Posted on 10/13/2009 4:32:30 AM PDT by TigerLikesRooster
The future of investing: academics predict more complexity
By Maik Rodewald
Published: October 11 2009 10:21 | Last updated: October 11 2009 10:21
“A theory should be as simple as possible, but no simpler.” If one applies Albert Einstein’s words to a colourful basket of theses from leading US academics about the future of investing, it could look like this:
Andrew Lo of MIT’s Sloan School of Management provides the foundation of the theory. For one of America’s current academic superstars, it is pretty clear how the future must look: “We need to solve investors’ biggest problem – uncertain outcomes of risks and returns.”
Mary Schapiro, the new chairman of the Securities and Exchange Commission, works along similar lines. Her mantra: “How does this help investors?” is a simple and threatening statement set to challenge many in the asset management industry.
So far, so simple. However, beyond this basic plot, it gets complicated.
(Excerpt) Read more at ft.com ...
Ping!
Einstein tried to make a unified theory out of a number of things.
Most of which he stole.
He failed.
These guys could be following the same path taken by medieval astronomers. Their so-called Epicycle theory had to become ever-more complex to account for quirks from ‘strange movements’ of planets. To the point they are junked by later astronomers, especially Kepler.
” investors’ biggest problem – uncertain outcomes of risks and returns.” “
Econ 101 was a long, long time ago, but isn’t ‘uncertain outcomes of risks and returns’ what *makes* markets??
curiosity bump
Sure. But isn't that a zero sum game?
Can't have investors losing money, can we?
“We need to solve investors’ biggest problem – uncertain outcomes of risks and returns.”
Yep. That’s a big problem at the racetrack, too.
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