I can easily get intimidated by the prospect of reading the CAIA textbook with only an economics degree and training as a linguist. And yet, I have decided to plow it through as I have already bought the book, which cost me dearly. The book has over 800 large pages in small print.
To my relief, the book starts in a casual and friendly tone. The passage below is particularly amusing:
… a pension fund would consider holding the publicly traded equities of a major corporation but may be reluctant to hold collectibles such as baseball cards or stamps.
Writing a technical book in an intuitive way can be a challenge, but readers like me certainly appreciate it.
Surprisingly, CAIA categorizes non-financial intangible assets, such as patents, copyrights, trademarks, music, film, and royalties, into real assets. By “real,” the term indicates a connection with consumption, such as consumption of knowledge or entertainment. In contrast, financial assets that are connected to the earnings of companies are not real assets, as earnings are not consumed.
Also surprising is the fact that CAIA considers private equity includes debt positions because they are highly risky.