Advanced Investments

Deepen your understanding of the financial markets with this course that teaches you to manage risk, seize opportunities, and balance active and passive strategies.
Advanced Investments is rated 3.5 out of 5 by 35.
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Rated 2 out of 5 by from I hope you can find parts of the course useful Did I learn something? Yes, however, I can’t recommend the course. 1. This is an Advanced Investments course and what was presented was at the level of the single factor, simple CAPM model. 2. The instructor spent a lot of time in a lot of chapters reading equation after equation, which added to the “droning on” aspect of a speaker and didn’t do anything to cement the equation’s application or put it in perspective. 3. In Lecture 8, the instructor establishes that going to five or six places beyond the decimal point is a necessary level of precision, because the variances at this level of precision “make a difference over time”. In contrast, he brings up idiosyncratic factors to explain variances from equation results, and after establishing idiosyncratic factors are important, says they can be ignored in aggregate, because they wash each other out. Do they? They might to some extent, but where did the precision go? It seems apparent, that for the sake of the model, we’re to pretend the idiosyncratic factors no longer exist. To confirm that data is thrown out if it doesn’t fit the model, the instructor says on page 111 of the accompanying book, “How do we get indirect utility functions for people in the market? The answer is that we don’t. Rather, we typically just assume some function that has features we like, such as that it’s easy to work with.” 4. No effort was made to suggest software and/or automated feeds to the data needed for the equations. It’s nice to see how the equations work and show relationships, but knowing how to obtain the data for each part of each equation would have made the course worthwhile. Just how usable are equations with incomplete data? a. The instructor paused a lot to explain things, which is good. However, explaining something as important as how to obtain data for equations only happened twice, which left me wanting? 5. He mentioned that working on investments could be a hobby and that enjoyment could also be factored into our equations. Then, without telling us how to factor it in, he moved to the next topic. He dropped the ball. He did the same thing for factoring in the human factor. 6. Why have an entire chapter on Liquidity? Since it was presented and kept as a separate topic never included in a model, it seems there are more important aspects of investments that should have been presented. 7. The instructor said the first six lectures were conceptual. One could easily make the case that the whole course is conceptual. a. It’s certainly not practical if one doesn’t know all the values for the equations. Even something as basic to this course as figuring out an Expected Return requires weighting the probability of each of the possible returns from a suggested sampling of one million. How practical is that for the individual investor? b. If done by hand, the nature of the equations would have a person’s life consumed collecting data and doing math – not practical. By the time the process would be completed, one has to acknowledge that 1) time has moved on and the results are not as relevant and 2) it’s time for newer data. c. In my experience with ten financial advisors, none of them were willing to say how they determined risk, or how dated the figures they used for risk were. None of them were concerned with the efficient frontier, the Sharpe ratio or anything presented in this course. They were all tied to asset allocation models and the amount of risk was simply chosen with the selected model. If the financial people and automated systems running investments aren’t using the content of this course, then the content of this course is at the conceptual level. d. After spending hour upon hour going through equations and learning market relationships, the last chapter explains how inaccurate the focus of the course, the CAPM model, is. i. It nullifies the importance of precision stated in Lecture 8. ii. The instructor then briefly mentions that the “Fama-French three-factor model augmented with the momentum factor” explains market behavior better. That’s it. He makes no attempt to show us how to use it. Drop the ball. End the course. 8. Many of the stated goals for the course were not meet. If the intent of the course were limited to teach us some relationships of market behavior and spend hours walking through equations, then the course was successful. If the course was to help an individual improve their investment returns, it failed me. SUMMARY: I did not find the course to be advanced or practical. I’m left wondering if this course was really meant for individual investors, as it purports, or people with financial modeling software. The course was primarily spent building and explaining relationships to understand the CAPM model, which was, at the end of the course, said to be a poor representation of market behavior. I felt cheated.
Date published: 2021-09-06
Rated 4 out of 5 by from VERY USEFUL INSTRUCTION My main issue is that the courses seem quite dated to the current time, almost by 10 years. This might not matter with History of Philosophy as much, but for more current titles like Investments they need to be evergreened.
Date published: 2021-08-11
Rated 2 out of 5 by from Needs work. Not an advanced class The name is wrong. This is not an advanced course at all. Barely an introductory and a bad one at that.
Date published: 2021-05-10
Rated 3 out of 5 by from What this course will teach you I have been an active investor in stocks and options for about 35 years and have been ver successful at this. This review is written after listening to a few of the lectures. As an investor, there are many aspects to consider. This course focuses on the mathematical aspects of investing. For instance, the math behind risk evaluation, pricing of stocks, etc. Also, you can learn about bond pricing for the different types of bonds. This can be helpful for analyzing the math of investing and calculating the risk of a portfolio, etc. But, it is not really necessary to know this in detail. Undoubtedly, it can be helpful and one certainly needs a basic understanding of these points, but investing is a lot more that than. One needs to know how to read financial statements, how to judge where the market is going, whether a stock is fairly priced given not only the math, but also it's current and future prospects, its debt load, and its management, etc., etc. You will not learn about these issues in this course. So, this is not really about "Advanced Investments". It about the mathematics of investing. If this would be helpful to you, then this course is for you. If you want to learn about advanced investing, then I suggest not to start here. My best suggestion for learning ADVANCED investing is to read books about shorting stocks. DON'T short stocks unless you have a lot of money to lose, but people who are good at shorting stocks know how to find the clinkers. Thus you can avoid losing money, which helps a lot. If you want to learn about investing and you have some, but not a lot of experience, don't start here.
Date published: 2020-11-29
Rated 4 out of 5 by from Great Information for Active Traders, But Not Pas He covered a large amount of difficult information. It was done clearly and concisely. In the last lecture he said that the material is for active investors. For those of us are more closely aligned with passive investing, the course contained great information, but very little will be of use to us as we invest. Because of this, I recommend it for active investors but not passive.
Date published: 2020-10-12
Rated 5 out of 5 by from Very Well Explained and Organized I have a strong background in the math that forms the basis for many of the quantitative measures used in finance, but I had not studied the finance measures before. I got this course to better understand these financial measurements, such as Beta and the Sharpe Ratio. I found Professor Slezak's lectures to be very well organized and very clear. I only had the audio version and found that the notes gave me all I needed to supplement them. By the end of the course I had achieved my objectives of understanding the quantitative measures. The math used and as explained by Professor Slezak is really not that hard; he does an excellent job of going just deep enough to explain the concepts. The sections on bonds is really just based on some straight forward present value equations; this is high school level algebra. I now understand what the duration measurement means; I had a misunderstanding before. The sections on evaluating securities are more involved, but should be understandable to someone with some basic courses in probability and statistics. These sections were for me the most valuable part of the course. If you're not willing to make some effort to understand the math, then this class is not for you. But if you have any background at all, then the course does an excellent job. You should not be intimidated. I would have liked it to have gone further into more examples of using the measurements. But that said, I now have enough to do much more on my own and to better understand more advanced discussions and explanations.
Date published: 2020-04-10
Rated 1 out of 5 by from Not sure how useful or relevant this is I am sure Professor Steve is very talented and smart. However, there is too much emphasis on statistics, which will leave most listeners confused. Overall no useful purpose. Do not waste your time. Sorry to write such a negative review, but that is how I would rate this.
Date published: 2019-08-03
Rated 4 out of 5 by from Probably should not be done in CD/Audio as there are tons of equations and calculations. You can still follow and get the concepts, but if you really want to drill down and understand it well, get it in DVD.
Date published: 2019-06-22
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Overview

Investing can be a valuable part of achieving your hopes and dreams. Now, in these 24 lectures by Professor Steve L. Slezak, learn practical techniques for analyzing if a potential investment is a good deal, for measuring risk, for determining the relative advantages of active and passive investments, and much more. This course is essential for serious investors, students of finance, asset managers, and investors who delegate management of their money to a professional.

About

Steve L. Slezak
Steve L. Slezak

As a professor, my job is not to simply provide information or to tell you what to think. Rather, I think my job as a professor is to teach you how to think for yourself.

INSTITUTION

University of Cincinatti

Dr. Steve L. Slezak is Associate Professor of Finance at the University of Cincinnati and Director of the university's Carl H. Lindner III Center for Insurance and Risk Management. He earned his Ph.D. in Economics from the University of California, San Diego. Before joining the University of Cincinnati, he was on the faculty of the finance departments at the University of Michigan and The University of North Carolina at Chapel Hill. Professor Slezak's honors from the University of Cincinnati include the Harold J. Grilliot Award for Exemplary Service to Undergraduate Organizations and the Michael L. Dean Excellence in Classroom Education and Learning EXCEL Graduate Teaching Award. He also received the Weatherspoon Award for Excellence in MBA Teaching at UNC, Chapel Hill. Professor Slezak's teaching focuses on investments, risk management, and insurance, and his research examines the adverse effects of informational problems on managerial incentives and risk management. The results of his work have appeared in top-tier finance and economics journals, including The Journal of Finance, the Journal of Financial Economics, The Review of Financial Studies, and the Journal of Economics and Management Strategy.

By This Professor

Advanced Investments
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Advanced Investments

Trailer

Investment Decisions and Goals

01: Investment Decisions and Goals

When it comes to wealth, more is better. But how important is liquidity to you? How important is risk? How important is being able to leave a legacy to members of your family or to causes you hold dear? As preparation for the course, consider these and other personal goals.

31 min
A Framework for Investing

02: A Framework for Investing

Learn how to layer various types of active management strategies on top of a passive market portfolio. Professor Slezak outlines three primary strategies: timing the market, reallocating money across sectors, and picking stocks that may outperform their sector. He also describes shorting and arbitrage.

30 min
Mistakes Investors Make

03: Mistakes Investors Make

It's easy to fool yourself when making important investment decisions. Examine three common cognitive errors: framing, biased self-attribution, and seeing patterns where none exist. These natural human tendencies highlight the need to avoid emotional or illogical reactions to financial information.

31 min
The Characteristics of Security Returns

04: The Characteristics of Security Returns

Review concepts from probability and statistics that are essential to know in investing. Focus on formulas that measure three characteristics of an asset: its expected return, its return variance (or volatility), and the covariance (or correlation) of its return with the returns on other assets.

32 min
The Theory of Efficient Markets

05: The Theory of Efficient Markets

Is it possible to make money by actively trading in the market? According to the efficient markets hypothesis, you are better off as a passive investor, because prices almost always reflect true value. Explore three versions of this theory, including the weak form, which holds that prices follow what is called a random walk.

31 min
Evidence on Efficient Markets

06: Evidence on Efficient Markets

Continue your study of the efficient markets hypothesis by investigating data from actual markets. Focus on momentum phenomena and volatility anomalies as possible evidence of market inefficiencies. Are these real opportunities to beat the market or only illusions that snare overconfident investors?

31 min
Valuation Formulas

07: Valuation Formulas

Explore one of the most basic building blocks of any financial valuation method: the concept of the time value of money. Obtain formulas for present value, future value, and net present value. Then use these tools to solve a problem in retirement planning.

35 min
Bond Pricing

08: Bond Pricing

Investigate bond pricing, which compared to stock pricing is beautifully predictable-if complex. Understand why interest rates vary across different bonds. Practice calculating the bond price for a given rate. Then take the price as given, and determine the yield to maturity.

32 min
The Term Structure of Interest Rates

09: The Term Structure of Interest Rates

At a given moment, interest rates vary with the time to maturity of different bonds. Examine the yield curve and the term structure of interest rates, learning how to weigh your investment choices. Discover that bond prices are a window to the expected future performance of the market.

33 min
The Risks in Bonds

10: The Risks in Bonds

Learn how to think about the risks of owning bonds. Start by considering interest rate risk. Then examine how default or credit risk affects the yields on bonds. While most investors only want to consider highly rated bonds, significant return can be earned by bearing default risk.

32 min
Quantifying Interest Rate Risk

11: Quantifying Interest Rate Risk

Get an intuitive feel for the features that raise or lower interest rate risk on bonds. Practice calculating duration, and discover that the time to maturity may not be particularly close to the duration of a bond. This underscores the importance of focusing on the duration of your bond investments.

31 min
Value Creation and Stock Prices

12: Value Creation and Stock Prices

Consider how the equity returns on two firms that are essentially in the same business can be very different based solely on differences in capital structure. Both can be efficiently priced, but one will have a higher equity return due to its higher leverage and resulting risk.

32 min
Present Value of Growth Opportunities

13: Present Value of Growth Opportunities

Use the formulas developed in Lecture 7 to analyze the present value of a firm under different scenarios. By employing a simple model, you will be able to identify how managerial decisions in a well-run company can lead to increased stock price.

34 min
Modeling Investor Behavior

14: Modeling Investor Behavior

Good investors are not necessarily those who can find good investments, but those who can predict what stocks others will pick. Learn how economists model investor behavior, focusing on the indirect utility function, which can predict people's aversion to variations in outcome.

32 min
Managing Risk in Portfolios

15: Managing Risk in Portfolios

Investors do not-and should not-hold just one security at a time. Explore strategies for combining securities into a variety of optimal portfolios. For any level of risk, such portfolios have the highest average return; and, for any level of average return, they have the lowest risk.

32 min
The Behavior of Stock Prices

16: The Behavior of Stock Prices

Learn to use regression analysis to quantify the characteristics of a security, particularly its risk and possible mispricing relative to an asset pricing model. One of Professor Slezak's goals is to introduce techniques that allow you to analyze data that is widely available on the Internet.

30 min
The Capital Asset Pricing Model (CAPM)

17: The Capital Asset Pricing Model (CAPM)

Study the characteristics of an equilibrium asset pricing model. Then build the most popular version-the capital asset pricing model (CAPM)-which allows you to measure risk for a portfolio. According to CAPM, the cross- section of returns is driven by common risks that cannot be eliminated through diversification.

33 min
How to Exploit Mispriced Securities

18: How to Exploit Mispriced Securities

Explore three steps for exploiting mispriced securities. First, investigate the strategy of short selling. Then, develop a measure of mispricing called alpha. Finally, use information about a stock's alpha and its volatility to form an optimal risky portfolio.

30 min
Performance Evaluation

19: Performance Evaluation

How do you know if an actively managed portfolio is producing worthwhile results? Survey several performance metrics: the Sharpe ratio, the Treynor measure, Jensen's alpha, the M-squared measure, and the information ratio. The measure you need depends on how you are using the portfolio you are evaluating.

35 min
Market Making and Liquidity

20: Market Making and Liquidity

Probe the nature of liquidity, learning how it is defined, how to measure it, and when to pay the market price for a liquid security. Many less-well-known stocks may be less liquid. But because they are less well-known, they are more likely to be mispriced, presenting potential trade opportunities.

32 min
Understanding Derivatives

21: Understanding Derivatives

Begin your examination of derivative securities, first by defining them and then by looking at option contracts called "puts" and "calls." Also examine how a lack of transparency in a type of derivative called credit default swaps contributed to instability during the financial crisis of 2008.

31 min
Using Derivatives

22: Using Derivatives

Investigate two uses for options: speculation and hedging. Follow the steps for betting on the direction of movement in the price of a security. Then see that hedging is less risky and can be compared to buying insurance. Learn that the important variables in a hedge are the hedge ratio and the option delta.

30 min
Pricing Derivatives

23: Pricing Derivatives

Continue your study of derivatives by looking at the two most popular strategies for pricing options: the binomial method and the revolutionary Black-Scholes formula. The key insight of these pricing models is that you can build structures out of existing securities that behave just like the underlying option.

33 min
Trade Opportunities or Risk?

24: Trade Opportunities or Risk?

Return to the capital asset pricing model introduced in Lecture 17, evaluating its effectiveness. Then analyze alternatives to CAPM along with anomalies that are at odds with existing models. Close by putting the course into perspective, stressing the wisdom and profit of trusting the market in the long term.

33 min