Finance's Wrong Turns
A New Foundation for Financial Markets, Asset Management, and Social Science
Economic and Financial Theory Has Been in Error for More than 60 Years...
There is a foundational crisis in professional asset management. Investors are increasingly adopting minimal cost no-information index and factor fund strategies. This is because little if any evidence exists for superior cost- and risk-adjusted professional asset management performance of over investment-relevant horizons. The text argues that economic and financial theory have been in error for more than sixty years and is the cause of ineffective investment technology. Social science is preference theory not physics. Finance’s Wrong Turns offers a unique philosophical perspective of modern finance and financial markets. Drawing on contemporary sociological principles, and his decades of experience as asset manager and institutional strategist, Michaud invites analysts, advisors, and institutional portfolio managers to consider a new framework for improved asset management.
In his book, Dr. Michaud will:
· Trace the major historical developments of institutional asset management practice and its limitations.
· Narrate professional asset management practice.
· Describe the key contemporary principles of human cognition and rational decision making.
Learn More
Keywords: Professional Asset Management, Modern Finance, Portfolio Optimality, Preference Theory, Investment Technology, Portfolio Simulation, A New Efficient Frontier, Agent Based Models, Investor Group Behavior.
There is a foundational crisis in financial theory and professional investment practice that cannot be ignored any longer. Investment industry professionals must acknowledge there is little, if any, credible evidence that active investment strategies and traditional institutional quantitative technologies are able to provide superior risk-adjusted, cost-adjusted returns over relevant time horizons.
Dr. Richard Michaud