Summary of Andrew W. Lo & Stephen R. Foerster's In Pursuit of the Perfect Portfolio

By IRB Media

Get the Summary of Andrew W. Lo & Stephen R. Foerster's In Pursuit of the Perfect Portfolio in 20 minutes. Please note: This is a summary & not the original book. Original book introduction: 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.

• Language: English
• Publisher: IRB Media
• Release date: Dec 3, 2021
• ISBN: 9781669340775

IRB Media

With IRB books, you can get the key takeaways and analysis of a book in 15 minutes. We read every chapter, identify the key takeaways and analyze them for your convenience.

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Insights on A. W. Lo and S. R. Foerster's In Pursuit of the Perfect Portfolio

Contents

Insights from Chapter 1

Insights from Chapter 2

Insights from Chapter 3

Insights from Chapter 4

Insights from Chapter 5

Insights from Chapter 6

Insights from Chapter 7

Insights from Chapter 8

Insights from Chapter 9

Insights from Chapter 10

Insights from Chapter 11

Insights from Chapter 12

Insights from Chapter 1

#1

The act of investing can be traced back to the Middle Ages, when grain was stored and traded for a future purpose. This was done by the Pre-Pottery Neolithic settlers of what is now Turkey.

#2

The earliest known financial instruments, such as futures and derivatives, date back to around 1900 BCE in Mesopotamia.

#3

Even in ancient times, bad investments could ruin your reputation, which could be difficult to repair.

#4

The lifeblood of any financial system is money. Money acts as a medium of exchange, allowing for a more efficient system than a system based on barter. It is also a store of value that can be saved and used later on.

#5

In China, during the Tang dynasty, banknotes were introduced and became popular. These banknotes were guaranteed by the government and had a value equal to 1,000 cash equivalents.

#6

The first government bonds were issued by the Dutch city of Amsterdam in 1517, and the first national government bond was issued by the Bank of England in 1694.

#7

The world's oldest shareholding company, the Société des Moulins de Bazacle, was established in 1369. The first modern joint-stock companies were the British East India Company and the Dutch Vereenigte Ost-Indische Compagnie.

#8

A bubble is a rapid increase in the price of a specific asset not explained by economic or fundamental factors.

#9

John Law was a Scottish financier who founded the first bank authorized to create fiat money, or paper money, in France. His system involved converting government debt into government equity.

#10

The South Sea Company was a British company that was founded in 1711 to trade with South America. It experienced a stock bubble in 1720, similar to the one that occurred in France with the Mississippi Company.

#11

The first mutual fund, Eendragt Maakt Magt, was created in 1774 by an Amsterdam broker named Abraham van Ketwich. It invested in foreign government bonds, bank bonds, and loans to plantations in the West Indies.

#12

In the 1800s, the Dutch invented the first mutual funds, which allowed investors to buy a stake in a fund that invested in a variety of securities. These mutual funds spread to London and America in the 1800s.

#13

The science of investing is a modern invention that was created in the 1930s. Keynes, an