The Big Investment Lie

Zusatztext Edesess speaks as only an insider could. The evidence is that all of the complex! expensive strategies sold by active money managers simply are not worth the cost. This book provides simple! effective guidelines for a successful investment experience for everyone. David Booth! Chairman! Chief Executive Officer! President! and Chief Investment Officer! Dimensional Fund With wit and accuracy! and based on years of personal experience! Edesess provides clear and easy advice that will help you add substantial value to your portfolio. George Case! consultant and analytical software pioneer Informationen zum Autor MICHAEL EDESESS is an accomplished mathematician and economist with experience in the investment, energy, environment, and sustainable development fields. He was a founding partner in 1994 and chief economist of the Lockwood Financial Group until its sale to the Bank of New York in September 2002. Previously an independent consultant to institutional investors, his clients included several of the largest investment banking and consulting firms. His areas of expertise cover the range of applications of mathematics to investments, including performance and risk measurement; Monte Carlo methods for asset-liability, asset allocation, and pension planning models; dynamic hedging using futures and options; effective style mix determination; backtesting; and quadratic portfolio mean-variance optimization. Dr. Edesess has spoken at conferences on investment research and taught courses in international finance, economics, mathematics, statistics, systems analysis, and environmental policy at four universities. He has been published in the Wall Street Journal and the Journal of Portfolio Management and has been interviewed on CNBC. Klappentext In July 1971, Michael Edesess, having received a Ph.D. in mathematics, started his first job, performingtheoretical work on the stock market at a major brokerage firm. Within months he realized something was askew. The academic findings were clear and undeniable, but the firm-and the whole industry-paid no real attention to them.Theories and evidence both showed that professional investors could not beat market averages. A typicalstudy in The Journal of Finance concluded: "The evidence on mutual fund performance discussed above indicates not only that ... mutual funds were on average not able to predict security prices well enough to outperform a buy the-market-and-hold policy, but also that there is very little evidence that any individual fund was able to do significantly better than that which we expected from mere random chance."Professional investors couldn't even predict stock prices better than the nearest taxicab driver. Yet the entirebusiness was based on the falsehood that they could.It was as if theoretical physicists knew the laws of thermodynamics but, nevertheless, the business ofengineers was selling plans for perpetual motion machines.The Big Investment Lie is that an investor will gain by hiring professional advisors and managers to beat themarket. Widespread acceptance of this lie allows an entire industry to prosper lavishly. But an investor will almost surely lose-more than they imagine-by hiring professional help.Over a long career Edesess observed, often aghast, often as a deeply-placed insider, while the pitch for theLie became more elaborate, and outlandish fees for a worthless service actually increased.In The Big Investment Lie, Edesess shows how to break free from this pervasive falsehood. By following hisTen New Commandments for Smart Investing, investors will maximize their long-run wealth and achieve theirbest possible financial future.1 This story goes back a long way, and so do I. In the spring of 1971, I was about to become a newly minted Ph.D. in abstract, or pure, mathematics. I was thinking about what kind of job to get. Almost all the other Ph.D.s in pure ...

Auteur
MICHAEL EDESESS is an accomplished mathematician and economist with experience in the investment, energy, environment, and sustainable development fields. He was a founding partner in 1994 and chief economist of the Lockwood Financial Group until its sale to the Bank of New York in September 2002. Previously an independent consultant to institutional investors, his clients included several of the largest investment banking and consulting firms. His areas of expertise cover the range of applications of mathematics to investments, including performance and risk measurement; Monte Carlo methods for asset-liability, asset allocation, and pension planning models; dynamic hedging using futures and options; effective style mix determination; backtesting; and quadratic portfolio mean-variance optimization. Dr. Edesess has spoken at conferences on investment research and taught courses in international finance, economics, mathematics, statistics, systems analysis, and environmental policy at four universities. He has been published in the Wall Street Journal and the Journal of Portfolio Management and has been interviewed on CNBC.

Texte du rabat

In July 1971, Michael Edesess, having received a Ph.D. in mathematics, started his first job, performingtheoretical work on the stock market at a major brokerage firm. Within months he realized something was askew. The academic findings were clear and undeniable, but the firm-and the whole industry-paid no real attention to them.Theories and evidence both showed that professional investors could not beat market averages. A typicalstudy in The Journal of Finance concluded: "The evidence on mutual fund performance discussed above indicates not only that ... mutual funds were on average not able to predict security prices well enough to outperform a buy the-market-and-hold policy, but also that there is very little evidence that any individual fund was able to do significantly better than that which we expected from mere random chance."Professional investors couldn't even predict stock prices better than the nearest taxicab driver. Yet the entirebusiness was based on the falsehood that they could.It was as if theoretical physicists knew the laws of thermodynamics but, nevertheless, the business ofengineers was selling plans for perpetual motion machines.The Big Investment Lie is that an investor will gain by hiring professional advisors and managers to beat themarket. Widespread acceptance of this lie allows an entire industry to prosper lavishly. But an investor will almost surely lose-more than they imagine-by hiring professional help.Over a long career Edesess observed, often aghast, often as a deeply-placed insider, while the pitch for theLie became more elaborate, and outlandish fees for a worthless service actually increased.In The Big Investment Lie, Edesess shows how to break free from this pervasive falsehood. By following hisTen New Commandments for Smart Investing, investors will maximize their long-run wealth and achieve theirbest possible financial future.

Résumé
No professional investing advice is good advice. This hard-hitting book proves it with indisputable facts drawn from scientific research and the author’s own thirty-five years of experience in the investment industry. Michael Edesess exposes “The Big Investment Lie”: that an investor will gain by hiring professional advisors to beat the market. He proves that no professional investment advisor or manager has ever consistently and predictably beat market averages, not even Warren Buffett. While The Big Investment Lie allows an entire industry to prosper lavishly, investors invariably lose when they hire professional help.

Once you know the truth, you’ll want to adopt Edesess’s Ten New Commandments for Smart Investing, simple rules you can follow to invest, get a profitable return, and avoid squandering any more of your hard-earned dollars on bogus expertise.

Échantillon de lecture
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This story goes back a long way, an…