If you go back to the late '50s, there really was nothing called "academic finance." Well, there was something being taught in business schools as finance, but it really had no strong research underpinnings.
Copy Quote View & ShareThe problem that people don't understand is that active managers, almost by definition, have to be poorly diversified. Otherwise, they're not really active. They have to make bets. What that means is there's a huge dispersion of outcomes that are totally consistent with just chance. There's no skill involved it. It's just good luck or bad luck.
Copy Quote View & ShareAll the central banks are doing is substituting one form of debt with another form of debt. They're issuing short term debt and using it to buy long term debt. In finance, we tend to think that's a neutral activity, even though those stimulus programs are huge.
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