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“You have to like it first of all” - with Arek Balcerowski about the work of an analyst and the world economic situation
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“You have to like it first of all” - with Arek Balcerowski about the work of an analyst and the world economic situation

created Natalia BojkoDecember 27, 2019

The current geopolitical and economic situation may indicate the first "symptoms" of the crisis. Not once have we come across newspaper headlines that threaten us with a deep recession, without a deeper economic analysis of the global economic situation. We discussed this topic with our next guest during talks about the work of an analyst. Arkadiusz Balcerowski, known for blogging InsiderFX, he agreed to talk to me about his profession and his daily routine analysis.


Be sure to read: "You have to trust yourself" - interview with Dorota Sierakowska about the work of an analyst, raw materials market and investing


1. On your blog - InsiderFx you publish a large amount of macroeconomic analyzes. Could you tell about your beginnings with the analytics world?

Arkadiusz Balcerowski: The beginnings were quite prosaic, and the topic began to interest me at the end of the third year of study. At that time, I was indispensable for health reasons, and I "bored" boredom browsing the Internet in search of a forum, where I could learn more about investing in the stock market. During this period, it was also time for the first investment on the WSE, but without much knowledge. Soon I became more and more interested in macroeconomic topics, and because I had a lot of free time, I was able to track what was happening in the economic world throughout the day to regularly inform users of one of the thematic forums. It was one of them that made me try to write a blog. From the first post his form evolved strongly, but his enthusiasm did not disappear.

2. What advice would you give to a person who would like to tie their future with financial markets? Do you think you need special skills or is it just a matter of good education?

In my opinion, you have to like it most of all. It is not 8 hours a day work, but it practically consumes you completely, or at least me, because it deals with global macroeconomics, so ... a bit of it 😉 Knowledge will certainly be useful at the very beginning to understand the various market and economic mechanisms that are a kind of primer in this industry. Certainly a person with economic studies will be better prepared to work in this field, but it does not mean that someone with a degree completely unrelated to economics cannot think about such a job. It's all a matter of determination, interest in the subject and inquisitiveness.

3. What literature would you recommend to start with? Is there a book, film or other publication that has made a special impression on you? Has she changed her view of analytics?

I will not propose one item that will be good for everything. For a completely green person, I would recommend academic textbooks on micro and macroeconomics (for example by Begg / Fischer / Dornbusch), financial markets (even Jajuga's famous position), and people with more general knowledge would suggest to focus largely on publications of international institutions such as BIS, IMF, World Bank, etc. Of course, the daily press and the most important, i.e. analyzing various information and building a macroeconomic and market scenario on their basis.

4. Could you tell us a few words about your approach to analysis? Is there something you pay special attention to?

Personally, I prefer a quantitative approach, which may be due to my specialization in college. In my workshop I use various types of econometric models, statistical relationships that allow me to quantify the size of a given phenomenon. Thanks to this, you can quantify phrases such as "slightly weaker", "moderately strong", "limited", which are commonplace in the economists' dictionary. I also pay a lot of attention to the quality of the data on which I operate, because I know that it can have a significant impact on the final modeling result.

5. Moving more to economic topics, how do you assess the current global economic situation? Do newspapers have grounds to hypotheses about the crisis awaiting us?

The past year has focused mainly on three events: US-China trade dispute, Brexit and the slowdown of the industry. In the case of the first two factors we have recently received a bit more clarity, but there are many question marks. In turn, industry stagnation is still ongoing, which has already become visible in Poland, and the soft indicators of the economic situation do not signal an imminent change, and at most no further strong falls. I believe that next year in both the global and Polish economy will be a continuation of the slowdown in GDP growth, but if the topic of trade war and Brexit is resolved relatively quickly, then I would expect a possible recovery in the economic situation at the end of 2020. As for the word "crisis" I would not abuse it. We are currently talking about a significant slowdown in Europe as well the beginning of the slowdown phase in PolandHowever, we are far from the crisis from a decade ago and I do not think that this will take place over the next 12 months.

6. In your opinion, will "lighter" global geopolitics improve the situation of the largest economies? By asking this, I mean, whether a positive end to the commercial dispute and a clear situation with Brexit will significantly affect economic growth?

The commercial dispute is not over yet, but only a thread of agreement has been reached, which can be broken abruptly at any time (we have already had cases). In the case of Brexit, it currently appears that some uncertainty will be with us until the end of next year after Boris Johnson has committed himself to legislative changes to ensure that the United Kingdom will certainly not extend the transitional period beyond 2020. It is during this period, which will probably start in February, that the terms of the trade agreement between Brussels and London are to be agreed. If time was not enough, and Johnson would still opt for leaving the EU at the end of 2020, then there is a risk of a lack of trade agreement, or reaching a version unwanted for London.


Read also: "Correct assessment of the situation does not guarantee success" - Bartosz Sawicki on the work of an analyst


7. Finally, what I would like to ask, are you investing on your own account? (If yes) What element of making decisions regarding the allocation of funds in a specific asset, do you consider the most important?

Due to my profession, I have some restrictions on investment, hence I have assumed a long-term nature and invest mainly in stable dividend companies. One of the most important elements in my opinion is the liquidity on a given asset, the lack of which can spoil even the best investment. Risk is also very important, namely not taking too much risk in relation to our obligations (a number of measures can be implemented here, such as the known Value at Risk indicator) or free funds. When I talk about free funds, I mean their level that exceeds our liquidity cushion, i.e. the amount saved (e.g. deposits), which will allow us to continue our standard of living even when we lose our job for some time (say 6 months). Such a strategy will allow us to sleep more peacefully and not look at the computer nervously every day checking the quotes.

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About the Author
Natalia Bojko
Graduate of the Faculty of Economics and Finance, University of Białystok. He has been actively trading on the currency and stock markets since 2016. It assumes that the simplest analyzes bring the best results. Supporter of swing trading. When selecting companies for the portfolio, he is guided by the idea of ​​investing in value. Since 2019, he has held the title of financial analyst. Currently, he is the co-CEO & Founder in the Czech proptrading company SpiceProp. Co-creator of the Podlasie Stock Exchange Academy project (XNUMXrd and XNUMXth edition).