What I learned in this chapter is how the financial markets work. The financial instruments must be of some value so that buyer and seller found themselves better off after making the trade/deal. It's divided into four needs. The first one is raising capital. It means that we can borrow money in order to make investments. I found out that very little loans that can be provided to people in developing countries can actually fight poverty and help people start or create something of their own (like the birth clinic of the African woman). Secondly, use excess capital efficiently- make a profit of it by renting it to other individuals or companies. Next, risks are everywhere and we need to protect ourselves from them by insurances. Fourth is the speculation, in other words "betting on short-term price movements".
The basics of investments were pretty clear to me, the only thing that made me think more was the point "diversify". Wheelan suggests that the outcomes of the investments we make should be independent from each other (uses the example of flipping coin in this part).
A new idea I was brought to was the one with standing in the checkout line in a grocery store. I am always looking for the line which seems to be the quickest, but so do all of the other people. Everybody is looking for the same thing and so we allocate and act accordingly. "everyone else has access to the same information..."
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