MPT

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anabuhabkuss's picture
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Joined: 2005-05-02

Will anyone please recommend a good text book on Modern Portfolio Theory? I am reading up on asset allocation and would rather know how iit's done mathematically rather than have a program tell me what % should go in a given asset class and what combination of investments would work.
Thanks.

YHWY's picture
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"The World According to DAtoo", available only online.

anabuhabkuss's picture
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hey man, i appreciate and enjoy the humor on this forum as much as the next guy but was hoping for a legit answer without turning this topic into a war zone.

YHWY's picture
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Tough.

pretzelhead's picture
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http://www.amazon.com/s/ref=nb_ss_gw/102-9260901-0591348?ini tialSearch=1&url=search-alias%3Daps&field-keywords=m odern+portfolio+theory&Go.x=8&Go.y=7

troll's picture
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anabuhabkuss wrote:
Will anyone please recommend a good text book on Modern Portfolio Theory? I am reading up on asset allocation and would rather know how iit's done mathematically rather than have a program tell me what % should go in a given asset class and what combination of investments would work.
Thanks.

The best one is called "shut the f**k up, get back on the phone, and make your life count for something."

snaggletooth's picture
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anabuhabkuss wrote:
Will anyone please recommend a good text book on Modern Portfolio Theory? I am reading up on asset allocation and would rather know how iit's done mathematically rather than have a program tell me what % should go in a given asset class and what combination of investments would work.
Thanks.

The only book I've ever seen on MPT (only because I am NEVER looking for a book like this) is my textbook from the The American College for CFP studying.  It put me to sleep and I don't believe in all of it anyways. 

blarmston's picture
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Will anyone please recommend a good text book on Modern Portfolio Theory? I am reading up on asset allocation and would rather know how iit's done mathematically rather than have a program tell me what % should go in a given asset class and what combination of investments would work.
Thanks.
While I woudn't say it as harshly ay Hull, I would agree. At this point in your career, just get meetings and focus on that for right now. Trust your firm's allocation models and platform, and use a senior FA to perhaps customize portfolios.
Priority #1 #2 and #3 is getting bodies in the door... Woprry about learjing the in's and out's of MPT down the road.

AllREIT's picture
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anabuhabkuss wrote:
Will anyone please recommend a good text book on Modern Portfolio Theory? I am reading up on asset allocation and would rather know how iit's done mathematically rather than have a program tell me what % should go in a given asset class and what combination of investments would work.
Thanks.

MPT (per mean-variance optimisation) is flawed owing to its assumptions about asset class independance and normal distribution of returns. 
Any of Fabozzi's books on portfolio management, or an introductory textbook on finance should cover it.

anabuhabkuss's picture
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blarmston wrote:
Priority #1 #2 and #3 is getting bodies in the door... Woprry about learjing the in's and out's of MPT down the road.
Blarm, Bobby I comeplete see eye to eye with you. But that first part of the sentence only goes so far. Once you get them in, how am I differentiating myself by giving a cut and dry presentation and using firm tools that a joe shmoe at schwab or anywhere else can give? marketing gimmicks only get you so far. my numbers and activities are very good, my knowledge needs improvement.
a little reading and studying on the sideline does not change the fact that i go so far as traveling anywhere in my state to bring in business. and besides, i never sit and stare down at my feet while taking a crap
and i;m not mopping around doing nothing. im at the airport, in trnasit, heading home with a $530k account that will put me at $80,000 in my tenth month in production

anabuhabkuss's picture
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bah sorry for the typos.

troll's picture
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anabuhabkuss wrote:blarmston wrote:
Priority #1 #2 and #3 is getting bodies in the door... Woprry about learjing the in's and out's of MPT down the road.
Blarm, Bobby I comeplete see eye to eye with you. But that first part of the sentence only goes so far. Once you get them in, how am I differentiating myself by giving a cut and dry presentation and using firm tools that a joe shmoe at schwab or anywhere else can give? marketing gimmicks only get you so far. my numbers and activities are very good, my knowledge needs improvement.
a little reading and studying on the sideline does not change the fact that i go so far as traveling anywhere in my state to bring in business. and besides, i never sit and stare down at my feet while taking a crap
and i;m not mopping around doing nothing. im at the airport, in trnasit, heading home with a $530k account that will put me at $80,000 in my tenth month in production

Buddy, that's the whole point! If you start talking about MPT, you will be just like everyone else that talks about that sh*t. People can go to the internet to get a f**king pie chart. Go find a combination of UIT's that have kicked ass over the years and pound the table on it. I've used the same VA for 5 years. Boring sh*t, but it works. It has nothing to do with MPT. The trick is to find something that you can fall in love with and don't quit doing it. Find something that is so solid that you truly believe that anyone who turns it down is a complete idiot. THAT will get you rich.

CAPM's picture
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Quote:
Buddy, that's the whole point! If you start talking about MPT, you will be just like everyone else that talks about that sh*t. People can go to the internet to get a f**king pie chart. Go find a combination of UIT's that have kicked ass over the years and pound the table on it. I've used the same VA for 5 years. Boring sh*t, but it works. It has nothing to do with MPT. The trick is to find something that you can fall in love with and don't quit doing it. Find something that is so solid that you truly believe that anyone who turns it down is a complete idiot. THAT will get you rich.
Bobby Hull..............ROTFLMAO..........

Spaceman Spiff's picture
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Joined: 2006-08-08

Bobby - MPT doesn't go against your reasoning to get a UIT portfolio and run with it.  It complements it and allows you to understand why. 
Ana - call your favorite, intelligent wholesaler and have them educate you on the basics of MPT.  If you can grasp standard deviation, beta, sharpe ratio, r-squared, and alpha you have the basics covered.  Lunch and a wholesaler that gets it will really help.    

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