Modern Portfolio Theory Assumptions --- The Root Of All Evil
Clearly, the MPT creators were once Mutual Fund investors, looking for something better after years of disappointing investment returns. True, mutual fund managers rarely beat the markets --- but why? And also true, private, individual, portfolio managers rarely fail to beat the market averages over significant time periods.
Volatility is a function of supply and demand for the common stock of a finite number of dirty, evil, greedy, polluting, congress corrupting, job creating, product and service providing, innovation and wealth developing, foundation supporting, gift giving, tax-collecting corporations to finance their growth and development.
There had been disturbing news and reports emanating from the Niger Delta oil basin of Nigeria in recent times. On Monday March 15, 2010, a car bomb explosion was reported around Warri while two state governors and other dignitaries were visiting the area. From the photograph in one of the National Dailies, this was not Xmas firecracker explosion!