I could listen to this guy for hours. Get him on a podcast

I like the way how he thinks when he selects a new stock into a portfolio. "Are you contributing to my return and reducing my overall risks". Andrew is such an effective communicator.

Amazing lessons! Always love to take finance lessons from an economist who is good at math instead of a mathematician who knows economic models.
Greetings from Tsinghua University.

40:34 Mutual funds don't lower volatility, except through diversification
41:01 Mutual funds that try to beat the market, on average, don't beat the market
41:53 On average, you'll do better in a passive index fund (says Vanguard and others)
43:24 Investing in mutual funds will cost you more than investing yourself
43:32 Key points:
*Average return on U.S. stocks from 1926-2004 is 11.2% per year
*Standard deviation per year is 16.4%
54:13 130-30 portfolio: 130% long, 30% short

Nassim Taleb and Prof. Lo are two of the most logical market commentators I  have ever heard. The point Prof. Lo made regarding  physics dynamics vs. finance is everything an investor needs to understand in his decision making process.

At around 50:10 there is a remark that if some weights are negative, then necessarily some weights must be greater than one. This is not true. The only thing we can conclude is that the sum of the positive weights must be greater than one. Of course, the overall conclusion about short sale and leverage is not affected by this minor mistake.

BEST ENGLISH OF THEM ALL

I love this guy!

It seems to me that Finance is not falseable. That profesor aimed to teach about finances in the middle of a financial crises. He doesn't found anything wrong at all.

It's better than Netflix

Aha, at 50:40 is that what we so called Margin Loan today? I think so. Wow this class is so fun that Andrew taught everything to the kids. Somehow someway, margin loan also gain the weight more than one; one the other way also become very negative 1 as well. It is kind a fire in an unexpected weather beyond your knowledge and you would be caught by the fire. I never dare to play it at all even though I know how to play fire. But this is a very risky game....STF.

portfoli theory starts at 46:00

thanks for this free video

GOOD POINTS at the beginning 2:50. I am still rowing the boat in the jet stream. Merrily?  Not really at all. Hahaha

Thanks Prof.
But if these are undergraduate students then these are some brilliant guys.

Just a point on the physics comment at 6:11, I'd like to say that quantum physics which is the reality is exactly like that. i.e. when you measure and "test" things, the thing changes. :) all in all, great informative video

33:00 price/book equity

I really REALLY wonder what Prof Lo thinks about the $GME insanity that's going on right now especially considering a chunk of this video detailed a healthy amount of how that wild ride works.

GET TO THE BETA FORMLA THROUGH THE CORRELATION COEFFICIENT MULTIPLIED BY THE COIENTE BETWEEN THE DIVERSION OF ASSETS AND DIVERSION OF THE MARKET ?
My english is not too good.

trying to predict the market is like trying to predict a position of a particle in quantum physics, where the measure alters the state of the particle so there is no such a thing as a real/exact measure, only statistics and probabilities.