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MarketLife Ep. 2 – Basic finance concepts and time management

Podcast-Cover300In this episode of MarketLife, I discuss some of the key concepts in finance. Understanding these ideas can save you some time and energy, and also will shed new light on much of what you hear in the news and media.

Things you will learn:

Two key concepts of finance:

  • “A dollar today is worth more than a dollar tomorrow”
    • Time value of money
    • A core concept in valuation
      • One way to calculate the value of something is to sum the present (discounted) values of future cash flows.
    • Interest rates matter
      • Higher rates mean greater discount rate, which means your “dollar tomorrow” is worth less today.
  • Investors should demand greater return for greater risk
    • What is risk?
    • Risk = uncertainty?
      • A lot of the finance world works on this assumption. Is it true?
  • Markets are highly competitive
    • There is no free lunch…
    • …so stop looking for the Holy Grail!
    • It’s really hard to make money in markets

The single most important time management secret I know:

  • Write down (physically, write down) the 3 things you must get done today
    • Specific tasks
    • Allow yourself no failure option
  • Do it… see by experiencing… see if it works for you.
  • There are ore complicated systems, but you don’t need them
  • When to do it:
    • Night before? Morning of?
    • Flexibility? Is this good or bad?
  • How to fail
    • Don’t take it seriously
    • Don’t be specific
    • Put down tasks that are too big
    • Ignore it one time and say it doesn’t matter

As always, if you have questions or ideas for topics, please drop me an email (adam at adamhgrimes.com). I hope this show will come to feature your feedback and ideas, so don’t hesitate to share them with me.

Also, if you like the music for this podcast, then be sure to check out Brian Ashley Jones, my friend, and a fantastic singer-songwriter. He has a new CD out, Out of the City (or here, on iTunes) that you might enjoy!

Enjoy the show:

AdamHGrimes

Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.
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