Against the Gods

Against the Gods - Against the Gods Through all the years...

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Against the Gods Through all the years of stocks, people never thought of defining risk with numbers. It was never about a definition, but about the feeling in your gut when you see that your risk was rising. In the world of Stocks there are two types of people; the ones who stand by risk and the ones who lean on security. The aggressive and the faint-hearted. The young man, who separated these, weak from strong, wrote an article in June 1952, to the Journal of Finance. This man, Harry Markowitz, an unknown 25-year-old graduate student at the University of Chicago, wrote a fourteen-page article titled “Portfolio Selection.” Markowitz was dealing with a subject ‘considered too dicey and speculative for sober academic analysis.’ He was writing for the big boys. Immediately Markowitz decisively pinpoints his objectives, stating that ‘an investor should not select securities based on their individual properties, but based on how they fit into the whole of the portfolio.’ In other words, the risk of a prospective security is irrelevant to the investment decision, it is only the
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This note was uploaded on 01/09/2011 for the course EDS 103 taught by Professor White during the Spring '10 term at E. Kentucky.

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Against the Gods - Against the Gods Through all the years...

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