Episode description
If we could gather all of the famous investing pioneers from world history into one room and ask them to build the perfect portfolio, what would it look like? Well Steve Foerster and his co-author (and previous guest on the show) Andrew Lo, set out to do just that, with their new book called 'In Pursuit of the Perfect Portfolio'. I thought I'd invite Steve onto the show to discuss his new book, go through some of the 'golden threads' of investing that he came across, his journey in the world of finance, and of course, get his opinion on how close Trend Following is to 'the Perfect Portfolio'.
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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
In This Episode, You’ll Learn:
- Steve's journey to becoming a Professor of Finance and how he ended up co-authoring a book with Professor Andrew Lo
- Some of the concepts from the legendary financial experts they interviewed for the book
- How closely linked the academic world of finance really is
- About some of the most important findings in investment research over the decades
- About the "untold" story of an early 20th-century mathematician, Louis Bachelier
- Harry Markowitz' story
- What Eugene Fama's Perfect Portfolio looks like
- About William Sharpe and his now famous 'Sharpe Ratio'
- How the phrase 'beta' came about
- How computers enabled researchers to access deeper insights into the world of investing
- About the debate between active and passive investing
- Whether volatility should still be considered as a measure of risk
- About the progression of volatility data into today's investment models
- About the story of Eugene Fama
- How Steve views the question of 'what is the perfect portfolio?'
- Whether Steve considers Trend Following investing as, essentially, a perfect portfolio
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