
Flirting with Models
Markku Kurtti – Diversification is a Negatively Priced Lunch (S7E7)
Apr 22, 2024
Markku Kurrti, a electrical engineer turned finance enthusiast, discusses analytical models on stock underperformance, active manager strategies, and the equity risk premium puzzle. He challenges traditional beliefs on diversification numbers, emphasizing the benefits for long-term success and optimizing returns. Exploring concepts like compound growth, leverage, and Kelly criterion, he provides unique insights into the financial landscape.
57:53
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Quick takeaways
- Maximizing information channel capacity in finance is crucial for optimum growth rates.
- Diversification premium varies for individual stocks from geometric perspective, challenging traditional portfolio diversification beliefs.
Deep dives
Learning about Finance Through Personal Investing Experiences
The guest, Marco Kratty, shares his journey from initially losing money on stocks in 1999 during the tech bubble to developing a passion for investing over the years. His interest in finance grew through reading classic investment literature and eventually pursuing a Master of Science program in finance after being inspired by a podcast discussing the Kelly criterion.
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