MIT Sloan Prof. Andrew Lo, manager of the Natixis ASG Managed Futures Strategy Fund, advocates vigilant oversight of Managed Futures products, to limit the risk of abuse. "The regulations need to be toughened up even more," he said. "There's all sorts of opportunities and potential for abuse if we don't manage this carefully."...
MIT Sloan professor Andrew Lo says that quant managers need to focus on the adaptation to changing environments that characterizes the biological realm, rather than the sort of immutable laws that form the foundation of physics.
In a discussion of the Chartered Financial Analyst (CFA) designation, Andrew Lo's presentation at a London CFA conference is highlighted as an example of how the CFA is adapting to changing conditions.
A workshop sponsored by America's National Science Foundation at which economists explored the potential of "agent-based models" (ABM) is highlighted. Professor Lo presented a model of the American housing market, inspired by ABM approaches, which showed how a fateful conjunction of rising house prices, falling interest rates and easy access to refinancing created an awesome burden of debt.
Andrew Lo likes the diversification that timberland investments bring, saying that the returns correlate less with, say, United States stocks than Western European stocks would. As a result, timberland might help to prop up the value of a portfolio during a bear market.
...Many of us are in deep mourning—for big stock losses going back to 2008. And our sorrow is so similar to what we feel after divorce or death in the family that we're likely working through the five stages of grief, says Andrew W. Lo, a finance professor at MIT who has studied investor behavior.
A central challenge to the efficient markets hypothesis is the existence of stock market anomalies. Andrew Lo says: "If the Efficient Markets Hypothesis in its classical form seems to be violated so often, maybe we economists ought to re-examine our theory instead of arguing that the world is crazy."
There's high-frequency trading, and now there's high-frequency crashing. But identifying the causes of the 6th May 2010 'flash crash' has proved to be a relatively slow process. Bob Giffords goes in search of causes, outcomes, explanations and lessons to be learned. Andrew Lo gives his take on it.