Personal Notes: Economics, Business, & Finance
The following are the topics I have studied (and will be planning to study) during my time in the Korean military until November 2022. As these notes are primarily for my personal use, I did not spend as much time writing them in a manner that is clear for all readers. But since it would be a waste not to share them, I uploaded them on this website. All of my personal notes are free to download, use, and distrbute under the Creative Commons "Attribution- NonCommercial-ShareAlike 4.0 International" license. Please contact me if you find any errors in my notes or have any further questions. I have used the LaTeX editing program Overleaf to create my notes; diagrams are often drawn using the tikz package or iPad Notes.
Before you start with anything, you should read through the microeconomics to understand the basics of supply and demand, and then read through macroeconomics to understand the broader effects of the economy on the market. At this point, you're pretty much ready to get started with investing.
I have divided investing into 2 groups: fundamental investing and quantitative finanace. The fundamental investing attempts to educate the reader on whether a financial security is a good buy by inspecting the valuation of the company or through the broader economy. Therefore, corporate finanace and structuring is important here to really thoroughly introduce the standard procedures of what goes on in most companies. This will allow the reader to understand the state of a firm from reading the news (e.g. if there was a recent LBO, what does it entail for my investment?). Math beyond DCF analysis is not needed. Furthermore, specific things like the different types of stock orders, the structure of the market (counterparties, brokers, etc.) are also not mentioned in detail. This note is really a simple matter of "should I buy this company or not?". If yes, we just buy it with some market order, assuming that the market is liquid and not too volatile. There is also no need to short sell.
The quantitative finanace sort of assumes you've read through the fundamental investing, as this business knowledge makes understanding things much easier. In here, we treat all securities as a stochastic process and simply focus on maximizing returns and minimizing risk. In here, knowledge about liquidity and the such is indeed important, so we first go into depth on market structure, and then move right on into trading strategies.