Spring is in the air and similar to the last three spring seasons, issues related to the Euro zone has taken center stage injecting a modicum of fear back into the capital markets. Although US investors were treated to an early fiasco in the form of the Italian elections, the banking disaster in Cyprus is… [Read More]
Economic Articles for Investors, Students and Educators
As value investors, we like to believe that most investment decisions should be based on the individual stock's investment merits. We think that whatever may be happening in the larger global or macro economic context, while interesting, ultimately has very little bearing on our investment results.
The classic value investing process starts with finding the intrinsic value of a stock and checking the stock price against this value. We take into account the individual security risk, determine the portfolio sizing, and establish the margin of safety we require. Then we invest (or not). Eventually, the stock reaches its fair value or our exit price, at which time we sell and book our profits
I agree with this process. However, it is worthwhile to keep an eye on the major global and macro economic trends and events for the following 2 reasons
- Trigger for Undervaluation: Markets go up and down all the time in reaction to political or other events. Ultimately, investors are human and as humans, they are ruled by emotions. Most financial decisions made in the market are not rational - they are a product of fear and emotion. Value investors wait for irrationality to take hold in the market as they tend to bring up many wonderful investment opportunities
- Catalyst for Value Realization: Do you think infrastructure stocks would do well if the US congress passes a massive infrastructure spending bill? Underinvestment in any given sector may have depressed the valuations for the stocks in that sector. These stocks are just waiting for the right moment to realize the value for the investors who were smart enough to anticipate some future event.
Traditionally, investments based on these ideas are termed as Macro and Event Driven investments. They are not necessarily value investing. However, at Value Stock Guide, we include many macro and event driven investment ideas in our value investing process.
You will find here Value Stock Guide's review of major world and economic events driving the markets and the investment outlook. Also below we include other websites that you will find useful to keep abreast of the most pressing economic topics and news of the day
Economic Articles for Students of the Markets
Economics is the study of money, business, and monetary policy. The economy is what shapes a nation’s profit and ability to operate on an ongoing basis. Economies fuel the world’s industry, and shape jobs, production, and standards of living. It is important for people to understand economics as well as how different economic policies work across the world. Students should have a proper grasp of economic terminology and how it relates to business and human standards. The following economics resources have been carefully chosen to provide a solid understanding of how the global economy works. Many of these websites deliver interesting and topical economic articles for students to use in learning and improving their understanding of the global economy.
The leader in economic news, The Economist is the world’s most popular economics related publication.
This website is a resource for students interested in economics as well as economic scholars.
The free public service magazine explores globalization and the endless connections of our world. Published by the Yale University
The home page for Harvard’s Department of Economics, a leading university in the subject.
Use the right hand side to discover different meanings of politically related economic terms.
Keep up with the latest in economic news at the Economy Watch website.
This economic educational organization is one of the most important and relevant to the world’s economy today.
An easy online economics lesson plan for younger grades about how the economy works.
An organization that focuses on economic education in a way that anyone can understand.
This site has plenty of economics and business related lesson plans to choose from.
Some basic principles of economics can be found here.
In depth educational resources to help students learn about the economy.
The home page for the Foundation for Economic Education.
This website has many resources, lessons, economics articles for students, and places to learn more about economics.
This site features graphs and charts to explain things like inflation, money trends, and more.
You can learn more about trading, stocks, and bonds without the risk at the virtual stock exchange.
This page contains helpful information about money and monetary policy.
This easy quiz helps teach the basics of economics.
This site has some helpful curriculum to teach students about the basics of economics.
An article that discusses the basic principles of economics.
Use this easy to use tool to help you determine the average cost of living based on the region chosen.
This insightful website provides economics information with a touch of whimsy.
Software that teaches economics and how it affects the entire globe.
Play this fun and easy game to teach you about basic economics and money making.
Learn more about the essential and important Austrian theory of economics.
This global forum has a focus on developing business throughout the world.
Part of the India Times, the Economic Times covers worldwide economic related issues and up to date news.
A comprehensive list of study guides covering many topics in relation to the economy.
Take a look at the United States’ current debt, in real time.
The BEA analyses and reports on current business and economic growth.
An interesting site that has basic yet very important economic information that every HS grad should know.
Interactive games, lessons, articles, and much more all related to students centered around economic principles.
A helpful website with links to more information about important economic topics.
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Some key macro economic concepts
The following are some of the key economic concepts you should know as you navigate the global economy.
|Deflation definition||Why is deflation bad|
After today’s stock market rally, does anyone even remember that just two days ago we received data that showed that the consumer confidence sunk to the lowest level since Mar 2009, a two year low? The CCI came in at 39.8 which was lower than most pessimistic forecast, according to the Bloomberg survey. So it… [Read More]
Media is having a field day discussing the nightmare that will unfold on the citizenry if US does default on its federal debt. No doubt that the possibility exists, and a US debt default will have a large impact on our personal finances. But as value investors, we are more inclined to look past short… [Read More]