What do you think?
Rate this book
In Pursuit of the Perfect Portfolio: The Stories, Voices, and Key Insights of the Pioneers Who Shaped the Way We Invest
How the greatest thinkers in finance changed the field and how their wisdom can help investors today
Is there an ideal portfolio of investment assets, one that perfectly balances risk and reward? In Pursuit of the Perfect Portfolio examines this question by profiling and interviewing ten of the most prominent figures in the finance world--Jack Bogle, Charley Ellis, Gene Fama, Marty Leibowitz, Harry Markowitz, Bob Merton, Myron Scholes, Bill Sharpe, Bob Shiller, and Jeremy Siegel. We learn about the personal and intellectual journeys of these luminaries--which include six Nobel Laureates and a trailblazer in mutual funds--and their most innovative contributions. In the process, we come to understand how the science of modern investing came to be. Each of these finance greats discusses their idea of a perfect portfolio, offering invaluable insights to today's investors.
Inspiring such monikers as the Bond Guru, Wall Street's Wisest Man, and the Wizard of Wharton, these pioneers of investment management provide candid perspectives, both expected and surprising, on a vast array of investment topics--effective diversification, passive versus active investment, security selection and market timing, foreign versus domestic investments, derivative securities, nontraditional assets, irrational investing, and so much more. While the perfect portfolio is ultimately a moving target based on individual age and stage in life, market conditions, and short- and long-term goals, the fundamental principles for success remain constant.
Aimed at novice and professional investors alike, In Pursuit of the Perfect Portfolio is a compendium of financial wisdom that no market enthusiast will want to be without.
Is there an ideal portfolio of investment assets, one that perfectly balances risk and reward? In Pursuit of the Perfect Portfolio examines this question by profiling and interviewing ten of the most prominent figures in the finance world--Jack Bogle, Charley Ellis, Gene Fama, Marty Leibowitz, Harry Markowitz, Bob Merton, Myron Scholes, Bill Sharpe, Bob Shiller, and Jeremy Siegel. We learn about the personal and intellectual journeys of these luminaries--which include six Nobel Laureates and a trailblazer in mutual funds--and their most innovative contributions. In the process, we come to understand how the science of modern investing came to be. Each of these finance greats discusses their idea of a perfect portfolio, offering invaluable insights to today's investors.
Inspiring such monikers as the Bond Guru, Wall Street's Wisest Man, and the Wizard of Wharton, these pioneers of investment management provide candid perspectives, both expected and surprising, on a vast array of investment topics--effective diversification, passive versus active investment, security selection and market timing, foreign versus domestic investments, derivative securities, nontraditional assets, irrational investing, and so much more. While the perfect portfolio is ultimately a moving target based on individual age and stage in life, market conditions, and short- and long-term goals, the fundamental principles for success remain constant.
Aimed at novice and professional investors alike, In Pursuit of the Perfect Portfolio is a compendium of financial wisdom that no market enthusiast will want to be without.
416 pages, Hardcover
Published August 17, 2021
179 people are currently reading
987 people want to read
About the author
Andrew W. Lo
51 books94 followersAndrew Wen-Chuan Lo is the Charles E. and Susan T. Harris Professor of Finance at the MIT Sloan School of Management. Lo is the author of many academic articles in finance and financial economics
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 29 of 29 reviews
October 3, 2022
In Pursuit of the Perfect Portfolio is multiple things: a history of investment theory; a series of mini-biographies of key figures in that history; and advice on portfolio construction from these same people.
What really stood out about the book was how new this field is. Virtually every tenet of investing was only discovered in the last 75 years (largely made possible by increasing computer calculating power). Also, all the seminal figures seem to have interacted with each other while attending or working at the same institutions.
It would be hard to get a lot out of this book without some understanding of investment theory. A lot of the math, such as the options pricing formula, is very intimidating and likely more than most will want to know, but this book goes as far into the weeds as a reader could want to go.
The title is a bit of a tease. Each figure gives views on the perfect portfolio and they often conflict: stick to stocks and bonds vs add alternatives and commodities; buy and hold vs adjust with the market; passive vs active, etc. it’s hard to even pick a consistent theme, much less arrive at a perfect portfolio unless you decide that one of these experts is the most credible. I’d read this for the history and the theory more than for the investment advice.
What really stood out about the book was how new this field is. Virtually every tenet of investing was only discovered in the last 75 years (largely made possible by increasing computer calculating power). Also, all the seminal figures seem to have interacted with each other while attending or working at the same institutions.
It would be hard to get a lot out of this book without some understanding of investment theory. A lot of the math, such as the options pricing formula, is very intimidating and likely more than most will want to know, but this book goes as far into the weeds as a reader could want to go.
The title is a bit of a tease. Each figure gives views on the perfect portfolio and they often conflict: stick to stocks and bonds vs add alternatives and commodities; buy and hold vs adjust with the market; passive vs active, etc. it’s hard to even pick a consistent theme, much less arrive at a perfect portfolio unless you decide that one of these experts is the most credible. I’d read this for the history and the theory more than for the investment advice.
September 4, 2022
Imperfect Pursuit of Portfolio Perfectors: Mixed Authorial Intent Keep This Valuable Investment Overview From Becoming a Classic
I had different expectations going into this book. At first I thought the book was disorganized and failed its purpose. But reflecting on the book compared to various other investing and personal finance books on my shelf, I think it is unique in its scope and execution. More clarity in editing certainly could have been beneficial, but if one goes in simply wanting to learn about the last 100 years of investment theory and practice, this book can’t be beat by anything else I’ve seen.
So why did I initially have a poor reading experience? I was expecting more interview than profile, more commentary on the current state of investing than historical review of developments in modern portfolio theory and its ilk, more advice than description.
Because each chapter focuses on a specific contributor to investing theory, the history and development of the key concepts over the years is scattered and mostly disconnected. It was hard to reflect on what the actual timeline would have been for those theories that build on one another or respond to one another.
I’m also not sure the editors had the clearest idea of their target audience. They don’t offer much explanation for derivatives, advanced economic theories, and the somewhat complicated formulas that go into modern portfolio theory. But they do take time to explain what short selling is, which is far more basic than any of those other concepts.
Moreover, more time is spent explaining how the contributor developed their core contributions to investment theory, rather than how those ideas might apply to the individual or institutional investors now. For example, in Chapter 8, the authors discuss Martin Leibowitz and his novel approach to assessing the returns on bonds. Instead of taking each bond as a simple investment with a set amount of profit based on the set interest payments, Leibowitz considers the opportunity cost and reinvestment potential of those bonds. So instead of treating the interest payments as a static outcome, he calculates the profit from reinvesting those payments into the same bond or into other instruments; this is the real profit or opportunity cost of the bond. Such reinvestment considerations also apply to stock dividends, compound interest, and opportunity cost, but there is no direct recommendation on how to incorporate Leibowitz’s outlook and considerations into one’s own portfolio.
While I was familiar with about 50% of the content in the book, the information I did not know always had an obvious application to investment theory and was well presented. Here are a few examples:
1. Robert Schiller proposes “trills” as a way of investing directly in a country’s GDP. Since the GDP is 10x larger than the corporate profits, the potential gains are much larger and could provide a closer coupling of incentives with a country’s output. They also could provide robust flexibility over standard fixed rate debt instruments. (Ch. 10, 12:21:00)
2. How much better would investors do compared to buy and hold investment if they could time the top and bottom of a market and reallocate all funds to bonds during a recession and stocks during an expansion? Predicting a shift 3-6 months in advance would improve performance by 5% (Ch. 11, 13:56:30). But investors missed a turning point by just a few months, they would be worse-off than the buy and hold strategy. Because profession economists and investors can take months or years to identify the top or bottom of a market retroactively, we should be very cautious about timing markets.
3. National Income and Product Accounts (NIPA) provides a consistent way of defining earnings over time and so is a more accurate measure of the PE ratio in the aggregate for measures like Schiller’s Cyclically Adjusted PE (CAPE). Using NIPA instead of CAPE provides different results, especially for the last decade when GAAP accounting changed the way that earnings were calculated for CAPE. (Ch. 11, 14:38:30).
So overall, I do think the book could be a good introduction to investment strategies or a good overview of the history of ideas one is already familiar with them. That said, with more polishing and clarity on audience, the book could probably have been a 5-star intro or 5-star deep dive classic.
I had different expectations going into this book. At first I thought the book was disorganized and failed its purpose. But reflecting on the book compared to various other investing and personal finance books on my shelf, I think it is unique in its scope and execution. More clarity in editing certainly could have been beneficial, but if one goes in simply wanting to learn about the last 100 years of investment theory and practice, this book can’t be beat by anything else I’ve seen.
So why did I initially have a poor reading experience? I was expecting more interview than profile, more commentary on the current state of investing than historical review of developments in modern portfolio theory and its ilk, more advice than description.
Because each chapter focuses on a specific contributor to investing theory, the history and development of the key concepts over the years is scattered and mostly disconnected. It was hard to reflect on what the actual timeline would have been for those theories that build on one another or respond to one another.
I’m also not sure the editors had the clearest idea of their target audience. They don’t offer much explanation for derivatives, advanced economic theories, and the somewhat complicated formulas that go into modern portfolio theory. But they do take time to explain what short selling is, which is far more basic than any of those other concepts.
Moreover, more time is spent explaining how the contributor developed their core contributions to investment theory, rather than how those ideas might apply to the individual or institutional investors now. For example, in Chapter 8, the authors discuss Martin Leibowitz and his novel approach to assessing the returns on bonds. Instead of taking each bond as a simple investment with a set amount of profit based on the set interest payments, Leibowitz considers the opportunity cost and reinvestment potential of those bonds. So instead of treating the interest payments as a static outcome, he calculates the profit from reinvesting those payments into the same bond or into other instruments; this is the real profit or opportunity cost of the bond. Such reinvestment considerations also apply to stock dividends, compound interest, and opportunity cost, but there is no direct recommendation on how to incorporate Leibowitz’s outlook and considerations into one’s own portfolio.
While I was familiar with about 50% of the content in the book, the information I did not know always had an obvious application to investment theory and was well presented. Here are a few examples:
1. Robert Schiller proposes “trills” as a way of investing directly in a country’s GDP. Since the GDP is 10x larger than the corporate profits, the potential gains are much larger and could provide a closer coupling of incentives with a country’s output. They also could provide robust flexibility over standard fixed rate debt instruments. (Ch. 10, 12:21:00)
2. How much better would investors do compared to buy and hold investment if they could time the top and bottom of a market and reallocate all funds to bonds during a recession and stocks during an expansion? Predicting a shift 3-6 months in advance would improve performance by 5% (Ch. 11, 13:56:30). But investors missed a turning point by just a few months, they would be worse-off than the buy and hold strategy. Because profession economists and investors can take months or years to identify the top or bottom of a market retroactively, we should be very cautious about timing markets.
3. National Income and Product Accounts (NIPA) provides a consistent way of defining earnings over time and so is a more accurate measure of the PE ratio in the aggregate for measures like Schiller’s Cyclically Adjusted PE (CAPE). Using NIPA instead of CAPE provides different results, especially for the last decade when GAAP accounting changed the way that earnings were calculated for CAPE. (Ch. 11, 14:38:30).
So overall, I do think the book could be a good introduction to investment strategies or a good overview of the history of ideas one is already familiar with them. That said, with more polishing and clarity on audience, the book could probably have been a 5-star intro or 5-star deep dive classic.
September 9, 2024
… “han pasado más de tres siglos desde que el filósofo inglés John Locke acuñó la frase "la búsqueda de la felicidad" y casi dos siglos y medio desde que Thomas Jefferson incorporó esa frase a la Declaración de Independencia de los Estados Unidos. Locke señaló que la búsqueda de la felicidad es la base de la libertad. De manera similar, la búsqueda de la cartera perfecta es la base de la libertad financiera: la libertad de alcanzar sus objetivos financieros y toda la felicidad que pueda traer consigo”.
De esta manera, el libro In Pursuit of the Perfect Portfolio (2021) cierra magistralmente un exhaustivo recorrido por la historia de la ciencia de la inversión, cuyo origen puede rastrearse desde 1950. Si bien el arte de la inversión existe desde el hombre de las cavernas, la disciplina moderna se desarrolló gracias al aporte de académicos pioneros y practitioners, los cuales pusieron a prueba dichos conceptos – con gran éxito – en los mercados financieros.
Cada capítulo profundiza en las ideas y los aportes de cada uno de ellos (Harry Markowitz, William Sharpe, Eugene Fama, John Bogle, Myron Scholes, Robert Merton, Martin Leibowitz, Robert Shiller, Charles Ellis y Jeremy Siegel). Con la voz de sus protagonistas recogidas en entrevistas a profundidad, estos personajes nos describen, con lujo de detalles, sobre cómo abrieron camino al campo emergente de la economía aplicada (finanzas) y – a su vez – cómo crearon un cuerpo base que sirvió para el perfeccionamiento de lo que hoy consideramos conocimiento convencional dentro de la gestión de portafolios de inversión.
En mi experiencia, este libro pertenece al grupo de los que merece la pena subrayar, resaltar y escribir fuera del margen. No decayó mi interés mientras leía cada capítulo, pese a su extensión. Me parece que los autores hicieron un excelente trabajo en balancear varias temáticas que hizo llevadero su lectura. Fue un acierto considerar la biografía de cada uno de los protagonistas y sus opiniones sobre qué constituye un portafolio perfecto (o cómo lo gestionarían en la realidad). No contiene casi ninguna ecuación, gráfico o fórmula. Aun así, la enseñanza principal que extraigo del manuscrito es que constituye, sin ninguna duda, en un insumo clave en la formación de una filosofía de inversión propia.
De esta manera, el libro In Pursuit of the Perfect Portfolio (2021) cierra magistralmente un exhaustivo recorrido por la historia de la ciencia de la inversión, cuyo origen puede rastrearse desde 1950. Si bien el arte de la inversión existe desde el hombre de las cavernas, la disciplina moderna se desarrolló gracias al aporte de académicos pioneros y practitioners, los cuales pusieron a prueba dichos conceptos – con gran éxito – en los mercados financieros.
Cada capítulo profundiza en las ideas y los aportes de cada uno de ellos (Harry Markowitz, William Sharpe, Eugene Fama, John Bogle, Myron Scholes, Robert Merton, Martin Leibowitz, Robert Shiller, Charles Ellis y Jeremy Siegel). Con la voz de sus protagonistas recogidas en entrevistas a profundidad, estos personajes nos describen, con lujo de detalles, sobre cómo abrieron camino al campo emergente de la economía aplicada (finanzas) y – a su vez – cómo crearon un cuerpo base que sirvió para el perfeccionamiento de lo que hoy consideramos conocimiento convencional dentro de la gestión de portafolios de inversión.
En mi experiencia, este libro pertenece al grupo de los que merece la pena subrayar, resaltar y escribir fuera del margen. No decayó mi interés mientras leía cada capítulo, pese a su extensión. Me parece que los autores hicieron un excelente trabajo en balancear varias temáticas que hizo llevadero su lectura. Fue un acierto considerar la biografía de cada uno de los protagonistas y sus opiniones sobre qué constituye un portafolio perfecto (o cómo lo gestionarían en la realidad). No contiene casi ninguna ecuación, gráfico o fórmula. Aun así, la enseñanza principal que extraigo del manuscrito es que constituye, sin ninguna duda, en un insumo clave en la formación de una filosofía de inversión propia.
July 10, 2024
It’s a good introduction to some of the most influential minds within modern portfolio theory. This is not a book for individuals who are new to investing, rather those that have an interest in the academic foundation of modern portfolio theory.
December 20, 2021
Great read-in depth but accessible to the novice investor
March 12, 2022
พยายามแสวงหาวิธีการลงทุนที่ดีที่สุด ที่เหมาะสมกับตัวเองมาตลอดหลายปี ผมเริ่มต้นตั้งแต่อายุ 19 ปีสมัยเรียนปริญญาตรี ศึกษาหาความรู้เองมาตลอดเพราะตอนนั้นยังไม่ได้เรียนวิชา Finance กับ Account
และก็เป็นที่โชคดีอีกเหมือนกันที่ได้อ่านหนังสือดี ๆ ของ Ben Graham, Peter Lynch, P. F. Fisher, หนังสือการวางแผนทางการเงินดี ๆ, และหนังสือของอาจารย์นิเวศน์อีกหลายเล่มมาตั้งแต่เรียน ปี 1 ปี 2
การนำความรู้จากหนังสือของปรมาจารย์ด้านการลงทุนมาปฏิบัติอย่างต่อเนื่องยาวนานตั้งแต่อายุ 19 ปี เก็บหอมรอมริบค่าขนมที่ได้รับ และโชคดีที่มีพ่อแม่ช่วยสนับสนุนบ้าง ได้ทำงานที่ได้รายได้ค่อนข้างดีแต่เนื้องานไม่หนักมาก ก็ช่วยสนับสนุนเงินต้นในการลงทุนให้ได้เติบโตอยู่ตลอด และก็โชคดีอีกที่ผมเป็นคนค่อนข้างขี้ระแวงพอตัว จึงทำให้ทำอะไรไม่เสี่ยง port การลงทุนของผมก็เลยเป็นไปในแบบอนุรักษนิยม พอเวลาผ่านไปถึง 7 ปี และมีวิกฤติที่มีโอกาสซ่อนเร้นอยู่ ก็จึงเป็นเหตุปัจจัยที่ช่วยให้มูลค่าของ portfolio ของผมได้เติบโตขึ้นมาและถึงเป้าหมายคือการมีอิสรภาพทางการเงินได้เร็วกว่าที่ผมเคยคำนวณไว้
หนังสือเล่มนี้ดีมาก และ อ่านสนุกมาก ไอเดียและแนวทางการลงทุนที่คุรุแต่ละท่านให้ไว้ ผมเชื่อว่าสามารถนำไปประยุกต์ใช้ทางการลงทุนส่วนตัวได้จริงเลย เพราะผมนั้นก็เห็นด้วยกับ Harry Markowitz, Eugene Fama, Jack Bogle, Bill Sharpe, Keynes, และ Paul Samuelson
ทั้งนี้นั้น จริง ๆ แล้วก็ขึ้นอยู่กับความรู้และปัญญา (Knowledge and Wisdom) ของแต่ละท่านด้วยว่า แนวทางการลงทุนของท่านนั้น ท่านสมาทานแนวทางแบบไหน แต่สำหรับผม ผมชอบให้ port ของผมมีความหลากหลาย มีการกระจายความเสี่ยงที่พอตัว ผมคิดว่าถ้าผมไม่สามารถเลือก securities ที่ดีเข้ามาไว้ใน port ได้ ผมก็พอใจกับการลงทุนใน passive index fund ไปตลอดชีวิตนะ เพราะกองทุนเหล่านี้ก็ diversified หลักทรัพย์ให้เราได้เยอะอยู่แล้ว แต่ก็ถือว่าผมโชคดีที่ในช่วงที่ผ่านมา ผมเลือกหุ้นได้ถูกตัวอยู่บ้าง (ผมจะไม่บอกว่าตัวเองเก่งกาจในด้านการลงทุน เพราะหลายครั้งผมก็พบว่าตัวเองโชคดีมาก เหมือนมีใครสักคนมากระซิบบอกว่าผมต้องซื้อหุ้นตัวนั้นตัวนี้ และมันจะทำให้ปริมาณเงินในกระเป๋าของผมเพิ่มมากขึ้น)
ผมเชื่อว่าหนังสือเล่มนี้สามารถนำไปใช้อ้างอิงได้ทั้งการทำงานวิชาการและการประยุต์ใช้ในการลงทุนและจัด port ได้ครับ
อ่านหนังสือเล่มนี้จบแล้ว บางทีผมก็รู้สึกอยากเบนเข็มไปเรียนต่อปริญญาเอกด้าน Financial Economics หรือ Monetary Economics อยู่เหมือนกัน เผื่อผมจะได้ทำงานวิชาการอันล้ำค่า คิดทฤษฎีที่จะเปลี่ยนแปลงโลก และเป็นนักเศรษฐศาสตร์การเงินแนวหน้าของโลกได้บ้างครับ 5555
และก็เป็นที่โชคดีอีกเหมือนกันที่ได้อ่านหนังสือดี ๆ ของ Ben Graham, Peter Lynch, P. F. Fisher, หนังสือการวางแผนทางการเงินดี ๆ, และหนังสือของอาจารย์นิเวศน์อีกหลายเล่มมาตั้งแต่เรียน ปี 1 ปี 2
การนำความรู้จากหนังสือของปรมาจารย์ด้านการลงทุนมาปฏิบัติอย่างต่อเนื่องยาวนานตั้งแต่อายุ 19 ปี เก็บหอมรอมริบค่าขนมที่ได้รับ และโชคดีที่มีพ่อแม่ช่วยสนับสนุนบ้าง ได้ทำงานที่ได้รายได้ค่อนข้างดีแต่เนื้องานไม่หนักมาก ก็ช่วยสนับสนุนเงินต้นในการลงทุนให้ได้เติบโตอยู่ตลอด และก็โชคดีอีกที่ผมเป็นคนค่อนข้างขี้ระแวงพอตัว จึงทำให้ทำอะไรไม่เสี่ยง port การลงทุนของผมก็เลยเป็นไปในแบบอนุรักษนิยม พอเวลาผ่านไปถึง 7 ปี และมีวิกฤติที่มีโอกาสซ่อนเร้นอยู่ ก็จึงเป็นเหตุปัจจัยที่ช่วยให้มูลค่าของ portfolio ของผมได้เติบโตขึ้นมาและถึงเป้าหมายคือการมีอิสรภาพทางการเงินได้เร็วกว่าที่ผมเคยคำนวณไว้
หนังสือเล่มนี้ดีมาก และ อ่านสนุกมาก ไอเดียและแนวทางการลงทุนที่คุรุแต่ละท่านให้ไว้ ผมเชื่อว่าสามารถนำไปประยุกต์ใช้ทางการลงทุนส่วนตัวได้จริงเลย เพราะผมนั้นก็เห็นด้วยกับ Harry Markowitz, Eugene Fama, Jack Bogle, Bill Sharpe, Keynes, และ Paul Samuelson
ทั้งนี้นั้น จริง ๆ แล้วก็ขึ้นอยู่กับความรู้และปัญญา (Knowledge and Wisdom) ของแต่ละท่านด้วยว่า แนวทางการลงทุนของท่านนั้น ท่านสมาทานแนวทางแบบไหน แต่สำหรับผม ผมชอบให้ port ของผมมีความหลากหลาย มีการกระจายความเสี่ยงที่พอตัว ผมคิดว่าถ้าผมไม่สามารถเลือก securities ที่ดีเข้ามาไว้ใน port ได้ ผมก็พอใจกับการลงทุนใน passive index fund ไปตลอดชีวิตนะ เพราะกองทุนเหล่านี้ก็ diversified หลักทรัพย์ให้เราได้เยอะอยู่แล้ว แต่ก็ถือว่าผมโชคดีที่ในช่วงที่ผ่านมา ผมเลือกหุ้นได้ถูกตัวอยู่บ้าง (ผมจะไม่บอกว่าตัวเองเก่งกาจในด้านการลงทุน เพราะหลายครั้งผมก็พบว่าตัวเองโชคดีมาก เหมือนมีใครสักคนมากระซิบบอกว่าผมต้องซื้อหุ้นตัวนั้นตัวนี้ และมันจะทำให้ปริมาณเงินในกระเป๋าของผมเพิ่มมากขึ้น)
ผมเชื่อว่าหนังสือเล่มนี้สามารถนำไปใช้อ้างอิงได้ทั้งการทำงานวิชาการและการประยุต์ใช้ในการลงทุนและจัด port ได้ครับ
อ่านหนังสือเล่มนี้จบแล้ว บางทีผมก็รู้สึกอยากเบนเข็มไปเรียนต่อปริญญาเอกด้าน Financial Economics หรือ Monetary Economics อยู่เหมือนกัน เผื่อผมจะได้ทำงานวิชาการอันล้ำค่า คิดทฤษฎีที่จะเปลี่ยนแปลงโลก และเป็นนักเศรษฐศาสตร์การเงินแนวหน้าของโลกได้บ้างครับ 5555
September 26, 2021
I didn't really know what this book was going in, and it ended up not being a book I was particularly interested in reading. This is a history of finance. Each chapter is a mini-biography of somebody who contributed to the field of finance. It doesn't seek to educate too deeply on any given topic, just a brief overview, and is fairly dry. There's plenty here for the person looking for such a book, I think they could have done a much better job naming this book to make it clear what it is. So recommended if you want to understand the history of the development of finance and investing.
January 5, 2026
Learning from successful investors is one way to build your investment philosophy. Looking at empirical evidence and hard scientific research is the other. This is where In Pursuit of the Perfect Portfolio comes in, an outstanding volume by finance professors Stephen Foerster and Andrew Lo. Constructing your portfolio is the most basic question any investor faces. How to make sure, you are adequately diversifying your assets? What should be the positions in your portfolio and what is their purpose? How big should the allocations of those be? In Pursuit of the Perfect Portfolio is an indispensable read if you seek to get to grips with the science of investing. The book traces the evolution of investing from an "art" (driven by gut instinct and anecdotes) to a "science" (driven by data and mathematics). The authors structure the narrative around the most influential figures in modern finance, many of whom are Nobel Laureates. Foerster and Lo review and explain the works of Harry Markowitz, the father of Modern Portfolio Theory and the “free lunch” of diversification. Jack Bogle, the Vanguard founder who revolutionized low-cost indexing. Eugene Fama, the architect of the Efficient Market Hypothesis. And many others such as Robert Shiller and Bill Sharpe.
For those of you already familiar with In Pursuit of the Perfect Portfolio, also give Foerster’s Trailblazers, Heroes & Crooks: Stories to Make You a Smarter Investor a look. In a very entertaining way it teaches crucial lessons that will stick with you.
This review is originally published within the Money Book Cirlcle in my newsletter. Sign up here for regular reviews of the hottest books on money and technology: https://igorpejic.substack.com/
For those of you already familiar with In Pursuit of the Perfect Portfolio, also give Foerster’s Trailblazers, Heroes & Crooks: Stories to Make You a Smarter Investor a look. In a very entertaining way it teaches crucial lessons that will stick with you.
This review is originally published within the Money Book Cirlcle in my newsletter. Sign up here for regular reviews of the hottest books on money and technology: https://igorpejic.substack.com/
November 20, 2022
Em março de 1952, Harry Markowitz, por meio do seu paper Portfolio Selection publicado no Journal of Finance, dava início a uma nova era no mundo das Finanças. Com apenas 11 páginas de texto e 4 de gráficos, Markowitz não apenas trouxe elementos científicos, mas também moldou a forma de se fazer Gestão de Portfólios.
Passados setenta anos, os professores Andrew Lo e Stephen Foerster fazem uma excelente revisão bibliográfica dos principais estudos e nomes importantes da nossa indústria no livro Em Busca do Portfólio Perfeito. Markowitz, William Sharpe, Eugene Fama, John Bogle, Myron Sholes e outros são alguns cujas pesquisas e contribuições são retratadas na obra num tom leve e imenso rigor acadêmico.
O livro é uma experiência maravilhosa para conhecer as histórias por trás dos pesquisadores com trabalhos de destaque em Gestão de Portfólio. Sharpe continuou seus estudos no mestrado porque não conseguiu emprego em vários bancos para os quais aplicou; Bogle fundou a Vanguard após ter sua posição de CEO e presidente no Wellington Fund colocada sob risco; o famoso ensaio sobre opções de Black & Scholes foi algumas vezes rejeitado por mais de uma revista acadêmica - são algumas das inúmeras curiosidades relatadas.
Apesar desta ser uma leitura um pouco mais acadêmica, conhecer os principais pilares sobre Gestão de Portfólio é fundamental quando se trata de Alocação de Recursos. E, como em qualquer área, nada como aprender com as grandes mentes. Recomendo a leitura!
Passados setenta anos, os professores Andrew Lo e Stephen Foerster fazem uma excelente revisão bibliográfica dos principais estudos e nomes importantes da nossa indústria no livro Em Busca do Portfólio Perfeito. Markowitz, William Sharpe, Eugene Fama, John Bogle, Myron Sholes e outros são alguns cujas pesquisas e contribuições são retratadas na obra num tom leve e imenso rigor acadêmico.
O livro é uma experiência maravilhosa para conhecer as histórias por trás dos pesquisadores com trabalhos de destaque em Gestão de Portfólio. Sharpe continuou seus estudos no mestrado porque não conseguiu emprego em vários bancos para os quais aplicou; Bogle fundou a Vanguard após ter sua posição de CEO e presidente no Wellington Fund colocada sob risco; o famoso ensaio sobre opções de Black & Scholes foi algumas vezes rejeitado por mais de uma revista acadêmica - são algumas das inúmeras curiosidades relatadas.
Apesar desta ser uma leitura um pouco mais acadêmica, conhecer os principais pilares sobre Gestão de Portfólio é fundamental quando se trata de Alocação de Recursos. E, como em qualquer área, nada como aprender com as grandes mentes. Recomendo a leitura!
May 29, 2023
I found this book an entertaining and informative read. It is written in an accessible style by two eminently qualified academics. As regards the history of finance laid out in the book, I was struck by how much the availability of computing power limited and shaped the emergence of new thinking. My main takeaway from the book is that it’s best to think about one’s portfolio decisions as a two-tiers challenge. The first-tier decision seems simple enough: to a first approximation, pick a practicable and low-cost version of the market portfolio. The second-tier decision seems to be a bit more complicated as it requires to modify the first-tier portfolio version at the edges given whatever personal goals the investor has. Surprisingly, many of the personalities that have pioneered thinking about portfolio choice are still alive (and kicking). In fact, I enjoyed listening to Barry Ritholtz’s Bloomberg radio podcast interviews with 6 of the 10 personalities discussed in the book. Finally, I think this is the kind of book that will reward re-reading given that it is easy to miss important details and links.
October 30, 2024
This was a enjoyable overview of some of the pioneers of finance -- their lives, contributions, and thoughts on finance and investing. I teach a finance course, so I appreciated the background on how some of the classic formulas and investing ideas came to be and the perspective of the people who developed them.
I found it a little funny that each of them had different views on the best way to invest. I would listen to one section and think, "Interesting, he is all in on US stocks and doesn't see a need to invest in foreign stocks." Then the very next section would say that diversifying into foreign stocks was really important! That happened with a few different philosophies. It goes to show that personal finance is personal, and there are many approaches that can make sense depending on a person's appetite for risk and complexity.
I found it a little funny that each of them had different views on the best way to invest. I would listen to one section and think, "Interesting, he is all in on US stocks and doesn't see a need to invest in foreign stocks." Then the very next section would say that diversifying into foreign stocks was really important! That happened with a few different philosophies. It goes to show that personal finance is personal, and there are many approaches that can make sense depending on a person's appetite for risk and complexity.
January 30, 2022
I like learning about math and stumbled onto William Dunham's book Journey Through Genius. It is my favorite math book ever because, as I realized only recently, my knowledge is at the right level to appreciate the beauty of the theorems proved in the book.
In Pursuit of the Perfect Portfolio is similarly perfect for me. It reviews the history of modern portfolio theory which I consider my calling ever since I first learned it in business school. I even worked in the same firm as one of the pioneers (Martin Leibowitz at Solomon Bros.)
But best of all I have learned so much. I am sure I can improve my portfolio returns while reducing my risk.
In Pursuit of the Perfect Portfolio is similarly perfect for me. It reviews the history of modern portfolio theory which I consider my calling ever since I first learned it in business school. I even worked in the same firm as one of the pioneers (Martin Leibowitz at Solomon Bros.)
But best of all I have learned so much. I am sure I can improve my portfolio returns while reducing my risk.
May 28, 2022
O livro apresenta as teorias por trás da análise de portfólio de forma muito interessante, trazendo os avanços acadêmicos cronologicamente e também mostrando a relação entre eles, como um auxiliou ou influenciou outro, o que não nos é exposto nos cursos de Finanças, onde a ênfase é os produtos desses estudos. Obviamente o livro não chega a uma conclusão absoluta - um portfólio perfeito -, mas traz insights muito pertinentes. Uma leitura construtiva, superou minhas expectativas.
January 5, 2024
Beginning was very slow and this book contains a lot of history about development of the stock market and financial instruments and scientists behind different methodologies behind valuations etc (and many Nobelists). Also their short bios. But there were especially at the end some nice tips and findings to put together or update own strategies. All in all ok, but there are newer and better / more practical books containing same information.
January 27, 2023
This was an excellent survey of the main advances in portfolio theory and quantitative finance over the past 50 years contextualized for how these advances can help the ordinary investor optimize their savings. The prose is lucid and engaging and the quantitative concepts are made easy to understand though, given that I am a finance professional, I may not be the best judge of this.
November 8, 2021
So fun. I love geeking out over these financial minds. Enjoyable to read about how what seem like obvious rules — diversification, for example — came to be. Nothing direct or necessarily new but also gives some things to think about what to invest in now.
January 1, 2022
This is a history book of the people that shape the world of finance. I would have enjoyed it more at the time I was in college and heard about this people during classes.
A must for a finance student or anyone in the field.
A must for a finance student or anyone in the field.
January 14, 2024
Very comprehensive chronicle of nobel winners in finance and economics. A little dry, but really does a great job covering the academic research breakthroughs of finance, investing and portfolio construction.
November 27, 2024
Cok okunmaya degecek bir kitap degil, finans dunyasina katki yapmis unlu isimlerin biraz dogdugu yeri ailesini filan ogreniyorsunuz aralarindaki fark net ortaya konmamis tablolarla verilmemis ve flu alanlar oldugu icin dogrulugu da soru isareti.
November 27, 2021
Reading Andrew Lo, always enlightening.
April 1, 2022
Easy to read perspectives on investment portfolio strategies developed by some of the academic/industry greats.
August 9, 2022
I like the story of the evolution of portfolio and asset management and how each noble laureate contributed in this evolution.
April 12, 2023
Great book. Worth re-reading.
July 19, 2023
I really enjoyed this book. Easily understood strategies and got to know the wizards in Finance at a more personal level as well. However, be advised; this is probably enjoyed mainly by Finance nerds
September 20, 2024
The writer conducted an astonishing research on investment pioneers, giving us a summary of the most important discoveries (theories and models) in the financial industry.
October 23, 2024
Knowing it as the entrance gift from MIT Sloan, pretty much a historical account of modern portfolio theory, open up my door to a systematic finance learner…
October 28, 2024
Interesting book, can be a reference for ur study/research..
it also refer to lot of articles which can be read separately and will add value to ur understanding.
it also refer to lot of articles which can be read separately and will add value to ur understanding.
September 8, 2025
Finished this a while back and just remembered I forgot to review it. I thought it was interesting! Idk. It’s been four years lol.
April 19, 2022
Well detailed importance of finance concepts of diversification how fisher and shape built the option pricing
Value of index funds and its importance
Bogle understand and concept of low cost funds made during vanguard funds
From interest in economics to getting PhD in it this journey of hugely talented people
Value of index funds and its importance
Bogle understand and concept of low cost funds made during vanguard funds
From interest in economics to getting PhD in it this journey of hugely talented people
This entire review has been hidden because of spoilers.
Displaying 1 - 29 of 29 reviews