Dr. Alan O'Sullivan

Just in terms of the theme of this podcast, Sebastian, is the most important thing.

It's supposed to be evergreen in nature.

So my aim really is that a graduate, a young professional looks at this maybe in four or five years and says, yeah, I could take something from this.

This is really valuable.

So I know that's a high bar for finance now.

because everything is so dynamic.

But if you were to say your most important thing from a portfolio construction perspective, what would you lean towards?

Listening to you there, I was thinking about my own kind of journey from, you know, the mean variance, which is looking at the first two moments of distribution, the mean and the variance.

And your book is covered in, you know, references to skewness, kurtosis, the third and fourth moments of the distribution.

For people who are lost and don't know what I'm speaking about, we'll have some more information on this in the notes.

But you also reference views a lot.

This is the alpha perhaps where, you know, if we just want the market, we can buy the index.

But perhaps what is alpha?

It's either stock selection, superior stock selection or market timing.

We know market timing doesn't really work.

So maybe it's in the asset selection then.

in relation to asset allocation, where you're starting with your, you're using some mean variance, but then you're imposing your views.

And that's back to our, what we started talking about to start.

The views are conditions on what's happening today.

So it sounds to me that you have a Bayesian view of asset allocation.