Textbook Theories vs. Reality

Real world experience often brings to light academic fallacies, especially when it comes to the financial markets. Right off the bat, many business students here (Auckland) are taught that inefficiencies do not exist, or impossible to exploit; which completely disengages from reality.

Textbook theories vs. empirical reality

Just because an idea shows up in a textbook does not make it absolute truth. A widely known phenomenon, while Black-Scholes PDE presents an elegant option pricing formula, the “volatility smile” noticeably points out the formula’s inaccuracy and hence unreliability. Some may say “well, it’s all I got, better than nothing right?” No, a wrong solution is often WORSE than nothing.

Remember how the stochastic finance stock pricing model completely ignores credit risk and actual rate of inflation? Models like this have simply no practicality in actual trading.

Textbook contradictions (efficiency vs. inefficiency)

They do not even agree among each other. While some academics keep pushing Efficient Market Hypothesis, top business schools like Wharton use texts specifically on exploiting market inefficiencies like Understanding Arbitrage: An Intuitive Approach to Financial Analysis. What is up with that?!

Searching for truth

Knowledge requires actual experience, not just sometimes subjective ideas off some random textbook. It takes work, like everything else in life.

Business School Grads Have It HARD

So this NY lady who just graduated with $70K in debt, no employment prospect, decides to sue the school. While empathetic, she could have seen this coming what with the vast amount of information available regarding outsourcing and economic conditions.

" Thompson, a graduate of Monroe College, is suing her school for the $70,000 she spent on tuition because she hasn't found solid employment since receiving her bachelor's degree in April, according to a published report. "
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It really begs the question, considering risks off tuition and opportunity cost, do business oriented schools offer any REAL value? Having gained no unique or technical skills, how does any graduate expect to even find adequate employment or freelance work?