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In this video, you will learn about anchoring and adjustment. #anchoring #adjustment #wallstreetmojo #decisionmaking #cognitivebias #subconscious Chapters: 00:00 – Introduction 00:24 – What are anchoring and adjustment? 01:23 – Mechanism 02:27 – Anchoring and adjustment examples 03:19 – Anchoring and adjustments heuristics in finance 03:56 – Conclusion What are anchoring and adjustment? When one gives a person a piece of information initially, they stick to that or anchor it while making any decision. It is known as anchoring. A person may deviate from the anchor and make some adjustments. But they shall always stay within the purview of the anchor, and any decision they take will be in line with the anchor. (Explained in detail in the video) Mechanism Anchoring is a cognitive bias where people rely more on the facts when making decisions. While anchoring is a cognitive bias, adjustment to an anchor is a conscious decision that a person takes. Adjustment may allow a person to deviate from the anchor, but it shall always stay within a range that is in line with the anchor. Now, one may induce this concept of anchoring and adjustment in 2 ways: Anchoring via suggestion – When someone else gives the information, it becomes the anchor. Subconscious anchoring – When one is given information by anyone else, the anchor is set subconsciously by the person taking the decision. Anchoring and adjustment examples The concept of anchoring and adjustment can be seen in how used car salesman and clients negotiate the value of a car. The same can be seen in salary negotiations between hiring managers and candidates. (Explained in detail in the video) Anchoring and adjustment heuristics in finance This concept of anchoring and adjustment can be observed in finance too. But unfortunately, financial analysts often let their cognitive biases creep in while they prepare financial models. According to Phillip Tetlock, a financial analyst would better prepare a financial model if they took multiple ideas or perspectives into consideration rather than sticking with one idea only. (Explained in detail in the video) This was all about anchoring and adjustment. So, please like the video and subscribe to the channel so that you don’t miss the content we come up with regularly. ========================================================================== Subscribe to Our Channel – Youtube ► https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1 LinkedIn ► https://www.linkedin.com/company/wallstreetmojo/ Facebook ► https://www.facebook.com/wallstreetmojo Instagram ► https://www.instagram.com/wallstreetmojoofficial/ Twitter ► https://twitter.com/wallstreetmojo

There are several factors to consider when analyzing a company’s DSI. These include: • The company’s DSI relative to its industry • Trends in the company’s DSI over time • DSI in conjunction with other metrics • Caveats that can make DSI misleading This video will discuss all of these factors in detail, and give several examples of current companies' DSI. 0:00 Introduction 0:17 Industry factors 1:49 Example of DSI for discount retail stores 2:33 DSI of Walmart vs Target 4:21 Trends in DSI 4:49 Trends for discount retail stores 5:20 What does an upward spike in DSI mean? 6:59 Other metrics 7:47 Caveats 9:16 Conclusion — Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world. — SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS: • A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING • A 44-PAGE GUIDE TO U.S. TAXATION • A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS • MANY MORE FREE PDF GUIDES AND SPREADSHEETS * http://eepurl.com/dIaa5z — SUPPORT EDSPIRA ON PATREON *https://www.patreon.com/prof_mclaughlin — GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT * https://edspira.thinkific.com — LISTEN TO THE SCHEME PODCAST * Apple Podcasts: https://podcasts.apple.com/us/podcast/scheme/id1522352725 * Spotify: https://open.spotify.com/show/4WaNTqVFxISHlgcSWNT1kc * Website: https://www.edspira.com/podcast-2/ — GET TAX TIPS ON TIKTOK * https://www.tiktok.com/@prof_mclaughlin — ACCESS INDEX OF VIDEOS * https://www.edspira.com/index — CONNECT WITH EDSPIRA * Facebook: https://www.facebook.com/Edspira * Instagram: https://www.instagram.com/edspiradotcom * LinkedIn: https://www.linkedin.com/company/edspira — CONNECT WITH MICHAEL * Twitter: https://www.twitter.com/Prof_McLaughlin * LinkedIn: https://www.linkedin.com/in/prof-michael-mclaughlin — ABOUT EDSPIRA AND ITS CREATOR * https://www.edspira.com/about/ * https://michaelmclaughlin.com

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In this video, you will learn everything you need to know about American depositary receipts. #americandepositaryreceipts #adr #wallstreetmojo #foreigncompany #stockmarket Chapters: 00:00 – Introduction 00:22 – What are American depositary receipts? 01:29 – Types of ADRs 02:21 – Advantages of ADRs 03:03 – Disadvantages of ADRs What are American depositary receipts? An American depositary receipt allows investors in the US to purchase shares of companies situated and listed on stock exchanges of other countries. J.P. Morgan was the first to create an ADR in 1927, in which they enabled Americans to invest in a British company, Selfridges. Currently, the US stock exchanges have thousands of ADRs traded representing various companies from various countries. (Explained in detail in the video) Types of ADRs Now that you’ve understood what an ADR is, you should know that there are mainly 2 types of ADRs, sponsored ADRs and unsponsored ADRs. In sponsored ADRs, the banks issuing the ADR, and the company whose ADR is being issued, have a legal relationship. In an unsponsored ADR, the bank and the company do not have any legal relationship. (Explained in detail in the video) Advantages of ADRs When it comes to ADRs, both the company that issues the ADR and the investors that purchase the ADR can benefit a lot. It allows companies to access capital from investors in other countries, and the ADRs can also be used during mergers or acquisitions. For an investor, it allows them to own shares of foreign companies, and it also helps them diversify their portfolios. Disadvantages of ADRs Firstly, unsponsored ADRs may not comply with SEC rules. Hence it may be safe to purchase such ADRs. Secondly, ADRs may not be available for every foreign company. Hence investors may not get lots of options. Finally, investors may be taxed double on the dividends they receive through ADRs if there are no proper tax laws to govern such arrangements. This was all about American depositary receipts. We regularly upload videos on such topics, so make sure you subscribe to the channel. Also, don’t forget to like the video. ========================================================================== Subscribe to Our Channel – Youtube ► https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1 LinkedIn ► https://www.linkedin.com/company/wallstreetmojo/ Facebook ► https://www.facebook.com/wallstreetmojo Instagram ► https://www.instagram.com/wallstreetmojoofficial/ Twitter ► https://twitter.com/wallstreetmojo

In this video, you will learn about a concept known as base rate fallacy and how you can overcome it. #baseratefallacy #decisionmaking #wallstreetmojo #investing #trading #stockmarket #behavioralfinance Chapters: 00:00 – Introduction 00:33 – What is base rate fallacy? 02:43 – Example of base rate Fallacy. 03:44 – How to overcome? What is base rate fallacy? Many investors and traders fall for something known as base rate fallacy. It is a key concept in behavioral finance, and it was pioneered by 2 Israeli psychologists, Daniel Kahneman and Amos Tversky. (Explained in detail in the video) Base rate fallacy is a human tendency to give more importance to particularly small data over a large set of data that sets the base rate. Base rate fallacy refers to people misjudging events by focusing on events that they feel are more relevant, and they ignore events that are, in turn, the most relevant. (Explained in detail in the video) Example What would you do if a company with a bad track record released a good earnings report? Would you invest in that company because it had a good performance, or will you avoid investing in it because it has a bad track record? If you choose to invest in it, you have fallen for the base rate fallacy. (Explained in detail in the video) How to overcome? You should stop making decisions based on a new piece of information and consider the overall context set by past data. If you want to invest in any stock or other financial instrument, you should do that with a long-term mindset. It will allow you to think deeply and not rush into it. (Explained in detail in the video) If you do not have much investing experience, you can consider consulting someone with ample knowledge and experience in investing. This will save you from making poor investment decisions and costing you money. We regularly come up with such content on finance, so do subscribe to the channel if you don’t want to miss out on our content. ========================================================================== Subscribe to Our Channel – Youtube ► https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1 LinkedIn ► https://www.linkedin.com/company/wallstreetmojo/ Facebook ► https://www.facebook.com/wallstreetmojo Instagram ► https://www.instagram.com/wallstreetmojoofficial/ Twitter ► https://twitter.com/wallstreetmojo

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In this part 2 video of algorithmic trading, we will dive deeper into the topic of algorithmic trading. #algorithmictrading #financialtrading #wallstreetmojo #algo #bottrading Chapters: 00:00 – Introduction 00:27 – Algorithmic trading strategies 00:52 – No. 1: Trend trading 01:12 – No. 2: Mean reversion 01:35 – No. 3: Arbitrage 01:58 – No. 4: Index fund rebalancing 02:17 – Components 03:39 – Example The strategies that the biggest algo trading firms use can be really complex and complicated at times, but here are some commonly used algo trading strategies. (Explained in detail in the video) Trend trading The price trends just 30% of the time, and if you can catch those trends, it could fetch you some really big profits. (Explained in detail in the video) Mean reversion A mean reversion strategy looks at past price movement to analyze how far or close the price is currently from its equilibrium price or the mean price. This is a rather more advanced type of deployment strategy, but it sure does fetch some decent returns if done right. Arbitrage Arbitrage is when there is a mismatch between the prices of the same thing in two different markets. Arbitrage opportunities do not stay for long, but if you have an algorithm that looks to spot such opportunities and trade them, then you can capitalize on them. (Explained in detail in the video) Index fund rebalancing Index fund portfolios often need rebalancing as the price of each stock changes. Hence, investors use algorithms to bring their portfolios in sync with the index and maintain the correlation between it and the portfolio. Components If algorithmic trading has piqued your interest and you want to build such a trading model for yourself, then here’s what you’d need. (Explained in detail in the video) Firstly, you’ll need to have quite some knowledge about trading strategies, and also about computer programming. Next, you’ll need to have some really good computers that can sustain the load of such high-paced and intensive work. (Explained in detail in the video) The next component would be network connectivity. Without this, it’ll be like you’re on an island without any contact with the world. Finally, you’ll need to have some system in place that can check whether your strategy is performing as per your requirements or not. (Explained in detail in the video) Example Say that you’ve come up with a strategy to trade stocks, but you don’t have the time to sit in front of the screen the entire time, or you are not that quick with executing the trades. You can hire a programmer to build a computer code based on these rules and deploy this in the market. The algorithm would automatically take the trades based on the rules, and you won’t have to do anything. This was all about algorithmic trading, and we hope you’ve learned a lot in this 2 part video series. Don’t forget to subscribe to the channel and also like the video. ========================================================================== Subscribe to Our Channel – Youtube ► https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1 LinkedIn ► https://www.linkedin.com/company/wallstreetmojo/ Facebook ► https://www.facebook.com/wallstreetmojo Instagram ► https://www.instagram.com/wallstreetmojoofficial/ Twitter ► https://twitter.com/wallstreetmojo