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To: ahhaha who wrote (10998)	6/11/1999 9:12:00 AM
From: red_dog	Read Replies (1) \| Respond to of 29970

It is interesting to find someone spouting MPT on the ATHM thread. You won't find ATHM in many theoretically correct portfolios since its risk isn't commensurate with its return. I believe your right, but why not buy T and get @home and excite for a discount, and reduce the risk.

To: ahhaha who wrote (10998)	6/11/1999 11:03:00 AM
From: BGR	Read Replies (2) \| Respond to of 29970

ahhaha, If you think that the academic position on modern finance is homogeneous, you need to study it more. It's not. Now. I am not sure what point the Merton story attempts to make. No one other than LTCM insiders know the black box model that LTCM used for arbitrage. Evidently it didn't work very well. Perhaps the fund investors should have stuck to investing in index funds (LTCM's average returns were higher than the index, but since one cannot measure the risk of their proprietory model, it doesn't say much). My point was not about ATHM. It was about market timing (the impossiblity of it, really). May I request you to kindly stick to the point? BTW,You know Sharpe? Wow! I am impressed! ;-) While you have a valid point re autocorrelation, can you show me one single study indicating that the effect of it is so pronounced as to nullify the effects of diversification altogether? I am all ears and eyes! And, if you bothered to actually read the reference that I provided before spouting such nonsense as compounding eating away long term returns, you would have found that the 10% return was a compound one. And, if one was to account for short term taxes, spreads and commissions, other studies (cannot recollect the reference of the top of my head) have shown that to be equivalent to about 13-14% averaged annualized. Apparently you want to take a higher risk to get a higher return (no problem there) but refuse to acknowledge that the risks that you are taking is indeed higher. From that POV, if you want to be rich tomorrow, why not try the Lotto? Personally, I prefer to remain an educated investor. I will leave the self-congratulatory ramblings and personal remarks sans information in the last paragraph unanswered. -BGR.