Masters in Business

Andrew Lo on an Incomplete Hypothesis

A popular theory about markets isn't wrong, just incomplete.

This week on our Masters in Business radio podcast, we sit down with Andrew Lo, professor at Massachusetts Institute of Technology's Sloan School of Management, where he is director of the Laboratory for Financial Engineering. Lo is the author of numerous books, including the recently published "Adaptive Markets: Financial Evolution at the Speed of Thought."

Among other topics discussed was the efficient-markets hypothesis. Lo said the theory isn't really wrong; it's just incomplete. The information reflected in stock prices, he said, provides only a partial picture of what is driving markets.

You can hear it on Bloomberg Radio, or stream/download the full show (including the podcast extras) at iTunes, SoundCloud and Bloomberg. All of our earlier podcasts can be found on iTunesSoundCloud and Bloomberg.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Barry Ritholtz at britholtz3@bloomberg.net

    To contact the editor responsible for this story:
    James Greiff at jgreiff@bloomberg.net

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