Warren Buffett on Black Scholes (DANGER!!) (2003)
Black Scholes is the famous equation to determine option pricing. However, Buffett believes it has done more damage than has made money for investors due to the underlying inputs for the formula. The Black–Scholes or Black–Scholes–Merton model is a mathematical model for the dynamics of a financial market containing derivative investment instruments. From the partial differential equation in the model, known as the Black–Scholes equation, one can deduce the Black–Scholes formula, which gives a theoretical estimate of the price of European-style options and shows that the option has a unique price given the risk of the security and its expected return (instead replacing the security's expected return with the risk-neutral rate). The formula led to a boom in options trading and provided mathematical legitimacy to the activities of the Chicago Board Options Exchange and other options markets around the world. It is widely used, although often with some adjustments, by options market participants Buffett Books: Intelligent Investor: https://amzn.to/3cY7rTP Warren Buffett: 43 Lessons for Business & Life: https://amzn.to/3lMvjOf The Essays of Warren Buffett: Lessons for Corporate America: https://amzn.to/3ccnIFy The Snowball: Warren Buffett and the Business of Life: https://amzn.to/3vROoTM The Warren Buffett Way: https://amzn.to/2NITWii Buffett: The Making of an American Capitalist: https://amzn.to/31b3FkM Security Analysis: 6th Edition, Foreword by Warren Buffett: https://amzn.to/3cbcbq7 #WarrenBuffett #BuffettAnswers #Stockinvesting Warren Buffett, Warren Buffett interview, Warren Buffett documentary, Warren Buffett,investment strategy,Warren Buffett advice,Warren Buffett index funds,investing tips,long term investing,Warren Buffett wisdom,Warren Buffett investing,security analysis,stock market wisdom,stock market analysis,how to analyze stocks,Stock investing,Intelligent investor,us news,stock market,world news,charlie munger,berkshire hathaway,business news,finance news,financial stock, warren buffet,yahoo finance, cnbc, CNN, Fox news, dairy queen,bill gates,personal finance,finance stock,investment portfolio,value investing
