur
- 3 Ways to Protect Yourself Against Tail Risk
- The Dangers of Leverage, Concentration and Liquidity
- The 7 Immutable Laws of Investing
- 7 Rules on Identifying Investment Opportunities
- John Templeton’s Investment Rules
- John Bogles 10 Investment Rules
- Barry’s 10 Rules
- The Difference Between Gambling and Investing
- The Perpetual Wall of Worry
- The Market is a Heartless Beast
- Is the Stock Market a Zero Sum Game?
- Section 3 – Understanding Proper Portfolio Construction
- Understanding the Total Portfolio Approach
- Understanding Countercyclical Indexing
- Why Indexing is the Future of Investing
- The Myth of Passive Investing
- The Alpha Paradox
- What is Behavioral Alpha?
- The Arithmetic of Active Asset Allocation in a Global Financial Asset World
- The Allocation Matters Most Hypothesis
- The Cost Matters Hypothesis – John Bogle
- The Case for Index Fund Investing
- Why Stocks Outperform Bonds
- Great Investors Think in Terms of Probabilities
- Beat the Average by Not Trying to “Beat the Market”
- Of Course 80% of Mutual Funds Underperform
- Most Index Funds are Macro Funds
- Why the “Active” vs “Passive” Debate is the Most Important Discussion in Finance
- What Is Portfolio “Risk”?
- Is the Global Financial Asset Portfolio the Perfect Indexing Portfolio?
- The Intertemporal Conundrum
- How to Avoid the Problem of Short-termism
- Beware of the idea of “the Long-Term”
- The Dangers of being too Short-Term
- Understanding Multi-Temporal Portfolio Construction
- Your Investment Portfolio is Simply a Residual From your Primary Form of Production
- Hope is Not an Investment Strategy
- Why Stock Market Declines are Good
- Smart Investors Don’t Live on the Extremes
- Why you Probably Fail as an Investor/Trader
- Cash – A Call Option With No Expiration
- What is Cash in a Brokerage Account?
- Why Treasury Bonds are the Ultimate Safe Haven Financial Asset
- Commodities Have (Almost) no Place in Your Portfolio
- Gold is Insurance, not an Investment
- Thoughts on Commodities as an Asset Class
- Odds are Your Mutual Funds Suck (part 1, Part 2)
- On the Importance of Proper Fund Evaluation and Benchmarking
- The Most Common Mistake When Evaluating Funds
- Can we all Agree to Stop Comparing Everything to the S&P 500?
- The Stock Market Isn’t Where you Get Rich
- Understanding Risk Adjusted Returns
- Understanding Your Real, Real Returns
- Understanding Your Real, Real Returns – Fee Edition
- Dollar Cost Averaging Just Means Taking Risk Later
- The Importance of Position Sizing
- The Importance of Money Management (also see here for more – also here)
- “Cash on the sidelines”? Don’t Buy It!
- What’s a Conservative Investor to do?
- Bond Ladder vs. Bond Fund Ladder
- Why do Corporations Pay Dividends?
- Section 4 – Outside Resources
- Warren Buffett’s Annual Shareholder Letters
- William Bernstein’s Investment Blog
- A Huge Collection of Good Investing Resources
- William Hummel’s “what is money” page. A little too MMT focused, but very good on most topics.
- Investment Thoughts and Lessons from credit guru Howard Marks
- Real, Real Returns – Thornburg
- Where do equity returns come from? – GMO
- Securities in an Insecure World
- Opportunities for Patient Investors – Seth Klarman
- Engineering Targeted Returns and Risks – Bridgewater
- Some Thoughts on Risk Parity
- Risk Parity is About Balance – Bridgewater
- The Risk Parity Approach to Asset Allocation – Callan
- Efficient Portfolios Through True Diversification – Panagora
- The Hidden Risks of Risk Parity Portfolios – GMO
- Modern Tactical Asset Allocation
- Value and Momentum Everywhere – Asness
- The Adaptive Market Hypothesis – Lo
- Asset Allocation Strategies – Cambria
- See Khan Academy for some excellent econ and investing related views.
- The Arithmetic of Active Management – William Sharpe
- Why Active Investing Is a Negative Sum Game – Fama & French
Section 5 – Behavioral Finance
- 10 Behavioral Biases that Hurt Investors
- Why Retail Investors are so Bad at Investing
- The Psychology of Financial Decision Making
- Why do People Hate Rising Stock Prices?
- The Power of Fear
- Optimal Decision Making – What is Risk?+
- Charlie Munger on the Psychology of Human Misjudgment
- Recency Bias and Investor Pitfalls
- Controlling your Emotions
- Asset Bubbles – Causes, Consequences & Policy Options
- A Monkey Economy As Irrational As Ours
- Learn to Think Like a Chess Player
- The Power of Fear
- Thinking Fast and Slow
- It’s Only in Being Wrong that We Can Learn to be Right
- Herd Mentality – We’re Not that Different From Sheep
- Untangling Skill and Luck
- Optimal Decision Making – Don’t Panic!
- Playing the Optimal Game Requires the Optimal Understanding
- Great Investors Think in Terms of Probabilities
Section 6 – Finance & Econ Tools/Resources
- The Cheapest ETFs for All Asset Classes
- Run Some Backtests (Just Remember the Future is unlikely to look like the past!)
- Macroeconomic Balance Sheet Visualizer
- Bogleheads Forum – lots of smart people here to bounce ideas off of
- Rational Reminder Forum – Another forum with many smart users
- The Fama/French Forum
- The Flexible Retirement Planner
Section 7 – Common Myths and Misunderstandings
- Every Myth Cullen has Ever Debunked (Or Tried To!)
- The Biggest Myths in Economics
- Common Myths About the Federal Reserve
- No, US Dollar Assets Haven’t Lost 99% of their Purchasing Power
- Debunking Some Common Investment Myths
- 7 Market Myths that Makes Investors Poorer
- Stop With all the “Money Printing” Madness
- How Much Longer Will the Dollar Remain the World’s Reserve Currency?
- The Biggest Myth About Quantitative Easing
- The US Government is not “$16 Trillion Dollars in the Hole”
- Is a House Really a Good Investment?
- My Quick Take on Gold as Money, an Investment and a Currency
- Is China Boycotting US Dollars?
- Is Social Security a Ponzi Scheme?
- Does Gold Really Hedge Against Inflation?
- Understanding the Gold Standard
- Myth: Gold is a Good Performing Asset Class
- Why No One Should Support the Gold Standard
- The Cash on the Sidelines Myth