ShmoopTube

00:00

Finance a la shmoop...What is an alternative investment hmm well maybe we

00:09

should start with the opposite to define the term here sort of like with the fine [Good Housekeeping catalog]

00:12

people at Good Housekeeping do a primary or base or fundamental investment is

00:18

something easily tangible, understandable and definable like a collection of

00:23

stocks.. Primary also includes a collection of bonds simple like what

00:28

could be more primary than a t-bill or cash yeah cash that'd be primary lumpy [T-rex walking in a jungle]

00:33

mattresses well they're hard not to love so alternative is kind of the opposite

00:38

of these things mainly stuff like esoteric hedge funds, complex ownership

00:44

structures of real estate, or REITS - real estate investment trusts, commodity

00:49

ownership oh and fancy derivatives why is there a separate category for [Examples of alternative investments]

00:53

alternative investments well because when they go wrong they go oh so wrong...

00:58

and the people who own them mostly rich people and university endowments and

01:03

union pension funds those people have to sign what's called big boy and big girl [Person signs a big boy letter]

01:09

letters so that if they wake up one day in the home they thought was blessed by

01:14

the good housekeeping people is being repossessed well then the place they go [Woman opens door and reads notice of repossession]

01:18

to complain to the people responsible for making that stupid set of

01:22

investments is a mirror yeah it was clearly cracked and more than seven years

01:27

of bad luck coming... [Girl smashes mirror]

Full Transcript