Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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 -- Ignore unavailable to you. Want to Upgrade?

To: BGR who wrote (55013)	4/7/1999 4:22:00 PM
From: Cynic 2005	Read Replies (2) \| Respond to of 132070

<<Anyway, this is getting boring.>> No sh*t! -g-

To: BGR who wrote (55013)	4/7/1999 5:55:00 PM
From: Knighty Tin	Read Replies (5) \| Respond to of 132070

BGR, You are right. When one mentions the MPT gurus who have actually tried to manage money, most fans of the silly arithmetic do get bored. While all shareholders of such goofs got gored. <g> Here is a partial list of the hall of shame: 1. Merton and Scholes at Long Term Capital. These guys almost took down the entire financial system because their concept of risk was academic (read: ridiculously flawed) and not real world. 2. Harry Markowitz at Japan Equity Fund. A rousing -3.6% per year over the past 5 years. Only a Nobel Prize Winner in Economics could do that poorly and be able to explain why he did great with a formula on a blackboard. <g> 3. The Finance Dept. at Wharton, which mismanaged the money in the Penn endowment until the alumni screamed for their heads. Of course, they were also fine tuning MPT while losing the money. Fortunately, the moolah for my fellowship was in another pot. 4. The brainiacs from Merrill who advised Orange County about how to construct a low risk fixed income portfolio by using duration analysis and stochastic modeling. I understand the county is out of bankruptcy now. 5. The folks who invented portfolio insurance, which worked great on paper but was a flop in 1987, the only time it mattered. BTW, can you name one mainstream financial academic who has done well managing money or advising others how to manage money? The exception to the rule, rule would say there would be at least one. MB