Chapter1: The Investment Enviroment, ‘Investments’

An Investment is the current commitment of money or other resources in the expectation of reaping future benefits.

1.1 Real Assets versus Financial Assets
- Real assets : the land, buildings, machines, and knowledge
- Financial assets : stocks and bonds
 > They do not contribute directly to the productive capacity of the economy. Instead, these assets are the means by which individuals in well-developed economies hold their claims on real assets.
 > Financial assets are claims to the income generated by real assets.
- Investors’ returns on securities ultimately come from the income produced by the real assets that were financed by the issuance of those securities.

1.2 Financial Assets
- Three broad types of financial assets : fixed income, equity, and derivatives
 > Fixed-income or debt securities promise either a fixed stream of income or a stream of income determined by a specified formula.
 >  Derivative securities provide payoffs that are determined by the prices of other assets such as bond or stock prices
- The performance of equity investments is tied directly to the success of the firm and its real assets, Hence equity investments tend to be riskier than investments in debt securities.

1.3 Financial Markets and the Economy
Consumption Timing
- ‘Store’ is the way to shift your purchasing power from high-earning to low-earning periods
Separation of Ownership and Management
- Several mechanisms have evolved to mitigate potential agency problems.
 1. Compensation plans tie the income of mangers to the success of the firm.
 2. While boards of directors are sometimes portrayed as defender of top management and force out management teams that are underperforming.
 3 outsiders such as security analysts and large institutional investors such as pension funds monitor the firm closely and make the life of poor performers at the least uncomfortable.
 4. Bad performers are subject to the threat of takeover.

1.5 Markets Are Competitive
Efficient Markets
- The security price equals the market consensus estimate of the value of the security.
 > neither underpriced  nor overpriced securities.
- Passive management: Holding highly diversified portfolios without spending effort or other resources attempting to improve investment performance through security analysis.
- Active management: The attempt to improve performance either by identifying mispriced securities or by timing the performance of broad asset classes.

1.6 The Players
Financial Intermediaries
- To bring lenders and borrowers together.
- Advantages
 1. By pooling the resources of many small investors, they are able to lend considerable sums to large borrowers.
 2. By lending to many borrowers, intermediaries achieve significant diversification.
 3. Intermediaries build expertise through the volume of business they do and can use economies of scale and scope to access and monitor risk.
Investment Companies
- pool and manage the money of many investors, also arise out of economies of scale.
- Design portfolios specifically for large inventors with particular goals.

1. "증권화"라는 것은 유동성이 좋지 않은 즉, 현금화하기 어려운 부동산, 빌딩, 대체투자자산 등을 거래하기 쉽게 증권식으로 바꿔 증권을 발행, 유동성을 높이는 대표적인 방법입니다. 정확한 법적 과정까지는 제가 알지 못하지만 일반적으로 현금화 하기 어려운 자산의 유동성을 높이기 위함입니다. 가장 대표적인 것이 "ABS(자산유동화증권)", "MBS(주택저당증권)" 등이 대표적입니다.

2. 이러한 증권화를 통해 발행된 ABS, MBS 등이 남발되었던 것도 문제였고 이러한 증권화된 저당증권 등이 파생상품화 되면서 이른바 CDO(부채담보부증권) 등으로 잘 포장되었습니다. 즉, 유통기한이 지난 재료를 썼지만 겉은 번지르르하게 음식을 만들어 놓고 판 것입니다. 실제로 미국의 부동산 대출(서브프라임 등등)의 규모는 그렇게 크지 않았다고 합니다. 그런데도 위기가 컸던 것은 이러한 "파생상품"의 부실로 인한 것이었다 할 수 있습니다. 이 결과 대표적으로 터진 것이 2008년 9월 "리먼 브러더스의 파산"으로 귀결되게 됩니다.

3. 부실한, 가치가 없는 금융상품이 과대포장되서 매매될 때 더 나아가 특정 자산에 사람들이 미친듯이 열광할 때가 가장 위험하다 라는 결론을 도출해볼 수 있습니다. 실제로 당시에 가장 인기있는 투자자산이었기 때문에 투자를 하지 않으면 이상했던 상황이었습니다. 이러한 부실상품에 대한 정확한 변별을 해야하며, 대중이 열광할 때는 다시한번 그 상품을 제대로 들여다 볼 필요성이 있다 봅니다.

- 네이버