- Analogy of life-long learning optimum portfolio based on the Modern Portfolio Theory
Thanks to both of you Jikon and Alvin for providing me some perspectives to argue this on this analogy to the MPT. Jikon posted an argument about being Jack of Trade and how it has turned out to be to his disadvantage and hence recommending me to argue from Malaysian perspective. Alvin noted the missing risk free investment in the analogy and the measure of risk to those skills, of which we have to refer our HR text as well as trend to try quantify these skills market value.
I will explore more on Jikon's case and try to relate to beta and the unsystematic risk. I will also toying around with the idea of weaknesses of the theory and how it affects the analogy in many ways. I have also realize that I have missed out the part on diversification, i.e. that if one did electrical, getting a cisco certified network engineer is a concentrated diversification, and if he goes into entertainment, that'll be a conglomerate one.
There's even some new theories built on Markowitz, e.g. there is this one theory that try to leverage on Digital Signal Processing theory from electrical engineering that try to address the problems of time and noise dimensions that Markowitz seems to have been lacking. This theory is relatively new. It will be interesting to see how the financial community and the IT industry work together to make it work.
My ultimate goal in establishing this analogy is to simplify people's choice in making decision on charting future ambition; the return, risk, etc. I'll probably require reading and understanding in econometrics for this.