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A chance to vent...

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Ok, first up i've never blogged before and never thought i would... but hey.

One thing that constantly frustrates me is the lack of good financial education in Australia. Here we are in the middle of a boom (bears may differ lately) and yet the government is doing nothing to educate people on how to better their own economic position.

I study a Finance degree at an un-named South Australian Uni (theres only 3 of them) and some of the things we are taught is ridiculous.

In a course covering basic share market learning, we are taught high risk = high return. Nowhere in any contact is this explained that it is dependent on the companies etc etc. Allthough admitedly there is a small paragraph in the textbook about how risk does not ensure return (but how many people read the text?), the major 'lesson' i would of got out of it if i didnt know better was high risk = high return.

Another example is PE ratios. I've never used PE's massively in my investing which is a personal choice. But here they are saying high PE = good, Low PE = bad. And yet low PE co's tend to outperform high PE co's. I even quizzed the tutor about this asking them 'what about a company like PDN with a PE near 100?' and they seemed to be confused and didnt know that there were companies with PE's that high and i was just told the exact same thing high = good.

Personally i dont really care as i do external readings, investing etc, but all those people who take uni eduaction as gospel may struggle to find jobs. Or no wonder all the 'analysts' and some fund managers have no idea these days.

Its just a shame that i need the peice of paper to get the type of career i want, so i have to stick at it and tell them what they want to hear in exams. Only a couple more years ...

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Updated 8th-September-2007 at 07:22 PM by prawn_86

General Thoughts


  1. vishalt's Avatar
    Yeah you're right, finance is a really niche market in Australia, the way I learnt was by watching alphatrends.blogspot.com (he's an American) and just learning off my Dad, and he 's not a financeer either.
  2. tech/a's Avatar
    Ask yourself this.
    "What do I need to know to make better than above average returns in the market"
    Infact Business/Property.

    Now Ive been pretty successful by the standards of many in all fields.
    I can tell you now its in the APPLICATION NOTthe research.
    Do your degree but invest through EXPERIENCE this will come and so to will the understanding of my statement.

  3. chops_a_must's Avatar
    Nothing is being done to improve education levels anywhere, in any field by the feds. Especially in humanities.

    So ask yourself this, why is it in their best interests to keep people dumb?
  4. theasxgorilla's Avatar
    I don't know if they want to keep people dumb, but more and more I notice in Australia that the trend it toward pushing people to help themselves more and more. It's a very Darwinian way of running the system, and can be argued from both sides to have merit or detriment.

    If I was to compare the financial awareness of the average Aussie with other parts of the world, including the US, I'd say we're well up there at the top. DIY super is a good example of this. Sure, everyone will point to the obvious response: people are going to blow themselves up when their retirement savings are needed most. This is probably going to be case for some, if not many...but after enough horror stories people are going to learn and Aussies at all levels of society are going to be the most advanced investors in the world because they learned how to beat managed funds on their own.

    It's not difficult you know. Sit in cash until a good market comes along and take positions in a non-market-cap weighted fashion. You'll outperform the index every single time during a bull market, and compounded over a life-time you'll make a fortune. Am I being too blue-eyed? I have faith in Australia I think our system breeds strong, hard working, DIY natured people. The world needs more of that.

    University isn't a bad place to begin...and being able to critique your lecturers is a paramount sign of maturity in your own education. You can't design beyond it if you don't understand why what you are learning is insufficient.

    Good on you for questioning Prawn86.



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