After establishing himself at Goldman Sachs, Fischer Black published his second book Exploring General Equalibrium. The book had been a long time coming, with 30 years of hard thought put into the book. The book looked at large and complicated economic problems from Black's brilliant finance point of view. Being Ignorant and close-minded most economists set aside the ideas in the book, holding fast to their narrow ways of thinking.
Black was born in 1938, into a generation that took foolish risk on as second nature. In his younger years Black took dangerous risks that only had life threatening rewards. He took on a lifestyle of sex and drugs. Black's first marriage ended in a bitter divorce, only to move on to watch his second fiancee die a slow death. Black hit rock-bottom, and found comfort in the Capital Asset Pricing Model (CAPM) of all things.
The CAPM gave Black a scientific basis to measure risk and reward. He no longer took risks that didn't potentially have a great reward. He viewed the principles of the CAPM far beyond stocks and markets, it was now a scientific way to make conscious decisions. Black's lifestyle flipped a 180: he substiuted alchohol for water, his drugs were now vegetables and whole foods, he became a safe driver and wore his seat belt, and took all precautions too prevent cancer.
A for Rooster - but I'll knock it down to a C next time due to multiple spelling and capitalization errors.
ReplyDeleteI wouldn't say "ignorant and closed-minded". I've actually read some of Fischer Black's stuff: it's so "out there" that anyone could be forgiven for giving up on it.
I think you mean substituted water for alcohol.