In Pursuit of the Perfect Portfolio | feat. Steve Foerster | Top Traders Unplugged #116

If we could gather all of the famous investing pioneers from world history into one room and ask them to build the perfect portfolio, what would it look like? Well Steve Foerster and his co-author (and previous guest on the show) Andrew Lo, set out to do just that, with their new book called 'In Pursuit of the Perfect Portfolio'. I thought I'd invite Steve onto the show to discuss his new book, go through some of the 'golden threads' of investing that he came across, his journey in the world of finance, and of course, get his opinion on how close Trend Following is to 'the Perfect Portfolio'.

#trendfollowing #investing #trading

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Topics discussed in this episode:
- Steve's journey to where he is today and how he ended up co-authoring a book with Professor Andrew Lo
- Some of the concepts from the legendary financial experts Steve spoke to for the book
- How closely linked the academic world of finance is
- About the some of the most important findings from investment research over the years
- About the early 20th-century mathematician, Louis Bachelier
- Harry Markowitz' story
- A summary of what the pioneers of investing would include in their perfect portfolio
- About William Sharpe and his now famous 'Sharpe Ratio'
- How the phrase 'beta' came about
- How computers enabled researchers to access deeper insights into the world of investing
- About the debate between active and passive investing
- Whether volatility should be considered as a measure of risk
- About the progression of volatility data into today's investment models
- About the story of Eugene Farma
- How Steve views the question of 'what is the perfect portfolio?'
- Whether Steve considers Trend Following investing as, essentially, a perfect portfolio

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Check out the show notes for this episode right here!

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Steve is a Professor of Finance at Ivey Business School, where he's taught Financial Management, Investments, and Portfolio Management courses, and earned numerous teaching and research awards.

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