Well, the topic says it all. But, I’m wondering if in the long-term, will Finance be something that is viable and will not be completely wiped out? I realize that the service sector along with others are going to be crushed in the United States during the upcoming years.But, will there still be feasible oppurtunities abroad (Switzerland, Hong Kong, New Zealand etc) or is this major a dead end so to speak?
I don’t mean to bother anyone here on the Mises forums with questions like this, but I like collecting as many views as possible when making a decision such as this one.
Finance is only contracting in the United States - where legal immigration restrictions after 9/11 have prevented foreign businessmen from entering and working with American financial markets.
Hence, European and Asian financial markets have overtaken the once dominant American financial markets and are still growing.
Hong Kong and Shanghai are alone two giants in the financial sector, whose currency trading markets are growing enormous.
But let’s remember this - financial sector will never die. Financial sector is the mother of all other industries. All other industries need capital markets to fund them. All other industries need capital markets for treasuring their short-term deposits. Industries can’t survive without raising funds from capital markets. Availability of financial institutions distinguishes the poor world and the rich world, and the rich world alone remains a better investment than the poor world by virtue of being the rich world. Hence, as long as there are more people needing a better standard of living, there will be financial markets needed to transfer funds from savers to businesses. If that stops, civilization dies.
Also remember - I am reading a lot of mainstream books on finance (Frederic Mishkin, John C. Hull), while doing independent reading of dissenters like Nassim Nicholas Taleb. A lot of finance books are written by non-practitioners and include bell-curve garbage like the ones preached by Black, Scholes, and Merton, whose own firm collapsed. Taleb is heavily influenced by both the Austrian School and Benoit Mandelbrot’s French school of statistics and became a multimillionaire that way. Mainstream finance discourages technical analysis, while most practitioners make huge money from technical analysis. But both mainstream and fringe are a large supply of accessible and abundant knowledge that will guarantee you six-figure paychecks, earnt from making seven-figure earnings for your firm.
Well, what finance books would you reccommend? I recently finished “Lies the Government told you” by Andrew Napalitano (not-related) and I am almost finished with “Hot Commodities” by Jim Rogers.
Now that you mentioned Taleb, I’m considering buying Black Swan today. Any other financial books that come to mind?
A book on a very specific topic of financing brand new businesses, Entrepreneurial Finance, published by John Wiley & Sons, was one that I found very interesting.
It’s big. It’s textbook big.
But it’s a practitioner’s book, rather than a theoretician’s book. So no garbage on Efficient Market Hypothesis, or other things which exist only in fantasies of professors of finance.
Rather, it deals with how you actually sit down and convince the investor to invest in a risky venture that has a chance of not making money and failing. It’s about how you actually make sure the business has enough cash to keep running through its first months when it just has losses and hasn’t started making revenue. And it’s about you understanding the difference between your interests and his interests.
My parents used to read that book on running their risky but ultimately very successful small e-business. Few entrepreneurs succeed on their first venture, so my parents were very lucky. I saw that book with them and asked if I could borrow it.
Any other Austrian-influenced finance books? I can’t wait for Taleb’s book to come in this week! I just finished “Lies the Government Told You” and “Hot Commodities” yesterday. Right now, I’m getting started on “Limcoln Unmasked” by DiLorenzo until Taleb’s book comes in.
I’m about one hundred pages into Taleb’s The Black Swan and I would reccommend it to anyone that has interest in Austrian economics or finance. Taleb has a very interesting method of illustrating his main thesis- personal or fictional stories. Apparently with the newer versions of the book, Taleb has written an essay on the current crisis.
Other than that, anyone pick up a decent book that is finance related? I’m looking for a book to pick up in addition to Nullification with my next purchase.
Yes, and more than that, it’s fascinating. I thought it’d be a dull subject but the module I did on Finance was great. A lot of the economics it incorporates is at least better than what you’d learn in a pure econ module.
Taleb is a good critical thinker, and his ideas on randomness are great, but he’s not really Austrian (except for his admiration of some ideas of Hayek). In the Black Swan he pushes US Treasuries as the riskless asset he has held 90% of his assets in for decades. The biggest black swans of them all are hyperinflations or massive drops in the value of currencies, one or the other of which seems more likely with every passing day. And his discussions of previous bonds losing a lot of value doesn’t seem to have much theory behind it, he presents them as black swans.
But don’t take this as a recommendation to not read Taleb’s books, they’re both great.
I’m pretty sure he’s not 100% Austrian, but so far The Black Swan has been a blast to read. I’m about a 1/4 of the way through and it’s been highly enjoyable thus far.