How I Came to Terms with Dishonesty in the Industry - Views on News from Equitymaster

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The Equitymaster Research Digest

How I Came to Terms with Dishonesty in the Industry
May 6, 2016

  • The time I detested economics theory
  • The ugly truth about brokerages
  • Equitymaster's tryst with truth

My first brush with economics as a subject was when I was a teenager. To be honest, it didn't fascinate me back then as it does now. I saw a wide disconnect between economic theory and the economic realities I saw around me. The theories seemed to work only in the imaginary world of economists...where humans behaved like identical robots. The key to that imaginary world was a Latin phrase called ceteris Paribas, which means, all other things being equal.

When I was pursuing my MBA, some of my colleagues and professors thought of me as an unyielding critic of classical economics and modern finance theories. One of my better presentations asserted that the capital asset pricing model (CAPM) was an elegant piece of nonsense.

If you are from a non-finance background, and you have no clue what these theories are, don't worry; you haven't missed anything.

However, ignorance of the maladies that plague the investing world today could be detrimental to you and your portfolio...

Yesterday, Tim Price, from our global network of advisors, penned a scathing essay in Vivek Kaul's Diary on the flaws of the efficient market hypothesis (EMH)...

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