Comment Most posters are missing the point - again. (Score 5, Informative) 323
Let me recap Mandelbrot's point here.
In the April 2003 settlement of postbubble fraud charges, the biggest Wall Street firms agreed to cough up $432.5 million to fund "independent" research. Mandelbrot then makes the distinction between two kinds of research. One is the kind of research where analysts study a publicly traded company, and then give recommendations to buy, sell or hold. The other kind is fundamental economic research.
Mandelbrot then suggests that at least five percent of the settlement money be directed toward fundamental research. He does not say that we should look for a way to predict the markets with absolute certainty - that would be impossible, as many here have redundantly pointed out. (He would probably be insulted to know that so many here think that's what he advocated. He's not stupid, you know.)
He's talking about giving a boost to the kind of fundamental economic research that's already taking place. Stuff like risk management, for example. If you read the article, maybe you noticed that in the beginning he clearly gave examples of what's wrong with our present models in risk management.
In the April 2003 settlement of postbubble fraud charges, the biggest Wall Street firms agreed to cough up $432.5 million to fund "independent" research. Mandelbrot then makes the distinction between two kinds of research. One is the kind of research where analysts study a publicly traded company, and then give recommendations to buy, sell or hold. The other kind is fundamental economic research.
Mandelbrot then suggests that at least five percent of the settlement money be directed toward fundamental research. He does not say that we should look for a way to predict the markets with absolute certainty - that would be impossible, as many here have redundantly pointed out. (He would probably be insulted to know that so many here think that's what he advocated. He's not stupid, you know.)
He's talking about giving a boost to the kind of fundamental economic research that's already taking place. Stuff like risk management, for example. If you read the article, maybe you noticed that in the beginning he clearly gave examples of what's wrong with our present models in risk management.
