Another interesting opinion. Reminds me a bit of the ideas of Sir Karl Popper, and the late Hans Rosling. As humans we are grown up with values and ideas from a certain era. These thoughts create a biased opinion, that vests deep in our mind and behavior. Take for an example people born in the late sixties (as I am) and people born in the mid-eighties. The first group can remember the Cold War and Tshernobyl as events that helped create their image of the world, while the other group thinks 9/11 as the event that made the biggest impression. So back to investing: it's quite reasonable that CAPM still has ardent supporters, although it is a questionable theory....
Thank you for another good article. But we should continue to recognize the differences between "laws" in the physical and social sciences. Social insights will change more frequently and never be as reliable as physical laws because human action varies with individuals, depends on emational reactions to circumstances, and evolves over time. This has been reflected within the Austrian School of Economics for over 150 years and is the reason for not using precise mathematical numbers to define human activities
I very much agree. Which is why I don't like the physics envy in econ and finance. Social sciences don't have a law of gravity as I usually say. There is a qualitative difference between a social science model and a natural science model, which is why I think it is all the worse to insist that outdated models live so long.
Another interesting opinion. Reminds me a bit of the ideas of Sir Karl Popper, and the late Hans Rosling. As humans we are grown up with values and ideas from a certain era. These thoughts create a biased opinion, that vests deep in our mind and behavior. Take for an example people born in the late sixties (as I am) and people born in the mid-eighties. The first group can remember the Cold War and Tshernobyl as events that helped create their image of the world, while the other group thinks 9/11 as the event that made the biggest impression. So back to investing: it's quite reasonable that CAPM still has ardent supporters, although it is a questionable theory....
Great writing, thanks! Reminds me of Popper too, "the growth of knowledge depends entirely upon disagreement"
Thank you for another good article. But we should continue to recognize the differences between "laws" in the physical and social sciences. Social insights will change more frequently and never be as reliable as physical laws because human action varies with individuals, depends on emational reactions to circumstances, and evolves over time. This has been reflected within the Austrian School of Economics for over 150 years and is the reason for not using precise mathematical numbers to define human activities
I very much agree. Which is why I don't like the physics envy in econ and finance. Social sciences don't have a law of gravity as I usually say. There is a qualitative difference between a social science model and a natural science model, which is why I think it is all the worse to insist that outdated models live so long.
Let's share this article with political representatives who don't know when to retire!