Mithril Money

In this lecture we explain what a convertible bond is, why they are issued, who issues them, how generally speculative they are, and what the terms are about used to describe them. These terms include conversion ratio, conversion value, conversion percentage, conversion premium, and so on.

The full YouTube playlist of Securities Investment 101 lecture videos can be found by clicking here.

Please read our disclaimer.


Eamonn Butler: Austrian Economics – A Primer

by Andy Duncan on 31/03/2014


For those who want to find the very quickest route into Austrian Economics, there’s an interesting primer written by Dr Eamonn Butler, of the Adam Smith Institute. You can buy a copy here, and you should be able to download a free PDF of the book, by following this link:

For those who like even-handed books, it’s an excellent introduction.

For those who prefer something a little more hardcore, I’m afraid you’ll still have to hit Murray Rothbards ‘Man, Economy, and State’.


Matthew Kerkhoff Interview: Is Gold Facing a Headwind?

March 27, 2014

Research director at Dow Theory Letters, Matthew Kerkhoff, tells listeners how Dow theory itself relates to gold and other precious metals. Also discussed is behavioral finance, market psychology, and the current global situation involving Russia, China, and the western world.

Read the full article →

Implementing Convexity, Lecture 026, Securities Investment 101

February 10, 2014

In this final one of our bond duration and convexity lectures, we apply the lessons learned in the previous lecture to start calculating convexity and using it to make more accurate price predictions for bond price changes, whenever interest rates change. Previous video, Calculating Convexity, Lecture 025 Next video, Convertible Bonds & Conversion Percentages, Lecture […]

Read the full article →

Calculating Convexity, Lecture 025, Securities Investment 101

December 18, 2013

In this lecture we calculate the convexity for an annual-paying bond. We do it first by building up an Excel grid, showing how each element of convexity is calculated. Because Excel (rather strangely) does not have its own built-in CONVEXITY function (similar to DURATION or MDURATION), we also cover how to build your own personal […]

Read the full article →

Explaining Convexity, Lecture 024, Securities Investment 101

December 7, 2013

In a non-mathematical way, and before our next lecture on actually calculating convexity, we try to explain why convexity has to be taken into account, particularly for large interest rate moves in either direction. At the limit, interest rates moving down have a proportionally larger and larger effect on bond prices. Similarly, interest rates moving […]

Read the full article →

Modified Duration, Lecture 023, Securities Investment 101

December 5, 2013

We conclude our lectures on ‘Duration’, before we move on to ‘Convexity’, with an explanation of ‘Modified Duration’ and its importance in predicting how individual bond prices will change on specific interest rate changes. In passing, we cover the ‘MDURATION’ Excel function, and also dabble a little in different coupon payment frequencies, such as Annual, […]

Read the full article →

The Importance of Macaulay’s Duration, Lecture 022, Securities Investment 101

November 29, 2013

In this lecture we discuss the importance of Macaulay’s Duration, particularly to anyone holding large bond portfolios. In passing, we show how and why zero coupon bonds have a duration identical to their maturities, and why the anticipated directional moves of interest rates are so critical to bond traders and pension fund managers. We also […]

Read the full article →

Calculating Duration, Lecture 021, Securities Investment 101

November 25, 2013

Before we delve deeper into the mysteries of duration and convexity, now is a good opportunity to actually calculate duration, at least in its form as an average weighted cashflow period, known as Macaulay’s Duration. We do this both the long way, from first principles, and by using Excel’s built-in ‘DURATION’ command. Previous video, Securities […]

Read the full article →

Introducing Duration, Lecture 020, Securities Investment 101

November 22, 2013

In the first of a series of videos, we begin to delve into the complex subjects of bond duration and bond convexity. This first lecture begins to introduce the topic of duration and why we need it to anticipate bond price changes after expected (or unexpected) changes in required market interest rates. Previous video, Money […]

Read the full article →