SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Ask Michael Burke
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: BGR who wrote (55117)4/8/1999 9:34:00 AM
From: Freedom Fighter  Read Replies (1) of 132070
 
BGR,

>>Now suppose that you invest in the MSFT bond and Michael in the FBN bond. Also,
let's suppose that at the end of the year, FBN actually doen't default. So, your returns
are less than Michael's. But does that mean that Michael is a better investor? Certainly
not, as he just assumed more risk and could have lost his capital outright. In fact, if the
original risk adjustment and interest rate settings are accurate, both of you have exactly
the same acumen as an investor.<<

I don't want to get too involved in this discussion because I know very little about MPT. But I may be able to bridge the gap between Mike and yourself somewhat.

Perhaps Mike (and I can't really speak for him) feels that a good investor is someone that generates high positive returns "period".
An investor of that sort chooses from all the available investment options and asset classes and finds the best value available at the time. He assumes that the risks and rewards among various asset classes change all the time.

Someone who presumes that a certain asset class is less or more risky at any particular snapshot in time may be very far off base even if correct in the very general sense.

So someone who produces let's say -5% against a benchmark that produced -10% seems superior by MPT, but looks real bad to many other people because they believe that a superior investor should have recognized the lack of value in that area. (more often than not)
Similarly, allocations according to asset class formulas of any sort are an attempt to relieve oneself of the chore of making tough investment decisions and allowing time to forgive the sins.

Perhaps it's just a matter of the thought process.

Wayne
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News