Just finished the entire course, absolute masterpiece of information. Really sweet that you can simplify what most consider complex concepts into basic fundamentals XD You deserve an award for this haha :)
Myself and 10's of thousands of others would disagree with you. It sounds like you didn't watch the videos in this course from Video 1, if you did you'd see he builds up to this video with indepth teachings in the previous videos.
Yeah, I am amazed at how much I can learn from Preston's stuff. I'd seen his podcasts before, although they were a bit too confusing. I come to research about the basics, watching these videos and didn't even realise it was him for a while! Incredible stuff :D
I found this channel when i was 17 years old during the pandemic just looking up info on finance lessons. Even with this being nearly a decade old i still find this inormation to be extremely insightful and has taught me more then what a college course can offer. I appreciate these lessons that are given for FREE and would like to say that on my financial journey this was where i all started and will look back to this years from now. Preston Thank you.
I love your videos. I am a High School teacher who has recently begun an investment club at the school in South Los Angeles.. We use your valuable and very clear lessons to learn new concepts. My kids are very excited about what you teach us. Thank you for helping me change my students' vision of their future. If you are ever in Los Angeles, please come and visit us.
Patricia Reyes you know that this guy is just uploading video made by another person, right? In other words narrator and the uploader are not the same people 😆
When I found this channel I felt as if I had found a pot of gold. Very useful information. Am currently investing in my financial education and so far this channel has been an incredible way to start. I will continue my education through books after am done viewing this amazing content. Thank you very much Preston!
I love you and your course! I have always wanted to learn about finance and investing, but no one would teach m...and I was intimidated every time I read the terminology. This course simplified everything...I'm really excited to finish your entire course! I've already gotten through the first course, and am onto courses 2 and 3! This is my favorite, favorite site. Thank you so much Preston Pysch!
7:40 when the car has an interest of 1%, shouldn't the calculation be (30,000/100*1+30,000)/5y/12m to get the monthly payment which is 505? I'm super confused. The real total prices of the deals should be (30,000/100*15+30,000)= $34500 for the 15%, and (30,000/100*1+30,000)= 30300 for the 1% one.
Thank you for the reply, Preston. So when you calculate bond's price, what kind of interest rate do we use? Is that loan rate? If we know the bond price, we could calculate YTM. And in the Yield Curve video, you mentioned we could look at the treasury bond Yield Curve to see the interest rate. So what is the difference or relationship between YTM and interest rate? When you say we could see the interest rate from Yield Curve, what kind of interest rate do you mean? Thank you.
If you dont mind me asking, do you have any email or something else for further discussions? When Im done with the last course? With best regards from Alexander
Hi Mr Pysh, first of all, thank you so much for your all records! I have one basic question: Once we decide to buy a stock or bond, which interest rate should we consider? Do we need to look at the Nominal or Real Interest rate? Does inflation affect our decision? Appreciate it!
That feel when your "real extreme rate' is a reality in some countries. I.e. in Russia it would be a great rate for a car loan where avg rate is about 20%
Great Video. But one doubt, you have mentioned -when interest rates low-buy stocks. I agree. But you have mentioned find companies with very low debt, positive earnings and a strong price to book ratio. I have a slight doubt about the last one- strong price to book ratio ? But i think we should always go for companies, which are priced low compared to their book value.. correct?
Hi Preston, thanks for you videos. They are really logical and easy to understand. I have a question for this one. What do you mean by interest rates? FED determins interest rate of loan, right? Are there any other interest rates? Thank you.
Just completed your first course, really it is awesome. There are 2 more levels of your courses, i hope when i will complete those two also, i will get fourth one.
This is like having a switch go off in your head. The major bad week the market just had was due to fears that the FED would raise the interest rates. The way I learned how the market works was by watching South Park, the Margaritaville episode.
I was wondering how this applies if you are not American. I am Canadian and when it comes to the federal reserve in the United States does it make sense to follow these rates when it comes to American stocks but if it’s Canadian stock would it be best to use the Bank of Canada rates? Or if I’m a Canadian would I always use the rates determined by the bank of Canada because I depend on the Canadian dollar?
Preston, thank you so much. I understand. :-) So it is all begin from interest rate (10 year federal note interest rate, which is level 1 risk). Since the interest rate will change, the bonds' price will change, then YTM will change. Is this right?
Can we use to same principles for real estate investing? I am a passion architect who loves real estate, I don't find reading financials very attractive.. still I am learning a lot from these videos.. will I benefit from them in future as a real estate investor? Also, should I just focus on real estate because I understand them and love them truly or is it important to diversify to become a great investor.. please do reply Preston! Thank You.. :)
excuse me, I'm a newbie here. Would someone mind explaining to me how to work out the Monthly payment and total interest during 7:27 ? Thanks in advance
+ParkBom Pham It is pretty simple once you understand and implement the proper equation. some back drop. First you need to know about what a perpetuity is. A perpetuity means that you will be getting or paying out a constant cash flow forever. Say you bought a perpetuity that will pay you 1000 dollars a year for the rest of your life. If you wanted to know how much you would have pay today (present value). You would take the Cashflow C(1000 in this case and divide it by r( the interest rate) Let's say r= 10%. To calculate the PV of this perpetuity PV=1000/.10 PV = $10,000. Easy right? Another term you need to know is an annuity. It is just like a perpetuity in the way it pays out constant cashflows, but it is only for a certain time period. In this example we will say it is only going to pay you $1,000 a year for 5 years. To calculate the PV of an annuity you would take the PV of a perpetuity that starts today and subtract it by another perpetuity that starts 5 years from now. That equation looks like this PV = C[PERPETUITY today - PERPETUITY 5 years from now.] PV = C[ 1/r - 1/(r(1+r)^t] All I did to make things easier was factor out the Cashflow from the two perpetuities. With proper numbers that will look something like. PV = $1000[1/.10 - 1/(.1(1+.1)^5] PV = $3790.786 In this case the 5 year 10% $1000 perpetuity would be worth $3,790.79 today. As I said earlier annuities and perpetuities can be paid to someone. In this case if you got a loan/mortgage to help pay for something, you would use the annuity formula to determine your monthly payments like we did in the video. For the video example let's look at the 15% rate. The car is worth. $30,000 and we have $5,000 on hand. Our loan amount will be $25,000. This $25,000 will be our PV for these annuity calculations. We know PV = $25,000, the interest rate = 15% and the term (t) of the loan is 5 years. P.S. it is important to note that with car loans and home loans(mortgages) you will be paying on a monthly basis. This means you will have to factor 12 payment periods per year. Or that n = 12. I will show where n comes in later. So our initial equation looks like this. PV = C [ 1/r - 1/(r(1+r/n)^(n times t) We did r/n because the interest rate gets chopped into 12 equal payments for the year. And we multiplied 5 times 12 because we have to account for each payment over the 5 years.(12 payments a year for 5 years) With numbers the example will look like $25,000 = C[ 1/.15 - 1/(.15(1+ .15/12)^(5 times 12) $25,000 = C[3.5029] divide both sides by 3.5029 and we get 25,000/3.5029 = $7,136.97. If you stop to look at the example above you will see that this number equals how much of the loan you will pay back each year. If you divide $7,136.97/12 you get a monthly payment of 594.75. If you multiply $7,136.97 x 5 and add in your $5,000 you get a total(adjusted) payment of $40,684 And if you take the adjusted price and subtract it by the original price of the car you get how much you pay out in interest. $40,648 - $30,000 = $10, 684 in interest. This is long winded, but I hope this helps. Best, Kevin
+TTTT glad I could help. I started studying finance on my own about a month ago and I was definitely in your shoes not to long ago. Best of luck in your journey to becoming a master of money!
Hi Preston...great work!! I really like ur content and delivery. Keep up the good work. Btw I had one doubt...I may be wrong but stock prices actually rise when interest rates are low right? So instead of buying a good stock when interest rates are low, shouldn't we wait for the interest rates to rise and consequently, the stock price to decline and then buy the stock?? And sell it when the rates decline again.
Hi everyone *Can someone clarify for me please?* I understand buy Bonds when Interes Rates go high to get a higher interest rate but on the vid 7. What are the components of the bond he said When Interest Rates Go Up, Bonds Go Down. How is that possible Isn't a contradiction? Thanks!
Let’s say interest rates are 5%. You buy a $1000 bond with the 5% ($50). If the fed lowers interest rates to 4%, the bond will be worth more because new bonds will have a 4% coupon. So people will come and try to buy your 5% ($50) return bond and bid up prices till the return is 4%.
When the market crashes and the interest rates are lowered, should I buy an old bond with a high coupon rate from someone? Especially when I'm expecting the market to make new lows
Thanks for this course. Looking forward to Course 2. Been tuning into the Podcast as well. Great work. Well done! Haven't invested a penny yet but hopefully in the next year or two after I feel more comfortable. Don't feel like I have enough knowledge or money to invest yet. This helps tremendously. Keep it up.
I really like the course but this video seems puts the fed forward as some stabilizing entity but does not acknowledge the role they played in creating the easy money standards that led to the bubble. The Fed did NOT see the bubble coming like you said as was obvious by the words of Bernanke leading up to the collapse
Ya I think Preston is not wrong but he isn't right either. The fed did see the recession coming but they didn't expect it to be so fucking massive. Which is why I agree more with you that even if the fed saw it coming they didn't know the true impact of the subprime mortgages defaulting would have on the economy.
Hi Preston, thank you for the videos and all the effort you put to make this valuable knowledge available for everyone, really appreciate it. I know this is not the appropriate place to ask this question but since I'm here already I'll just go ahead. Do you honestly think that the knowledge students get from business schools is worth that fortune?I personally have never seen or heard of an academic reached a millionaire status.
This is only for countries where interest rates is being controlled by the government right? What about for my country whereby the government controls the foreign exchange rate?
Preston, thank you for your videos! I was wondering why banks such as Goldman Sachs, Bank of America, etc. have more book value than their market price. Some of them seems like a great value investment, but I cannot help but feel like I am missing something vital. Why would they undervalue their stock so far under their book value?
I really need to note that the FED is in fact UNCONSTITUTIONAL. Also that they do NOT know what's best for 'stimulating' the economy. Best we can do in the current situation is be knowledgeable of the FED's manipulation and react accordingly. Great series by the way! I'm going to recommend this to all my friends! (:
I didnt understand How will market fall if the FED raises the Interest rate..... When interest rate raises, the spendings of people on things fall, accepted. But how do u relate that to market movement.
Ravi Teja, lets use an extreme example. Let's say the interest rates were 1% and now the government has increased them to 10%. Lets also say the average return in the market is 5%. Do you think people will put their money in bonds to get interest or put their money in the market? People will be more likely to take their money out of stocks and put them into bonds, thus the market falls. *Financial Fitness: Investing and Personal Finance Videos*
I'm actually referring to the quality of knowledge I get from business schools, professional investors don't adhere to the academic approach to investing, for example, academics say, the riskier it is the more return you get, value investors say, the least riskier it is the more return you get, academics rely heavily on complex formulas and let them dictate their actions, value investors do better by relying on their own analysis and investigations, that's what my question is about.
If the FED highens the interest rates, it is true that spending habits are reduced, *but won't the debt rise as a consequence* ? I think that's _not_ a suitable strategy to prevent a bubble from happening. It seems to accellerate the rate of debts!
+gains I forgot about making this comment. And of course I was correct about the bubble which popped in August. However I was expecting a much more dramatic reset. In no time at all we are back into the same bubble conditions as before. Where is all this investment coming from that would have the DOW at nearly at 18,000 again. My sense is banksters/fraudsters are waaaay too leveraged. The FED can't raise interest rates again because doing so would expose all of the bloated investments causing another 2008 style crash. Deregulation of our financial system has been a nightmare. The more I research more I understand how f'ed we are as a nation.
I understand the basis of what the fed does and why. However, I'm completely baffled by the "how". In particular, how do they raise interest rates? Do they have authority to tell banks what interest rates they can give? Or do they indirectly do it through some other means... maybe via what they charge banks to back things like bonds or something like that. That's assuming they back bonds and stuff... just tossing that out there.
Hi Preston, Thanks for the videos and the valuable information. The lesson on Fed was an eye-opener. I was under the impression that Federal Reserve was being controlled by the Federal Govt or its associate organizations. Surprising to know that its controlled by banks and individuals. In the light of sub-prime crisis it looks ironical too.
The FED has been playing with fire for a while, let me tell you that. As in everything that's been abused for too long, there will be a day of reckoning. I hope and pray we won't have our pants down when it finally happens.
If you disagree with him why are you here then? Shouldn't you be out getting rich or proving your method is better than his? Go make a course on how your methodology is better and stfu. Your logic doesn't make sense.
Before video: Arg, let's see if my MASSIVE confirmation bias against the FED will be the same after this video. I strongly dislike the Federal reserve bank of america because: - It is not Federal, it is owned by private shareholders - It does not have any reserves it has infinite power to print any amount it likes. IMO the FED created the conditions leading to the crash, and now it has basically held interest rates at zero for 10 years. -------------------------------------------------------------------------------------------------------------------------------------------
Post video: I agree with the theory of this video but the actions of the FED (pre and post crash) contradict the theory. Ben didn't see the housing crash coming (he even said there was no housing bubble), and now the stock market is in a massive bubble with near zero interest rates. If the FED wanted to prevent a bubble interest rates should be much much higher than they are today. I think the FED has stoked the fire. Someone respond to this comment in 2 years time and call me out if I'm wrong! --------------------------------------------------------------------------------------------------------------------------- But yeah, all your videos thus far have been excellent and I will continue to watch them.
But grandma, why do you have such large teeth? I'm trying to maximize employment, deerie (OH! But I didn't tell you at lowest wages possible, jejeje I'm wicked!)
Aurat ke shenshah hain aap score ginti raho yah duniya hamare liye khajana hai humko yahan Allah jis kam se bheja hai Mumbai kam kar rahe hain is duniya ki Jannat ko ham thokar maarte Hain humko Akhilesh ki Jannat se pyar hai Allah se hamari dua hai Allah se hamari dua hai kis Dene ka Vada Allah Kiya hai vahi hamare liye kafi hai is duniya ke samne Shaukat duniya ek din panah hone wali hai koi rahega na baki koi rahega na baki is duniya mein aane jaane wali duniya bacche kam karna hai ke Hukum ki tabir karna hai aur hamare Nabi ke siraje Mubarak ho per chalna hai wala jab bulaega humko jana hai charging ki taiyari hai 4 din ki duniya hai momin ke liye maut sofa hai aur momin hamesha taiyar rahata hai Allah ke bulave aur humko duniya se Kam Allah se jyada Mohabbat hai Jawaharlal Nehru vah Sare Alam ki Insaniyat aur khyal pahar Chand Tare Aasman Zameen sab Allah ki ham Dushman karti hai rasgulla humko bhi humko Suna karne ki aadat ko hamesha ke liye jaaoge yah duniya ke hire se humko Allah Miyan Yaseen se nikal de yahan per Shaitan ka bala bala chalta hai yah Facebook Insan banai Hui yah duniya Allah banai Hui hai Insan ko bhi Allah paida Kiya hai Allah Shayar ke kareeb rahata hai Insan Allah se ijjat lekar Insan ke khoon mein firte rahata hai Bhat khaega to ham Bhadra karne Wale nahin hai kyunki ham Allah ka naam lakhon karodon Salam hamare hawa sallallahu alaihi vasllam per Virendra Sara din hamen pahuncha Diya hai koi rahana baki koi rahega na baki yah Fanaa hone wali duniya ke liye ham kya samjhenge Allah humko ibadat karne ka mauka diya hai why ibadat ke sare ham duniya se ham jab Rukhsar sajaenge vahan per Allah ki rahamat ham Ko milegi yahi dua hai Allah Hu Akbar sallallahu alayhi vasllam
Just finished the entire course, absolute masterpiece of information. Really sweet that you can simplify what most consider complex concepts into basic fundamentals XD You deserve an award for this haha :)
Myself and 10's of thousands of others would disagree with you. It sounds like you didn't watch the videos in this course from Video 1, if you did you'd see he builds up to this video with indepth teachings in the previous videos.
Yeah, I am amazed at how much I can learn from Preston's stuff. I'd seen his podcasts before, although they were a bit too confusing. I come to research about the basics, watching these videos and didn't even realise it was him for a while! Incredible stuff :D
@@AdrianLoganLive What are you talking about??
I found this channel when i was 17 years old during the pandemic just looking up info on finance lessons. Even with this being nearly a decade old i still find this inormation to be extremely insightful and has taught me more then what a college course can offer. I appreciate these lessons that are given for FREE and would like to say that on my financial journey this was where i all started and will look back to this years from now. Preston Thank you.
Fuark. 2023. We're all gonna make it, brahs 💪😊💯👍
I love your videos. I am a High School teacher who has recently begun an investment club at the school in South Los Angeles.. We use your valuable and very clear lessons to learn new concepts. My kids are very excited about what you teach us. Thank you for helping me change my students' vision of their future. If you are ever in Los Angeles, please come and visit us.
Patricia Reyes you know that this guy is just uploading video made by another person, right? In other words narrator and the uploader are not the same people 😆
@@rasul407 i believe Preston pysh is the uploader ans the narrator, feel free to correct this information if its wrong
When I found this channel I felt as if I had found a pot of gold. Very useful information. Am currently investing in my financial education and so far this channel has been an incredible way to start. I will continue my education through books after am done viewing this amazing content. Thank you very much Preston!
I love you and your course! I have always wanted to learn about finance and investing, but no one would teach m...and I was intimidated every time I read the terminology. This course simplified everything...I'm really excited to finish your entire course! I've already gotten through the first course, and am onto courses 2 and 3! This is my favorite, favorite site. Thank you so much Preston Pysch!
You are a great teacher! I’ve learned so much! Thank you for your work!
Does anyone have the math behind $594 monthly payment and $10,684 total interest from the car example?
7:40 when the car has an interest of 1%, shouldn't the calculation be (30,000/100*1+30,000)/5y/12m to get the monthly payment which is 505?
I'm super confused.
The real total prices of the deals should be (30,000/100*15+30,000)= $34500 for the 15%, and (30,000/100*1+30,000)= 30300 for the 1% one.
wow! golden nuggets in this video and all of your videos! thanks so much! Just found you! I will absorb all the knowledge!
I'm confused. 5:56
How is the cars Total interest 10,684, how is that calculated?
When I calculated $30,000/100%*15% to get the interest I got $4500.
Thank you for the reply, Preston. So when you calculate bond's price, what kind of interest rate do we use? Is that loan rate?
If we know the bond price, we could calculate YTM.
And in the Yield Curve video, you mentioned we could look at the treasury bond Yield Curve to see the interest rate. So what is the difference or relationship between YTM and interest rate? When you say we could see the interest rate from Yield Curve, what kind of interest rate do you mean? Thank you.
Im finished with course 1! Thank you for these videos! They really help :)
If you dont mind me asking, do you have any email or something else for further discussions? When Im done with the last course?
With best regards from Alexander
Hi Mr Pysh, first of all, thank you so much for your all records!
I have one basic question:
Once we decide to buy a stock or bond, which interest rate should we consider?
Do we need to look at the Nominal or Real Interest rate? Does inflation affect our decision?
Appreciate it!
How did you get the total interest value and the monthly payment
That feel when your "real extreme rate' is a reality in some countries. I.e. in Russia it would be a great rate for a car loan where avg rate is about 20%
Great Video. But one doubt, you have mentioned -when interest rates low-buy stocks. I agree. But you have mentioned find companies with very low debt, positive earnings and a strong price to book ratio. I have a slight doubt about the last one- strong price to book ratio ? But i think we should always go for companies, which are priced low compared to their book value.. correct?
Hi Preston, thanks for you videos. They are really logical and easy to understand.
I have a question for this one. What do you mean by interest rates? FED determins interest rate of loan, right? Are there any other interest rates?
Thank you.
Just completed your first course, really it is awesome. There are 2 more levels of your courses, i hope when i will complete those two also, i will get fourth one.
yay!!!!!, I completed your first course. So excited to move on to the next. Thank you!!
This is like having a switch go off in your head. The major bad week the market just had was due to fears that the FED would raise the interest rates. The way I learned how the market works was by watching South Park, the Margaritaville episode.
12:20 where is course 2 you awesome investor guy?
Best course on investing ever!
I was wondering how this applies if you are not American. I am Canadian and when it comes to the federal reserve in the United States does it make sense to follow these rates when it comes to American stocks but if it’s Canadian stock would it be best to use the Bank of Canada rates? Or if I’m a Canadian would I always use the rates determined by the bank of Canada because I depend on the Canadian dollar?
Unfortunately today the stocks are high and rates are low :-)
Thanks Preston
So the Fed creates short term business cycles and also tries to influence longer term business cycles. Am i right?
WOW!!!, I have completed course 1. So excited to move on to the next. Still so much to learn. Thank you!!
Preston, thank you so much. I understand. :-) So it is all begin from interest rate (10 year federal note interest rate, which is level 1 risk). Since the interest rate will change, the bonds' price will change, then YTM will change. Is this right?
So when interest rates climb sell out of all your stocks and buy bonds? and vise versa?
Can we use to same principles for real estate investing? I am a passion architect who loves real estate, I don't find reading financials very attractive.. still I am learning a lot from these videos.. will I benefit from them in future as a real estate investor? Also, should I just focus on real estate because I understand them and love them truly or is it important to diversify to become a great investor.. please do reply Preston! Thank You.. :)
This guy has created a masterpiece if you see this I am very grateful for your free courses thank you kind sir
excuse me, I'm a newbie here. Would someone mind explaining to me how to work out the Monthly payment and total interest during 7:27 ? Thanks in advance
+ParkBom Pham I am also curious about that..
+ParkBom Pham I am also curious about that..
+ParkBom Pham It is pretty simple once you understand and implement the proper equation. some back drop. First you need to know about what a perpetuity is. A perpetuity means that you will be getting or paying out a constant cash flow forever. Say you bought a perpetuity that will pay you 1000 dollars a year for the rest of your life. If you wanted to know how much you would have pay today (present value). You would take the Cashflow C(1000 in this case and divide it by r( the interest rate) Let's say r= 10%. To calculate the PV of this perpetuity PV=1000/.10 PV = $10,000. Easy right?
Another term you need to know is an annuity. It is just like a perpetuity in the way it pays out constant cashflows, but it is only for a certain time period. In this example we will say it is only going to pay you $1,000 a year for 5 years.
To calculate the PV of an annuity you would take the PV of a perpetuity that starts today and subtract it by another perpetuity that starts 5 years from now.
That equation looks like this
PV = C[PERPETUITY today - PERPETUITY 5 years from now.]
PV = C[ 1/r - 1/(r(1+r)^t]
All I did to make things easier was factor out the Cashflow from the two perpetuities. With proper numbers that will look something like.
PV = $1000[1/.10 - 1/(.1(1+.1)^5]
PV = $3790.786
In this case the 5 year 10% $1000 perpetuity would be worth $3,790.79 today.
As I said earlier annuities and perpetuities can be paid to someone. In this case if you got a loan/mortgage to help pay for something, you would use the annuity formula to determine your monthly payments like we did in the video.
For the video example let's look at the 15% rate.
The car is worth. $30,000 and we have $5,000 on hand. Our loan amount will be $25,000. This $25,000 will be our PV for these annuity calculations.
We know PV = $25,000, the interest rate = 15% and the term (t) of the loan is 5 years.
P.S. it is important to note that with car loans and home loans(mortgages) you will be paying on a monthly basis. This means you will have to factor 12 payment periods per year. Or that n = 12. I will show where n comes in later.
So our initial equation looks like this.
PV = C [ 1/r - 1/(r(1+r/n)^(n times t)
We did r/n because the interest rate gets chopped into 12 equal payments for the year.
And we multiplied 5 times 12 because we have to account for each payment over the 5 years.(12 payments a year for 5 years)
With numbers the example will look like
$25,000 = C[ 1/.15 - 1/(.15(1+ .15/12)^(5 times 12)
$25,000 = C[3.5029]
divide both sides by 3.5029 and we get
25,000/3.5029 = $7,136.97. If you stop to look at the example above you will see that this number equals how much of the loan you will pay back each year.
If you divide $7,136.97/12
you get a monthly payment of 594.75.
If you multiply $7,136.97 x 5 and add in your $5,000
you get a total(adjusted) payment of $40,684
And if you take the adjusted price and subtract it by the original price of the car you get how much you pay out in interest.
$40,648 - $30,000 = $10, 684 in interest.
This is long winded, but I hope this helps.
Best,
Kevin
+Kevin Wint ok, u blew my mind, i ll be going through this some time lol, thanks!
+TTTT glad I could help. I started studying finance on my own about a month ago and I was definitely in your shoes not to long ago. Best of luck in your journey to becoming a master of money!
Hi Preston...great work!! I really like ur content and delivery. Keep up the good work.
Btw I had one doubt...I may be wrong but stock prices actually rise when interest rates are low right? So instead of buying a good stock when interest rates are low, shouldn't we wait for the interest rates to rise and consequently, the stock price to decline and then buy the stock?? And sell it when the rates decline again.
I can’t thank you enough sir you’ve changed my life
Aziz Kerimkulov could not agree more, i used to get frustrated when these daytrader TH-cam gurus would give advice that does simple nothing .
Hi everyone
*Can someone clarify for me please?*
I understand buy Bonds when Interes Rates go high to get a higher interest rate but on the vid 7. What are the components of the bond he said When Interest Rates Go Up, Bonds Go Down.
How is that possible Isn't a contradiction?
Thanks!
Let’s say interest rates are 5%. You buy a $1000 bond with the 5% ($50). If the fed lowers interest rates to 4%, the bond will be worth more because new bonds will have a 4% coupon. So people will come and try to buy your 5% ($50) return bond and bid up prices till the return is 4%.
Thanks just finished your first course and learnt a lot!!
When the market crashes and the interest rates are lowered, should I buy an old bond with a high coupon rate from someone? Especially when I'm expecting the market to make new lows
How do you estimate the return value?
hey preston, very good videos just wondering how you came up with the numbers of comparing the two cars?
Thank you so much
Thanks for this course. Looking forward to Course 2. Been tuning into the Podcast as well. Great work. Well done! Haven't invested a penny yet but hopefully in the next year or two after I feel more comfortable. Don't feel like I have enough knowledge or money to invest yet. This helps tremendously. Keep it up.
how are coupon rates determined? is it the same as the interest rate?
Thanks
I really like the course but this video seems puts the fed forward as some stabilizing entity but does not acknowledge the role they played in creating the easy money standards that led to the bubble. The Fed did NOT see the bubble coming like you said as was obvious by the words of Bernanke leading up to the collapse
Ya I think Preston is not wrong but he isn't right either. The fed did see the recession coming but they didn't expect it to be so fucking massive. Which is why I agree more with you that even if the fed saw it coming they didn't know the true impact of the subprime mortgages defaulting would have on the economy.
Hi Preston, thank you for the videos and all the effort you put to make this valuable knowledge available for everyone, really appreciate it.
I know this is not the appropriate place to ask this question but since I'm here already I'll just go ahead.
Do you honestly think that the knowledge students get from business schools is worth that fortune?I personally have never seen or heard of an academic reached a millionaire status.
FED is abbreviation for Feder Reserve in the US which prints money and manipulates interest rate or other.
could you pm a link to the forum? I am interested.
These videos are incredible. About to Stab Course 2!
This is only for countries where interest rates is being controlled by the government right? What about for my country whereby the government controls the foreign exchange rate?
Thank you very much! 😑🙏🏼
Excellent music as always too 🎼😑👌🏼
Preston, thank you for your videos! I was wondering why banks such as Goldman Sachs, Bank of America, etc. have more book value than their market price. Some of them seems like a great value investment, but I cannot help but feel like I am missing something vital. Why would they undervalue their stock so far under their book value?
Looking back now I'm sure your question will be answered 😉 (coming from a BAC shareholder)
I really need to note that the FED is in fact UNCONSTITUTIONAL. Also that they do NOT know what's best for 'stimulating' the economy. Best we can do in the current situation is be knowledgeable of the FED's manipulation and react accordingly. Great series by the way! I'm going to recommend this to all my friends! (:
I didnt understand How will market fall if the FED raises the Interest rate..... When interest rate raises, the spendings of people on things fall, accepted. But how do u relate that to market movement.
Ravi Teja No loans so no peoole buying the stocks this mean price of stock will fall down i think sorry for my bad english :P
Ravi Teja, lets use an extreme example. Let's say the interest rates were 1% and now the government has increased them to 10%. Lets also say the average return in the market is 5%. Do you think people will put their money in bonds to get interest or put their money in the market? People will be more likely to take their money out of stocks and put them into bonds, thus the market falls.
*Financial Fitness: Investing and Personal Finance Videos*
I'm actually referring to the quality of knowledge I get from business schools, professional investors don't adhere to the academic approach to investing, for example, academics say, the riskier it is the more return you get, value investors say, the least riskier it is the more return you get, academics rely heavily on complex formulas and let them dictate their actions, value investors do better by relying on their own analysis and investigations, that's what my question is about.
If the FED highens the interest rates, it is true that spending habits are reduced, *but won't the debt rise as a consequence* ?
I think that's _not_ a suitable strategy to prevent a bubble from happening. It seems to accellerate the rate of debts!
Is there maybe a program that allows you to test investing in stocks like a meta trader 4 demo account does for forex investments?
suggest any trading channel
Great series, Preston!
Yes I will. Thank you so much!!!
Thank you Preston,
Your lessons are very informative.
Vera
But what if stocks are in a bubble AND the interest rates are low which is the case right now? :/
+SoCalFreelance damn thats pretty insightful I didn't realize that was the case
+gains I forgot about making this comment. And of course I was correct about the bubble which popped in August. However I was expecting a much more dramatic reset. In no time at all we are back into the same bubble conditions as before. Where is all this investment coming from that would have the DOW at nearly at 18,000 again. My sense is banksters/fraudsters are waaaay too leveraged. The FED can't raise interest rates again because doing so would expose all of the bloated investments causing another 2008 style crash. Deregulation of our financial system has been a nightmare. The more I research more I understand how f'ed we are as a nation.
I understand the basis of what the fed does and why. However, I'm completely baffled by the "how". In particular, how do they raise interest rates? Do they have authority to tell banks what interest rates they can give? Or do they indirectly do it through some other means... maybe via what they charge banks to back things like bonds or something like that. That's assuming they back bonds and stuff... just tossing that out there.
do you know any good online discount brokers?
Got the book. Creature From Jekyll Island By G Edward. I will Read it in free time. Thanks for your suggestion.
These courses are vicious. This is some of the most important education I've received my whole life.
Thank you 🙏
I appreciated your work!
Hi Preston,
Thanks for the videos and the valuable information. The lesson on Fed was an eye-opener. I was under the impression that Federal Reserve was being controlled by the Federal Govt or its associate organizations. Surprising to know that its controlled by banks and individuals. In the light of sub-prime crisis it looks ironical too.
The FED has been playing with fire for a while, let me tell you that. As in everything that's been abused for too long, there will be a day of reckoning. I hope and pray we won't have our pants down when it finally happens.
Awesome, thank you very much !
Just thank you, godspeed
Thank you Sir.
i love these vids Preston, youre like my sensei
Thank you so much again!
amazing! big thanks
neither do I, thanks Preston
Great
DIAMOND
END THE FED!!!
Thank uuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuu
I disagree with him. When interest rates are high, you should buy stocks then because they're cheap.
If you disagree with him why are you here then? Shouldn't you be out getting rich or proving your method is better than his? Go make a course on how your methodology is better and stfu. Your logic doesn't make sense.
who gets the money the FED prints? ...
What do you do when both bonds and stocks are not worth it? :)))) lol
"There's some very smart people running the FED" I cringed.
A monthly payment for a car?? lol ppl buy it cash?...
Before video: Arg, let's see if my MASSIVE confirmation bias against the FED will be the same after this video. I strongly dislike the Federal reserve bank of america because:
- It is not Federal, it is owned by private shareholders
- It does not have any reserves it has infinite power to print any amount it likes.
IMO the FED created the conditions leading to the crash, and now it has basically held interest rates at zero for 10 years.
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Post video:
I agree with the theory of this video but the actions of the FED (pre and post crash) contradict the theory.
Ben didn't see the housing crash coming (he even said there was no housing bubble), and now the stock market is in a massive bubble with near zero interest rates. If the FED wanted to prevent a bubble interest rates should be much much higher than they are today.
I think the FED has stoked the fire.
Someone respond to this comment in 2 years time and call me out if I'm wrong!
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But yeah, all your videos thus far have been excellent and I will continue to watch them.
The fed does not print money.
But grandma, why do you have such large teeth? I'm trying to maximize employment, deerie (OH! But I didn't tell you at lowest wages possible, jejeje I'm wicked!)
*#EndTheFed*
पप
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