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To: Chuzzlewit who wrote (140)	2/8/1999 12:46:00 PM
From: Reginald Middleton	Respond to of 419

Beta measures vary dependant on where you get them from. I had numbers from credible data vendors that disagree with your numbers, but it has happened before. There is a lot of academic work which practically kills beta as a risk measure, for beta does not adequately track the return of a stock in the long run. My example of MSFT holds (I forgot the data source, try Barra or Valueline). Look into the Journal of Financial Engineering and/or the white papers published by McKinsey and company. Many already believe beta is dead (the efficient market theory certainly is). If volatility and risk were one and the same, then two assets with the same volatility should pose the same risk to two disparate investors. This is not necessarily the case since each investor has unique requirements. Take the example from my previous post where I classified the greater uncertainty as less risky given my requirements for return and my perception of the future. This would even be true if historical volatility were to remain constant. Again, the reliance of static numbers in a dynamic environment does not work. Think in terms of financial planning. Equities are historically more volatile than high grade fixed income, yet relying on high grade debt to retire is often more risky due to the likelihood of foregoing income/gains to retire comfortably (inflation, maintaining quality of life, etc.). This holds true for institutional investors as well. If volatility simple equaled risk, this would not be the case. I am blowing a lot of time with these posts, but I do enjoy the debate.