Building the Perfect Stock Portfolio

Today’s podcast was recorded previously at Stanford at an event to honor my old boss and close friend Myron Scholes who won the Nobel Prize in Economics.  

Our first speaker will be Andy Lo who is a Finance Professor at MIT, and he will discuss his book In Pursuit of the Perfect Portfolio. Andy interviewed a dozen leaders in academic finance and top practitioners about how to design a portfolio balancing risk and reward by maximizing diversification.

Our second speaker will be Jonathan Levin who is the Dean of Stanford’s Graduate Business School.  Jon will explain how Myron Scholes’ ideas have shaped academic research in finance and how his models have been applied by investment professionals.

Our third speaker is Victor Haghani. Vic and I worked together at Salomon Brothers before he left to be one of the founding partners at Long-Term Capital Management.  Vic will answer the question, how much should you gamble when you have an excellent investment. Vic’s ideas are very important, because most of us focus on what to invest in and spend little time wondering how big to bet? And whether to increase or decrease the wager when uncertainty and volatility increases or decreases over time.

Our fourth speaker is my good friend Bruce Tuckman who teaches at NYU’s Stern Business School and is the former Chief Economist of the CFTC.  Bruce will discuss the benefits that derivatives like interest rate swaps and commodity futures provide hedgers and investors.

Our final speaker today will be Myron Scholes who will discuss the best ways to adjust your portfolio if you are concerned about ESG.  Some market participants who are concerned about carbon emissions are selling shares in their polluters, but Myron thinks that investment managers should first optimize the portfolio and then buy carbon credits to maximize returns while minimizing carbon in the environment.

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