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15-08-2023, 10:42 AM
(This post was last modified: 16-08-2023, 09:54 AM by specuvestor.)
I think the fundamental difference is how we define risk
MPT define risk as volatility that actually has a downside skew. That's why they can conclude that private equities, which selectively mark to market or provide monthly prices, are safer than treasuries in 2022. Buffett himself mentioned quite a bit on this eg why would risk increase when price goes down and decrease when price goes up
Fundamentals define risk as what we know vs what we don't know / cannot control and what can go wrong. Once this basis is established the rest eg which stock, allocation, concentration risk etc will follow
MPT define risk as volatility that actually has a downside skew. That's why they can conclude that private equities, which selectively mark to market or provide monthly prices, are safer than treasuries in 2022. Buffett himself mentioned quite a bit on this eg why would risk increase when price goes down and decrease when price goes up
Fundamentals define risk as what we know vs what we don't know / cannot control and what can go wrong. Once this basis is established the rest eg which stock, allocation, concentration risk etc will follow
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward
Think Asset-Business-Structure (ABS)
Think Asset-Business-Structure (ABS)