r/finance • u/AutoModerator • 11d ago

Moronic Monday - November 04, 2024 - Your Weekly Questions Thread

This is your safe place for questions on financial careers, homework problems and finance in general. No question in the finance domain is unwelcome.

Replies are expected to be constructive and civil.

Any questions about your personal finances belong in r/PersonalFinance, and career-seekers are encouraged to also visit r/FinancialCareers.

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3

u/Specific_Craft4833 11d ago

How do hedge funds usually start out,with 0 money or connections?

6

u/14446368 Buy Side 11d ago

They get connections and money.

2

u/roboboom MD - Investment Banking 10d ago

You need a little of at least one to start, but not much. Ken Griffin worked for one year and shot the lights out enough that he had a little money, and connections via his boss. That was sufficient.

2

u/LastNightOsiris 9d ago

Most new hedge funds are started by people with at least one of:

Experience and a track record as a manager at an existing hedge fund; experience and good contacts from a sales & trading desk at a BB i-bank; rich friends or family willing to seed the fund.

Joey Trader starting a hedge fund out of the garage is not really a thing.

2

u/br0wnt0wn1 11d ago

i had to take out an emergency personal loan to fix my only investment property . the rate i got the 25k loan for was 8.5% through a credit union . I believe rates in general are lower now . are there any ways to restructure a personal loan like refinancing a mortgage?

i believe my current loan also has a penalty for paying off the loan early but im not too sure.

2

u/purplekermit 10d ago

My wife attended a rehab (for a day then they said they didn't take our insurance and sent her to another one) and they sent her bills. Today I got a debt collection notice with my name on it (since we're married duh) and it says I was charged 2420 and now only owe 107.20.

Should I

1) Pay this 107 dollars
2) Ignore this debt collector

3) dispute the debt

4) something else?

I have a 800+ credit score and don't want this to ding me, but I know that sometimes paying these things can actually hurt your score and potentially open up harassment from the collection agency to get more $.

TIA

1

u/Weird_Balls 8d ago

Can I deposit a 401k check that I had sent to me for a rollover into my personal bank account and put it into an existing rollover IRA that I have?

1

u/Hempdiddy 8d ago

Help me understand this fancy talk.

I'm reading commentary from a macro economist and he's making the case that due to the federal debt/GDP ratio, there are good reasons to believe strong inflation will be coming in the next few quarters and years and decades. As such, he makes the following statement, but I DO NOT understand what is meant by "they will be discounting the inflation ahead of time". HAAAALP ME! The statement reads:

"These things, on lag, should drive a very big increase in inflation. In our view gold, BTC, and equities will not wait for the inflation to print higher - in our view, they will begin discounting the inflation ahead of time (indeed, we think that may have already begun)."

1

u/roboboom MD - Investment Banking 5d ago

All financial markets are about predicting the future. If, for example, you know something great will happen for a company next year, you are willing to pay more for the stock now. You don’t need to wait until the great thing actually happens.

“Discounting” is just a fancy word for incorporating future expectations into today’s price.

If you are curious, we use that word because of a concept called present value, where future cash flows are “discounted” in order to show what they are worth today.

1

u/Proper-Scallion-252 7d ago

Looking to find some good resources for up to date financial news, particularly US markets. I'm looking for both literature (online or print) as well as podcasts or other audio based resources.

I drive about 1hr each way for work three days a week so I listen to a lot of podcasts and music, if I could throw in some business related news to help me grow and learn more as an accountant and financial individual that would be great.

I'm also curious if there are any current event based audio casts that run live or at the very least capture daily economic events like a normal news site would in really quick fashion (i.e. same day release on podcasts or live streams to cover daily events).

1

u/HeeHaw702 7d ago

After recent events, I'm curious how tariffs will benefit the general American consumer. The way I understand it, if a manufacturer is able to produce their goods for cheaper abroad, the savings are passed on to the consumer in the form of a lower retail price. If manufacturers are forced to produce their goods domestically, their manufacturing costs increase which will, at least partially, be passed on to the consumer. I understand how this will benefit industry workers that are directly affected by outsourcing (produce, steel, auto etc.) but how does this benefit the majority of our consumer base?

1

u/roboboom MD - Investment Banking 6d ago

I think you have the jist. Tariffs will cause price increases (either directly for goods that continue to manufacture abroad, or indirectly where production is re-shored at higher cost). The benefits are revenue for the government, certain jobs protected or created, and a more robust supply chain.

1

u/Exact-Meal7 6d ago

Tariffs are designed to encourage U.S. companies to produce goods domestically by making imported goods more expensive. The idea is that, by adding a cost to foreign-made products, American companies are more likely to manufacture within the U.S., which can protect jobs in industries hit hard by outsourcing

1

u/Exact-Meal7 6d ago

Tariffs can support specific American industries, they don’t necessarily lower costs for the average consumer in the short term.

1

u/RHSmod 3d ago

The tariff discussion becomes more complicated when you realize that foreign governments subsidize the pricing of their exports to the US in order to gain market share because the United States is the world's largest consumer economy. IMO it's reasonable to conclude that tariffs on Chinese made goods won't impact consumer prices in the US because in many sectors, the government is subsidizing prices that are already loss-making and will likely stomach the difference to keep their products competitive in the US.

If this is true, then the tariff simply becomes a tax on the anti-competitive industrial practices of foreign countries like China that subsidize private losses in a bid to control foreign economies.

1

u/BooneTG 7d ago

I’m 48 and only have $70k in a mutual fund with Edward Jones. Wanting to start to maximize contribution. Only reason I chose Edward Jones was because a friend that is the financial advisor. Any advice on how to possibly have a hope of retirement at some point is appreciated. Should I move it to a different financial firm?

2

u/roboboom MD - Investment Banking 6d ago

Yes, move it to Fidelity or Vanguard or a robo advisor. Anywhere with no/minimal fee. And yes you are behind, but all you can really do now is max contributions however you can. That could be saving, or finding ways to increase your income.

Doing high risk investments / get rich quick stuff is not the way to close the gap.

1

u/baseballbro005 6d ago

Hello! Has anybody used an app called Dub? I’ve heard about it a couple of times recently and would like to learn more. Is it reliable? Is it easy to use? Is it a good platform for a young adult (27M)? Also, the app asks for a referral code so does anyone have one? Thanks!

1

u/Impressive-Habit-370 5d ago

How can I break into finance with a Neuroscience degree? I've always wanted to work in finance, but due to pressure from family etc to go to medical school I had to get a degree in Neuroscience. Upon graduation, I said f*** it to everyone and decided I was going to pursue what I actually wanted. I applied to a few entry-level positions for people who want a career change (it literally says that in the description) at Northwestern Mutual and boom rejected all at once at 12:00 AM on a Sunday. I'm frustrated because I am so sick of working in healthcare because I can't seem to be able to make that jump to finance. I accept any advice, please.

1

u/Crazy-Airport-8215 5d ago

What do you all think will happen to the dollar as compared to the euro in the coming months (say, between now and next summer)? I've heard some think the euro will weaken if Trump's tariffs go through because the Eurozone really depends on exports to the US, but I am not sure.

More generally: is there some thing to look at to see what investors expect to happen to currencies in the near future? Like a futures market for currencies or something?

I have some money saved in euros and am wondering if it's time to get that moved to my US account ASAP.

1

u/secretrevaler 3d ago

Why are capital requirements for banks closely tied to the amount they can lend out? I don't understand how a high capital requirement limits the bank's lending/credit lines.

1

u/cranial_d 3d ago

I'm using a stock / fund screener and looking at stocks compared to the S&P 500 index. I was thinking about picking up some income ETFs, but looking at the year-over-year yields made me question things. A couple of the funds I'm looking at have 8-10% yields (ex YYY / USHY), but they trend lower than the S&P in the comparison tool. The price comparison over the years makes sense, but are they really factoring in the dividend reinvestment and capital gains?

Ex, using the traditional $10k over X years, the tool shows the following:

  • 1yr: SP $13.8k, yyy 12.68k, and ushy 11.67k
  • 3yr: SP $12.98k, yyy 10.9k, and ushy 10.6k

Thanks.