Clark Kent was a mild-mannered reporter; Peter Parker, a lonely high school student. They were the perfect disguise for their alternate selves, Superman and Spider-Man, allowing them to evade attention when they weren’t saving the world.

So, who will save the financial services industry from Covid-19? Andrew Lo, the MIT finance professor, suggests another unlikely hero – quants. Their superpower, he argues, is the ability to act as a bridge between the world of science and the world of finance.

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.

Alpha is the long-established measure of investment performance. But Andrew Lo has come up with a new twist on the metric.

He calls it dynamic alpha, and it tells you over what time horizon an individual investor or trading model does best.

Lo, who is an academic and investor, believes quant managers could use the measure to mould strategies to trade at the most effective frequency. Pension funds and insurers could use it to ensure diversification across investment styles.

"MOST people agree that a combination of the slowdown in Chinese economic growth and the impending rate hike in the US are to blame for the recent market sell-off, but neither adequately explains its ferocity..."

"Andrew Lo has spent a lot of time peering into Wall Street’s various black boxes and "modeling the endogenous risk among hedge fund strategies." The finance professor at Massachusetts Institute of Technology’s Sloan School of Management and chairman of AlphaSimplex Group LLC shared his thoughts on Friday about the recent spate of volatility in the stock market and what role strategies such as risk parity, trend-following commodity trading advisers and volatility targeting may have played..."

The European Securities and Markets Authority said in a statement that short sales—negative bets on stocks—would be curtailed in France, Belgium, Italy, and Spain. Andrew Lo says that it is impossible to know whether the panic of 2008 would have been worse without the ban, but general studies of short-selling have found that bans on that activity can lead to more volatility in the market and lower trading volume.

Hedge funds are facing increased obstacles, of which the regulatory requirements are just one. MIT Sloan Professor Andrew Lo says "weighed against the economic value hedge funds arguably create through the more efficient allocation of capital, must also be set the systemic risks which their herdlike and short-termist behaviour create."

An article about how Ray Dalio built his hedge fund, the world's largest. MIT Sloan Professor Andrew Lo discusses the impact of hedge funds on the markets and the economy at large.

In this article, the question posed is "are hedge funds good for you?". MIT Sloan professor, Andrew Lo says: "Hedge funds are the tip of the spear when it comes to new investment opportunities. They are also the canary in the coal mine when things start to break down."

Andrew Lo spoke to financiers in April and explained why everyone, including John Paulson, is having so much trouble making money right now: "Alpha is becoming beta," he says.

...observers disagree. "When the straw that breaks the camel's back lands on the pile, I guess you could argue that none of the other straws were at fault," says Andrew Lo, Director of MIT's Laboratory for Financial Engineering and FSOC proponent, in response to AIMA contentions on hedge funds and the financial...

Highlights a Wall Street Journal report, which discusses the study of hedge fund performance by Andrew Lo that shows that fund returns have been moving more closely together over the past five years.

"It is a technological arms race in financial markets and the regulators are a bit caught unaware of how quickly the technology has evolved," says Andrew Lo, director of the Laboratory for Financial Engineernig at M.I.T. "Sometimes, too much technology without the ability to manage it effectively can yield some unintended consequences. We need to ask the hard questions about how much of this do we really need. It is the Wild, Wild West in trading."...

The U.S. financial system is erratic and voracious, and keeps score in milliseconds. Andrew Lo says "The U.S. equity markets have become the Wild, Wild, West."