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To: Guy E. Tidwell who wrote (35742)	4/22/1999 9:16:00 PM
From: Oblomov	Read Replies (1) \| Respond to of 86076

Not that I agree with BGR, but my understanding from reading the MB thread is that BGR did not defend MPT; instead, he pointed out that the origins of MPT are distinct from the origins of the EMH. My own reading of Markowitz and Sharpe has led me to conclude that BGR is correct here. Markowitz approached the problem of finding an optimal portfolio by considering the probability distributions of total return. He and Sharpe wrote of "efficient" portfolios, but they used the term in the statistical sense of "efficient": meaning, having less variance than other estimators. A portfolio of stocks that had the same expected return and less variance of return than another portfolio would be the more efficient portfolio. This has little to do with the hypothesis that market prices are lognormally distributed random variables... which is axiomatic to followers of EMH. To them I say: OK then, forecast it! AA