So I’m sitting here reading peer reviewed papers in a bid to understand Nigam, Srivastava and Banwet’s (2018) review on behavioural finance. This is my second read of their review and like a maze I keep having to download papers they have referenced so I can better understand the points they advance.
It was one such download that brought me to a paper by Robert Merton. Unusual but beautiful was a picture of the man himself of the first page of his journal article on Capital Market Equilibrium with Incomplete Information.
I smiled back at him and said to myself, “finally, there you are”. The first thing that comes to mind when I think of Merton is – great finance thinker. Where would we be without all of his thoughts on capital asset pricing, option pricing, etc.
Every time I teach my students finance theory and caution ⚠ that it does not necessarily hold in real life, I hear a litany of complaints about its irrelevance then. I remind them that theories from thinkers provide a framework for further thought on how things work in real life. I always end by saying that I hope someday I will have thinkers from my class who can challenge current dogmas and bring about change.
I hope I can rise to that challenge myself. I look up to the forerunners. Let me start by finishing that review I was reading.
Robert Merton 😊