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Episode 059: Dr. William F. Sharpe, host Jon Luskin

Bogleheads On Investing Podcast

CHAPTER

How to Adjust for Deep Risks Discussed by Dr. Bill Bernstein

A 14 month investment return is pretty much random. The data already exists to show that those endowments would have been better off with low cost index funds. Past risk is probably a better predictor of future risk in an efficient market. If you're comparing portfolios and you can borrow and lend at the riskless rate, then the portfolio with the highest shock ratio is golden.

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