Andrew Lo, a professor at MIT Sloan School of Management and investigator at MIT’s Computer Science and Artificial Intelligence Lab, has been seeking to find out why so many bad decisions were made on Wall Street leading up to the financial crisis. Lo, along with Thomas J. Brennan, a law professor at Northwestern, says the evolution of the human mind may explain a blind faith that housing values will rise and that mortgage securities and stocks would not fall in value as well as the opposite view.
Andrew Lo, the Charles E. and Susan T. Harris Professor of Finance at the MIT Sloan School of Management, who has been on the MIT faculty since 1988, last year accepted a secondary appointment in EECS and became a primary investigator in CSAIL. Recently, Lo has used techniques borrowed from computer science to mine credit-bureau data and data about the transactions conducted by customers of financial institutions to more accurately predict the risk of default or delinquency. Lo is one of the researchers at bigdata@CSAIL, a new initiative led by professor of computer science and engineering Sam Madden.
Professor Andrew Lo and MIT colleagues, Jose-Maria Fernandez and Roger Stein, have proposed the creation of a $30bn “megafund” that would invest in early-stage biomedical research and drug development. Investing in as many as 150 experimental compounds at one time increases the chances that a few of the ventures will succeed, and generate enough profit to make up for those that fail. Prof Lo recently talked to the FT about his idea.
Andrew Lo, professor, hedge fund manager, and director of the financial engineering lab at MIT’s Sloane School of Management discusses how the financial markets can play a key role in solving the greatest global challenges. Including finding a cure for cancer.
MIT finance professor and hedge fund manager Andrew W. Lo has another idea about how to further the cause — by harnessing the power of financial wizardry. Lo wants to create a “megafund” that would raise billions of dollars for early-stage research in cancer drugs.
Economist and finance professor at M.I.T.'s Sloan School of Management, challenges a core idea of financial theory: that markets are "efficient," meaning there's no point in trying to time your moves in and out of stocks, since everything you could know about them is already baked into the price.