Introduction to Global Economics (What, Why & How of this Section)

-: It's time for you to rotate in to the economics department of our firm. So, let's talk about the what, why, and how of the global economics for financial analyst portion of this course, which is what we will focus on actually for the next four sections of the course. Let me kick it off with the what. We will learn about three global organizations that matter most to financial analysts. The International Monetary Fund, the World Bank, and the World Trade Organization. In terms of why, why are we starting a financial analyst course by studying the global economy? Because, as financial analysts, we must understand that quite often the success of our financial investments that we work on are significantly influenced by international economics, okay? And many times, we get fooled by randomness. We don't focus on the global economy, and we just focus on individual stocks. Our stocks move, and we don't know why, but quite often it's because of a macro shock. Sometimes those macro impacts on a company can have much more of an impact than positive earnings or positive growth, okay? Don't worry, I'm not gonna cover any boring theory, this will be all practical stuff you can use. And also, when you rotate in to the investment banking portion of our training program, you're actually going to be able to advise your clients on the right timing for an initial public offering. If you don't understand global economics, then it can be catastrophic, right, if you tell a client to go public at the wrong time. Okay, and so we're gonna be recommending, hopefully, to Tony Shark and his company Shark Virtual Reality, when he should do the IPO. And don't worry at all, please. This will all make much more sense to you after we're done with the whole macro side of this course. The point here is that if you get the macro wrong, then the micro is meaningless, okay? So, as such, we're gonna focus on top-down right now, meaning understanding the fascinating bigger picture of a global economy, okay? And then we'll focus on bottoms-upward, financial statements, evaluation, equities, etc. later in the course, okay? When I worked at Goldman Sachs, and its various hedge funds, during our morning meetings before the stock market opened, our research analysts, or portfolio managers, would often start the meeting discussing macro events that might impact stocks, okay? Separately, when we analyze companies, we look at how much money they make, which is called revenue, you know that, right? Then we deduct expenses in order to calculate their profit. Now, I bring this up because similarly, when we analyze countries, we look at it the same way. Except revenue for a country is often referred to as GDP or Gross Domestic Product. Okay so, in part one of the macroeconomics portion of this course, we're also going to discuss how and why do the value of currencies increase or decrease. It's very important, okay? We'll also learn about what is called monetary and fiscal policy, and how governments can stimulate the economy using monetary and fiscal policy, and how they change interest rates. It's fascinating how it works. In terms of how, how are we gonna learn these concepts? Well, we're gonna have many Excel exercises in this part of the course. So, where can we download a lot of this global macroeconomic data for free, and then analyze it using Excel? Well, we can get it from the International Monetary Fund's website. So, the International Monetary Fund, which is also called the IMF, is where we'll begin with our economics discussion, which I'll explain in the next lecture. And in terms of the portfolio dashboard, which again, is saved as portfolio dashboard as an attachment in Excel format in section one of the course, by the end of sections three to six, which are the four economic sections we'll be discussing, you'll understand why we like to list these macroeconomic drivers on this dashboard. You know, you gotta keep an eye on some of these factors, depending on what sector you cover, what region of the world you're in, etc. If you're curious about the conditional formatting here, these cool flags and streetlights or whatever, we'll talk about how to do that later on in the course. That's called conditional formatting. Okay, I hope you enjoyed this section, thank you.