Against The Gods

Title	Against The Gods
# of Words	837
# of Pages (250 words per page double spaced)	3.35

Against the Gods

Against the Gods: Through all the years of stocks, people never thought
of defining risk with numbers. It was never about a definition, but about the
feeling in your gut when you see that your risk was rising. In the world of
Stocks there are two types of people; the ones who stand by risk and the ones
who lean on security.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
* © Copyright DueNow.com Inc. *
[Category]:
Book Reports
[Paper Title]:
Against the Gods
[Text]:
Through all the years of stocks, people never thought of defining risk with
numbers. It was never about a definition, but about the feeling in your gut when
you see that your risk was rising. In the world of Stocks there are two types of
people; the ones who stand by risk and the ones who lean on security. The
aggressive and the faint-hearted. The young man, who separated these, weak from
strong, wrote an article in June 1952, to the Journal of Finance. This man,
Harry Markowitz, an unknown 25-year-old graduate student at the University of
Chicago, wrote a fourteen-page article titled “Portfolio Selection.”
Markowitz was dealing with a subject ‘considered too dicey and speculative for
sober academic analysis.’ He was writing for the big boys.
Immediately Markowitz decisively pinpoints his objectives, stating that ‘an
investor should not select securities based on their individual properties, but
based on how they fit into the whole of the portfolio.’ In other words, the
risk of a prospective security is irrelevant to the investment decision, it is
only the degree to which the addition of this security raises the risk of the
portfolio as a whole that should be considered. This is an important
perspective, since it is quite possible for an extremely unpredictable security
to add very little risk to a portfolio when it is "uncorrelated" with
the securities already in the portfolio. In other words, since the individual
securities do not move together, some of the movement of each is "washed
out" by the movement of the others. These happenings are very unreliable to
predict and nowhere near able to control. Stocks, bonds, saving accounts, and
each investor’s returns depend on this, risk. However they are still able to
manage the risks that they take. The higher the risk should in time produce more
wealth, but only for the patient investors who can stand the heat.
Risk was the notation that Markowitz used to construct portfolios for
investors who “consider expected return a desirable thing and...

This is ONLY a preview of the article. If you would like to view the entire document, you must subscribe to Academic Library. Please register below now!

Subscribe to Academic Library

When you subscribe to the Academic Library, you get 24-hour access to the online database containing full-text articles written by thousands of scholarly students. For only $8.95 per month, you receive unlimited monthly access to view and download all of our 40,000 articles available online. That is less than the price of one textbook!
This price includes:

24-hours-a-day, 7 days a week unlimited access on any computer with Internet access

Complete access to all 40,000 articles, essays, and research papers

Ability to view and download virtually unlimited number of documents

Ability to browse through perfectly arranged catalog of articles

Superior search and relevancy ranking techniques using Google SiteSearch and our local search engine

Instant access to the online database after registration

You can pay by credit card, checking account. You get instant access after registration:

You will be billed $ 8.95 every 30 days (recurring billing) starting on the day you subscribe.
Your credit card will automatically be renewed for your convenience until you cancel.

If you are already registered, please click here to login.


	Home \| Register \| Login \| FAQ \| Forgot Password \| Privacy Policy \| Disclaimer \| Close Account \| Contact Us \| Logout Copyright 1998-2007 Academic Library. Academic Library is designed only to assist students and researchers in the preparation of their own work. Anybody who use our services are responsible not only for writing their own papers, but also for citing Academic Library as a source when doing so. By accessing and using this page you agree to the Disclaimer. If you wish to cancel your subscription to Academic Library, please click here.