[MUSIC] Hi there. So, in this module, what you will learn is the major asset classes. We'll start with fixed income, and includes also money market, then we'll move to equities. We'll also look at currencies and how they should be treated, whether it's a separate assets class or not. By now, you should have a little hint of what to answer to this question. And we'll get some notions here of the risk that is associated to returns or risk adjusted returns, we would get the first notion. Also in this module, we will find out how to evaluate a company and how we can make recommendations by hold sell on the specific securities, generally we talk here about stocks. I'd like to give you an example of risk and this comes in the form of a quiz. Do you believe that money market instruments are cash. We often say, cash as king. People rush for cash when there's trouble on the stock market. So, do you believe that cash is totally devoid of risk? Is a risk free? This is a quiz to you. Think about this for a minute. Do you think that a fiduciary deposit, money market instrument has no risk at all? Okay. So, to illustrate the fact that money market instruments can be risky, let me give you this example. Which I personally experience while I was head of research in a private bank here in Geneva. This goes back to January in 95. At that time, we found that a trader based in Asia, actually made some very risky bets on the stock market. What he did was the following, he was actually a specialist in derivatives, in option trading. And it was, he took a bet. We call this a short straddle, so without going into the technical details on how this works. Basically, he was selling insurance and he was betting that the Japanese stock market and the stock market in Singapore would not move by very much over the next couple of days and it did that with a lot of leverage. So boring a lot of money, fine, he was betting on that. So just, he was betting on stability. But, what happened and that's a black swan actually, it's a very unlikely event as we have seen in the videos. Remember where there is animals and the black swans, well this is a black swan that happened, the earthquake in Kobe. And this is January 1995. So, when the earthquake happened the stock market just tumbled, and this trader had immense problems. And what he did is try to recupe his losses by taking even more risk, okay? And ultimately the bank he was working for, a UK bank, actually went belly up, and the company had to be sold for just a symbolic pound. Okay, so I'm going to say well, what's the link between this trader losing his shirt and making the bank he's working for go belly up, go bankrupt, the bank going bankrupt? That can happen. And the fact that money market instruments can be risky. Well, at that time, January 95, I was working for this private bank here in Geneva. And we got a call a few days after we find out that the bank has gone bankrupt from this customer saying actually, you know what I have a fiduciary deposit which is in the name of this bank, and it was quite a large sum, I remember. Just under 1 million Swiss franc. And so, this client calls and say, what is now the problem? Is there a problem with my deposit? Can I get the money back? And basically, we had to inform this investor that the piece of paper it had with the name of the bank on it and saying here is one million Swiss Frank deposit in this fiduciary account and this money market instrument was worth Zilch, was worth zero, because the bank had gone bankrupt. So, this investor found out that money market instruments can be risky if they're issued by a firm, a company, that goes bankrupt. So, this is what we call credit risk. So, we find out here in this module that this is the kind of risk you can be exposed to, even when you buy bonds. Bonds, even government bonds, can default. Corporate firms can default. Banks can default, but also government. And so your piece of paper, be it just a bond or a money market instrument, can become worthless. [MUSIC]