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The March of Progress—The Emergence of MPT
One thing badly needed by investors—and a quality they rarely seem to have—is a sense of financial history.
—Benjamin Graham, The Intelligent Investor, xxvi
The story of how MPT emerged in the postwar period has been told and told well. But the context that explains its adoption and entrenchment has not, and that is the purpose of this chapter. The first part has already been identified: MPT emerged from the analytical near vacuum that characterized the prewar period, especially the decades prior to the Crash of 1929 and the Great Depression. After this “ruleless” period, a basic system of guidelines ...
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