John Hull, Andrew W. Lo and Roger M. Stein were named winners of the $10,000 Harry M. Markowitz Award for their paper, "Funding Long Shots."

The award was announced Tuesday by the Journal of Investment Management and New Frontier Advisors in a joint statement.

The paper explores the increasing difficulty in funding long shots, which the authors call investment-related projects with "low probabilities of success, significant delays before cash flows are realized, large initial investments and large payoffs — relative to up-front payments — in the unlikely event of success," according to the statement.

The S&P 500 also closed at a new high, gaining 0.2% to end at 3,289, while the Nasdaq held steady at 9,258.

The gains came as the US and China signed a deal aimed at easing tensions between the two economic giants.

Shares have enjoyed weeks of steady rises, during which markets seemed impervious to bad news.

The three major US indexes rose about 30% in 2019, recording their best year since 2013 despite average earnings growth estimated at a far more modest 1%.

Most analysts are predicting further gains in 2020.

When someone says that another person is intelligent, you pretty much assume that this is a praising of how smart or bright the other person might be.

In contrast, if someone is labeled as being stupid, there is a reflexive notion that the person is essentially unintelligent. Generally, the common definition of being stupid is that stupidity consists of a lack of intelligence.

This brings up a curious aspect.

Suppose we somehow had a bucket filled with intelligence. We are going to pretend that intelligence is akin to something tangible and that we can essentially pour it into and possibly out of a bucket that we happen to have handy.

Upon pouring this bucket filled with intelligence onto say the floor, what do you have left?

On August 5, 2016, Cathay Pacific Flight 905 from Hong Kong was heading for an on-time arrival at Manila’s Ninoy Aquino International Airport when something unexpected occurred. The pilots radioed air traffic controllers and said they had lost GPS (Global Positioning System) guidance for the final eight nautical miles to “runway right-24.” Surprised, the controllers told the pilots to land the wide-body Boeing 777-300 using just their own eyes. The crew members pulled it off, but they were anxious the whole way in. Fortunately, skies were mostly clear that day. The incident was not isolated. In July and August of that year, the International Civil Aviation Organization received more than 50 reports of GPS interference at the Manila airport alone.

In this episode of Bold Voices, John Doyle, Global Healthcare Innovation Lead, sat down with Dr. Andrew Lo, Professor at the MIT Sloan School of Management and director of MIT’s Laboratory for Financial Engineering, to discuss innovative solutions that better address affordability and increase patient access to breakthrough medicines.

“In this country, we've used the inflammatory term ‘death panels' to hamper, frankly, the discussion that needs to happen with regard to drug pricing,” says Andrew Lo, a professor of finance at MIT Sloan School of Management.

The markets and investing have been compared to Darwinian selection and evolution by a number of observers (e.g., Jonathan Burton, 2009; Chris Dillow, 2014; Andrew Lo, quoted by Peter Dizikes, 2017; Charles Munger, quoted by Lee Kuan Yew, 2017; Justin Kuepper, 2019). Andrew Lo of MIT's Sloan School of Management has written a thorough and illuminating book on the subject, laying out an argument for a behavioral investment theory that can serve as a better explanation of market behavior than mere random walk theory alone (Andrew Lo, 2017; Adaptive Markets: Financial Evolution at the Speed of Thought; Princeton University Press, Princeton, NJ, 483 p.).

People in the Massachusetts biotechnology sector figured that the record-setting success of 2018 would be hard to match. So far, they're proving right.

After collectively raising $4.8 billion of venture capital last year, an all-time high, Bay State biotechs are on pace to raise less than $3 billion in 2019, according to a report published Tuesday by the Massachusetts Biotechnology Council, a leading industry group.

Elizabeth Steele, MassBio's vice president of programs and global affairs, said the venture climate is merely "coming back to normal" after an "insane" 2018. A total of about $3 billion would be in line with the average from 2015 to 2017.

But Andrew Lo, a biotech investor who directs the MIT Laboratory for Financial Engineering, said he is "a bit more concerned."

Los profesores de negocios y finanzas que preparan a sus estudiantes para futuras carreras en la banca también están viendo la tendencia. Científico de datos es la "función más importante" ahora para los empleadores, asegura Andrew Lo, director del Laboratorio de Ingeniería Financiera de MIT en Cambridge, Massachusetts.

More than 10 years since the global financial market meltdown, regulators and central bankers are confident that a stronger and well capitalized banking system is better able to withstand another major systemic shock. Yet proven measures of systemic risk, and particularly predictive tools that cut through market noise and volatility, remain hard to come by. Bank Holdings and Systemic Risk, a paper published last year on the Federal Reserve Board website, puts forward what its co-authors claim is a unique and effective statistical approach that can monitor for systemic risk in banking. It can also be utilized for tracking change and risk in other complex sectors such as mutual funds, real estate investment trusts (REITs) and broker-dealer holdings.

Listen to Part 1 of our latest sponsored Top Traders Round Table podcast featuring Andrew Lo, the Charles E. and Susan T. Harris Professor at the MIT Sloan School of Management, and Sol Waksman, the President of the Backstop BarclayHedge Division. These guests have years of experience in the world of investing and have watched the finance industry as it has gone through many changes.

Vanguard Group founder Jack Bogle, who died on Jan. 16 at age 89, ushered in an era of low-cost investing for the many. He launched the first index mutual fund for individual investors at the end of 1975 for the purpose of passive investing: Skip the stockpicking, save on fees, and simply ride the ups and downs of the overall market. His fringe idea has become mainstream. Sometime this year, analysts at Morningstar Inc. say, assets in passively managed U.S. equity funds are likely to surpass assets in actively managed ones. By pushing down fees across the industry, Bogle may have saved American investors $1 trillion over his lifetime, calculates Bloomberg Intelligence analyst Eric Balchunas.

On the Thursday, January 24 edition of Bloomberg Baystate Business we spoke with Bloomberg Intelligence gaming and lodging analyst Brian Egger about MGM-Springfield, the latest on the Wynn saga, and sports betting. Rob Almeida of MFS stopped by to talk about the markets. Bloomberg News endowments reporter Michael McDonald joined us to talk about his story on Baupost Group’s Seth Klarman, who sees opportunity in the markets. Boston Business Journal real estate editor Catherine Carlock talked about the commercial real estate market in Boston. Finally, MIT’s Andrew Lo talked about technology, finance and investing. Hosts: Peter Barnes, Janet Wu and Pat Carroll. Producer: Dan Pierce.

The MIT Laboratory for Financial Engineering (LFE) and Informa Pharma Intelligence have launched an initiative to provide timely and accurate estimates of the risks and benefits of clinical trials to the entire life sciences ecosystem.

Project ALPHA (Analytics for Life-sciences Professionals and Healthcare Advocates) aims to help investors, payers, regulators, and biopharmaceutical companies better evaluate the opportunities of biomedical research and development.

Project ALPHA’s first project will be the further development of clinical success rate metrics, based on algorithms developed by MIT researchers and published in Biostatistics in January 2018.

The MIT Laboratory for Financial Engineering (LFE) and Informa Pharma Intelligence announced Project ALPHA (Analytics for Life-sciences Professionals and Healthcare Advocates), an initiative to provide timely and more accurate estimates of the risks and rewards of clinical trials to the entire biopharma ecosystem. The goal of Project ALPHA is to accelerate biomedical innovation by helping investors, regulators, payers, and biopharmaceutical companies better assess the opportunities of biomedical R&D, allowing all stakeholders to manage their investments more efficiently.

"More accurate risk metrics will eventually lead to fewer big failures, faster approval times, cost savings to the entire healthcare system and more investment capital for developing breakthrough therapies," says Andrew W. Lo, Charles E. and Susan T. Harris Professor at the MIT Sloan School of Management and director of the LFE, "all of which means more, and better, therapies to patients sooner."