TSX:AX.PR.E - Post by User
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Torontojayon Apr 12, 2024 1:55pm
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Post# 35986240
RE:RE:RE:Macro vs. Micro Economics
RE:RE:RE:Macro vs. Micro Economics
BlueJay2020 wrote: The way I see it is probably very simplistic. If you're a macro guy, you really have no business investing down at the individual stock level - you'd be much better off index investing and trying to time the market, or at the very least go for thematic ETFs. There are too many variables down at the stock level and in fact I'm struggling to work out when a pure macro guy would ever buy an individual stock.
If you're a micro guy, the opposite applies and there's little point in investing in ETFs (of course you can have a mix between the two, and you probably should).
Where I see the value, and why I invest, is when the macro and the micro are temporarily diverging. This is really quite easy to spot - the difficulty is investing when the divergence is at it's greatest (or close enough too). I didn't achieve that with office reits and was underwater for a while as a result. I'm now above breakeven in totality, and with good prospects to make $100 to 200k profit across them all - eventually.
Im a macro guy which helped me pick good quality stocks over the years. Most people that studied economics probably took several accounting courses along the way.
I think the best investor is one that has a strong accounting background and a good overall understanding of economics. When I'm investing in stocks I analyze the financial statements, read as much past articles from the company as I can, and then I use macro data to support my bullish thesis. I don't buy or sell that much in a given year and I generally like to hold for at least 3-5 years. If things are going as planned, then I have no reason to sell.
Understanding accounting is a big plus for picking winners.