It is a very simple idea to use the power of compound interest

It is a very simple idea to use the power of compound interest  Smart people are easily attracted by complex things, and underestimate the great influence and importance of simple ideas. But Monish Pabrai is a full pragmatist, and he will not fall into this trap. "It is a very simple idea to use the power of compound interest, a very simple idea to imitate, and a very simple idea to be honest." He said. However, when you apply some powerful ideas with great enthusiasm, the cumulative effect is "incomparable".

what is the relationship between interest rate and inflation?


In the upward cycle of interest rate, there are often several situations.

For example, inflation increases, and the prices of bonds and stocks fall.

The first is inflation.

Public expectations of future inflation will affect the current interest rate level.

If people worry about inflation in the future, the current interest rate level will increase accordingly. For example, the yield of 10-year Treasury bonds will increase.

The so-called inflation, our more intuitive feeling is that prices are rising.

Because inflation is often measured by the prices of consumer goods and services closely related to residents.

Like the frequently mentioned CPI, consumer price index.

This index has different algorithms in different countries, and the rules of the index will also be modified.

However, in China, we usually look at the price trend of more than 200 common consumer goods and services related to residents' daily comparisons.

If the price index goes up, it also means that inflation will be higher.

If inflation increases, interest rates tend to rise.

For example, this year, the yield of 10-year Treasury bonds of US stocks increased, which is also because of this reason.


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