> Andrew Lo, an MIT economist, said that while physics has three laws that explain 99% of the phenomena, finance has 99 laws that explain only 3%. Not only do we not fully understand how the economy works but also there is an endless debate on how it should function. Everyone has values and an ideology even if they don’t tell you.
Except we do understand how the economy functions. Maybe not well enough to predict everything with 99% certainty, but as well as we can understand any complex phenomenon. He's right however that everyone has a different opinion and their ideology leaks into their economic analysis.
Also, this article is more about finance than economics. Want to understand economics? Learn about supply/demand and game theory. Want to learn about macroeconomics? Study models like the IS/LM model.
Want to attempt to make money with some sort of investment? This article is an OK intro. But always keep in mind that lots of very smart people with very specific schooling and tons of experience are trying to do the same thing, and they'll always beat you to the punch, because you studied CS and they studied finance.
Except we do understand how the economy functions. Maybe not well enough to predict everything with 99% certainty, but as well as we can understand any complex phenomenon. He's right however that everyone has a different opinion and their ideology leaks into their economic analysis.
Also, this article is more about finance than economics. Want to understand economics? Learn about supply/demand and game theory. Want to learn about macroeconomics? Study models like the IS/LM model.
Want to attempt to make money with some sort of investment? This article is an OK intro. But always keep in mind that lots of very smart people with very specific schooling and tons of experience are trying to do the same thing, and they'll always beat you to the punch, because you studied CS and they studied finance.