The Pillars of Finance: The Misalignment of Finance Theory and Investment Practice - Hardcover

Fraser-Sampson, G.

Hardcover

ISBN 10: 1137264055 ISBN 13: 9781137264053

Publisher: Palgrave Macmillan, 2014

Synopsis

In The Pillars of Finance, author and finance expert Guy Fraser-Sampson challenges the fundamental conventions of modern finance. He asserts that, at its core, finance is not the highly scientific, modern discipline that most would claim, but has in fact stood still for the past 50 years. Central to the book are the main pillars of the financial markets - risk, return, and value - pillars of financial practice that are not properly understood by the industry, as began to become clear in 2007. Instead, the industry is blinded by a quantitative maze, obsessed with mathematical solutions, stochastic models, and normal distributions, which, although they have a place, should not provide the bedrock of the global marketplace. The author also looks at the industry's overreliance on past performance. Historical data is the foundation of financial forecasting and derivatives pricing, and while much can be gleaned from the past, it cannot and should not be seen as a mirror of the future. Finally, the author provides solutions to these issues, which include the need for the industry to undergo a transformation similar to that which occurred in the Modernist movement in other fields.He argues for a return to more qualitative and informed approaches to finance, bringing back intuition, skill, responsibility, and competency. Drawing from many fields of knowledge, including philosophy, psychology, and history, he encourages readers to question everything, rather than tamely accepting conventional wisdom. The Pillars of Finance is a lively and provocative read, challenging some of the core beliefs of modern finance. It will spark fierce debate and prove a popular read for anyone interested in modern finance.

About this title

Review:

'The financial crisis has already caused the tectonic plates of financial and investment theory to shift a little. But Guy Fraser-Sampson is giving them an impressive shove.' - Tim Price, Head of Investment, PFP Group

About the Author:

Guy Fraser-Sampson is a Senior Fellow at Cass Business School in the City of London, UK where he creates and teaches post-graduate investment modules as well as supervising various research projects. He is a longstanding senior-level investment professional, including a period working in the Middle East as Investment Controller with the Abu Dhabi Investment Authority (reputedly the largest investor in the world), and subsequently running for several years the international operations of a leading fund manager. He is the author of several books on finance and economics including Multi Asset Class Investment Strategy and Alternative Assets: Investments for a Post-Crisis World. His best-selling Private Equity as an Asset Class has been translated into various languages and adopted as the standard text on the subject by business schools worldwide. In addition to his teaching, writing, and investment activities he has for some years also conducted consultancy and high level executive training sessions helping investors to set their activities within a strategic framework and to develop the necessary systems and processes to allow this to function properly. He is a frequent commentator on both television and radio and a well-known public speaker. Most recently his book The Mess We're In: Why Politicians Can't Fix Financial Crises has been widely covered in the media, discussed at university and think tank events, and nominated for the Orwell Prize.

About this edition

• Publisher: Palgrave Macmillan
• Publication date: 2014
• ISBN 10: 1137264055
• ISBN 13: 9781137264053
• Binding: Hardcover
• Number of pages: 266