Wall Street – Money never sleeps

As a finance student I have been interested in Wall Street because it’s significant place on a financial field. Last winter I was in New York City and our host wanted to take me there. He has always lived in New York and he had quite interesting stories to tell. In addition to that I read A few books about Wall Street and I used internet sources to find more information. Wall Street is a big part of the American’s economy and that economy is big part of our world’s economy. Therefore I think it is important to know about it.

Wall Street is a street located in Manhattan in New York. It was named after an earthen wall on the northern boundary of the New Amsterdam settlement. Its Dutch name is De Waal straat. It is a financial district and there is New York Stock Exchange, the world´s largest stock exchange. Several other substantial companies and exchanges have headquarters there. Wall Street is one of the world’s primary financial centers.   It used to be the most significant in the world but in 2007 London city built up as an international financial center. In 2001 45% of Wall Street’s “best office space” was destroyed because of the World Trade Center attacks.

Even though there has been a few stock market crashes the worst of them was the Wall Street crash of 1929. It began in October 1929 and it was the most devastating crisis in the history of the United States. That crash had a major impact on world’s economy and it was the most visible signof the beginning of the global recession. Some people thought that banks were too eager to put deposits at risk on the stock market and that caused the crash. Recovery of rate to the level it was before crash took 25 years.

As I mentioned earlier I read books about Wall Street and there were many opinions how to survive and act on Wall Street. One book was written by Barry Ritholtz who is one of today’s most popular economic bloggers. Ritholtz says in his book that Wall Street has long been a brutal meritocracy. (Meritocracy means for example the administration of company or state where your success is based on your skills). He thinks that people who work in stock, bonds, options or commodities in Wall Street have a strong sense of fair play. Success is based on skills and wisdom, ability to identify opportunities while managing risks. “Eat what you kill”, is a classic way to think in Wall Street. I think this is the right way to think because of course you have to take responsibility for your actions.

Another book I read has very interesting tips how to make money in stocks. The author tells you why you’re losing money and how you get it back. He also gives you three main reasons why do the great majority of people who buy and sell stocks lose. The first reason was that people overtrade or buy and sell too much for their capital. The following reason was that they do not place stop loss orders or limit their losses. The last and the most important reason was lack of knowledge.

The author gives an example how many things could go wrong. One thing leads to another.

People buy stocks and hope that it will make a profit. They trust on somebody’s opinion without any concrete knowledge of their own. The timing might be wrong and they don’t recognize that mistake or attempt to correct it until it’s too late. Finally they sell because they fear stocks will go even lower. Often they sell out near low levels. In case like that they make two mistakes, they get to the market on wrong time and they get out at the wrong time. I think that when buying stocks you should have enough information about the company.

The Wall Street Journal is named after the street. It is an international daily newspaper with business and economic news. The Journal is the largest newspaper in the United States.

There are many movies and books about the Wall Street.

 

Sources:

Sorkin, A. 2009: Inside the battle to save Wall Street. Too big to fail, too good to put down.

Ritholtz B., Task, A. 2010: Bailout nation. How greed and easy money corrupted Wall Street and shook the world economy.

Wikipedia Wall Street http://fi.wikipedia.org/wiki/Wall_Street

Wikipedia Wall Street Journal http://fi.wikipedia.org/wiki/Wall_Street_Journal

 

 

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3 Responses to Wall Street – Money never sleeps

  1. seijamikkonen says:

    A very informative post and quite interesting facts about Wall Street.

  2. terooksanen says:

    There is many good points in your blog! Keep on going!

  3. meproblogger says:

    I liked your personal experience about Wall street visit! Personal opinion is much more interesting than book source..

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