No related to this conversation, but I just started reading some books on finance and I actually know what most of those terms mean now! Lol

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JumpCrisscross 6 hours ago | parent | next [-]

Good for you! It’s fun when you realize it’s a constructed language that also tends towards precision. While accounting is not my favorite, financial models as a whole are incredibly powerful reasoning tools. On par, for me, with engineering or physics based first-principles reasoning.

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instagraham 2 hours ago | parent [-]

Which financial models best describe reality in your opinion?

I'd always wanted to view affairs from a different lens, though I often feel the people who think everything revolves around bond rates or inflation numbers can miss the social picture of why things happen.

	▲	JumpCrisscross 2 hours ago \| parent [-]
		> Which financial models best describe reality in your opinion? The most-powerful ones for individuals are the micreconomic mechanisms. Understanding how leverage, tranching and moving risk (and reward) across stakeholders and time, work, for instance. The necessary mechanisms and tradeoffs one must make, as well as the ones one should. If you're looking for a formal model, it's the balance sheet. But not the accountant's. The financier's. Sources and uses, and uses and sources. Payments in, payments out. How do they balance over time; how do they change exposures to different layers of economic and legal control. The primitives of these models are transactions and people. When you look through them, they're defining human wants and ambitions, faults and fears, patience and mortality.

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leosanchez 3 hours ago | parent | prev | next [-]

Any recommendations ?

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5 hours ago | parent | prev [-]

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