>>11228826What kind of topics might be interesting for investing or analysing the stock markets? I would say:
• Stochastic Calculus: it doesn't reflect reality perfectly, but it is useful to get an insight about how certain processes might work;
• Econometrics - Time Series: you can create some fancy models for predicting future returns and build confidence intervals for your forecasts;
• Risk Management: it isn't too difficult, but it is useful to better understand how much you might lose if things go wrong;
• Numerical methods for Finance: sometimes a Monte Carlo simulation is all you have/need to understand how a quite complex security works.
Since I wrote this list quite quickly I probably forgot something, but there is another point which I would like to make clear.
Will this stuff help you to better understand the stock markets? Probably yes. Instead of merely clicking on a button and hoping that the price will go up, you will have more information.
Will these topics help you in getting a consistent positive return? Probably no. Either your ideas are too trivial and the price already includes the expectation that you have or the results of your analyses give you a very poor fit. I applied some quite complex models for forecasting in a project in the past and the results weren't really that useful.
So keep in mind that, while firm like Renaissance Technologies or D.E. Shaw are fascinating, Warren Buffet is one of the wealthiest people in the world and he probably doesn't know what a random walk is. You might be better off investing in an ETF which replicates the S&P 500 without paying exorbitant fees, saving the need to spend hours studying topics which might not interest you.
