‘Absurd’ Comments About CAPM Masquerading As Research

Last month, a Spanish academic ruffled some feathers with the provocatively titled paper CAPM: an absurd model, which reads a lot more like a diatribe on a pet topic than an academic paper (complete with non-standard typography). University of Navarra professor of finance Pablo Fernandez pointed out that CAPM (capital asset pricing model) is based on a number of assumptions that don’t quite match reality (not exactly breaking new ground), and that investors should instead rely on ‘common sense’ to guide their investment process.

The funny part is that Fernandez decided to share “233 interesting comments and criticism from several professors, finance professionals, and PhD students about the CAPM” in a second paper that reads a lot...