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
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Intelligent Investor: [ Ссылка ]
Warren Buffett: 43 Lessons for Business & Life: [ Ссылка ]
The Essays of Warren Buffett: Lessons for Corporate America: [ Ссылка ]
The Snowball: Warren Buffett and the Business of Life: [ Ссылка ]
The Warren Buffett Way: [ Ссылка ]
Buffett: The Making of an American Capitalist: [ Ссылка ]
Security Analysis: 6th Edition, Foreword by Warren Buffett: [ Ссылка ]
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Warren Buffett on Black Scholes (DANGER!!) (2003)
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