More people have read Sylvia Porter than Paul Samuelson.
In the professional media and at educational meetings of wealth managers, there are frequent debates about various approaches to investment management. These may range from heated arguments on the pros and cons of utilizing a mathematical optimizer to vituperative panel debates on the value (or lack thereof) of active versus passive managers. Generally, open discussion of these issues is healthy for a profession. Unfortunately, for wealth managers, there is frequently a problem. Perhaps because the profession is new, all too often these debates are joined by participants with no knowledge of the issues. Even worse, the audience frequently does not have the knowledge necessary to separate the wheat of the argument from the chaff of ignorant criticism.
After speaking at a prominent financial planning conference some years ago, Harold was teased (and occasionally cursed) for saying:
[Peter] Bernstein concluded by saying: “Today, the classical capital ideas are suspected of suffering from kurtosis, skewness, and other less-familiar malignancies. They are under attack from non-linear hypotheses, overwhelmed by fears of discontinuities rather than pricing volatility.” I submit to you that if you don’t understand that paragraph in total and if you could not explain to your clients what that means, you should probably not be charging your clients money for managing their assets.1
The intention ...