Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street
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“It’s said that it is one of the few times in history where somebody founded the field, asked all the right questions, and proved most of them and answered them all at once,” noted Cornell’s Toby Berger.
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Sharpe offered a counterargument. Divide the world into “active” investors and “passive” investors, Sharpe said. A passive investor is defined as anyone sensible enough to realize you can’t beat the market. The passive investor puts all his money into a market portfolio of every stock in existence (roughly, an “index fund”). An active investor is anyone who suffers from the delusion that he can beat the market. The active investor puts his money into anything except a market portfolio. By Sharpe’s terminology, an active investor need not trade “actively.” A retired teacher who has two shares ...more
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