Eye On Freedom – Keeping a watchful eye on the preservation of our liberty at home and freedom around the world

The casino and sports-bookie comparisons fall apart here because they fail to encompass the idea of portfolio building in a world in which all economic and asset price behavior is interconnected. A single horse race is a pure speculative gamble because it is an independent event that has no correlation to any other bet. But if the performance of different horses had statistically significant correlations to economic factors as various as crop production and manufacturing growth, mortgage rates and technology stocks — as the Goldman securities in question most certainly did — then a wager on them would not be a speculative bet but rather an informed investment engineered to hedge risk and optimize an investment portfolio.

Read more….

No related posts.