Ses 1: Introduction and Course Overview

MIT 15.401 Finance Theory I, Fall 2008
View the complete course: ocw.mit.edu/15-401F08
Instructor: Andrew Lo
License: Creative Commons BY-NC-SA
More information at ocw.mit.edu/terms
More courses at ocw.mit.edu

[@Skyraps]

Watching 2024, I want to cry as I’m looking down the playlist. How blessed to have this. Thank you.

[@aN0nyMas]

just starting out. how is review of this course? and do you know where finance 2 is?

[@Cheesecake99YearsAgo]

Where is finance 2? Any idea?

[@TheRandomVideoFactory]

2024 viewers where you at? 😅

[@aN0nyMas]

present! did you manage to get through it? any reviews?

[@alfonsoramirezherrera4553]

Ive watched this finance lecture like 3 times, not because i dont undertant it, just because i love the way this man teaches. This might be thes best finance course on entire internet.

[@spockchan2950]

Here ❤

[@damionfeistel6284]

Reporting in! Time to start learning about Finance :)

[@OkSid300]

Here. I hope it will help me to get rich.

[@okaytokay]

I kinda regret not taking any finance courses during my uni but it's a blessing to have these high quality lectures for free.

[@rishi2364]

Absolutely, this is what the internet was supposed to be

[@TheViettan28]

I hope Tiktok does more of these for the kids.

[@WituVerdadero]

​@@rishi2364 FAX

[@user-sk3sl6sb5s]

Shall we study this course together? So we can discuss with each other?

[@muditchaturvedi5276]

@@TheViettan28 Forget TikTok it mainly focuses on short learning styles which isn't durable, YT and Coursera or some university websites does a great job at it !

[@spitimouvids6427]

2008... What a wild time to be teaching this

[@suiwing422]

hahahaha

[@MatyGti12]

2020... What a wild time to be watching this

[@codesniffer588]

@@MatyGti12 True

[@spitimouvids6427]

Matias Bravo you got me there

[@ramlalravindra1289]

@@MatyGti12 your comment is ao underrated

[@semihkumluk]

Watched the whole semester and passed my PhD Proficiency exam. Thank you professor!

[@simonbooher9465]

How is everything 3 years later?

[@clarinetowl7554]

Semih we need an update!

[@turboleggy]

Yes 🎉

[@WituVerdadero]

Fr

[@aN0nyMas]

@@simonbooher9465 bruh just have an interview on the news, so it's going good I suppose.

[@MrSupernova111]

Wow, I'm half way through my junior year and I have NEVER had a professor so passionate, articulate, and outright challenge his students to grade him. I think I will listen to his lectures through the remainder of my time pursuing an undergraduate degree in finance. Outstanding job!

[@thesaltyfrog7683]

MrSupernova111 great professor indeed

[@MrSupernova111]

Yes he is. Recently, I have been listening to lectures from Aswath Damodaran from NYU. The guys is brilliant and uses minimal PP presentations or spreadsheets to get his point across. I highly recommend him as well.

[@vaibhav.mishra_]

@@MrSupernova111 I have just started studying Finance, can you share the link of lecture you mentioned, as well as any other online resources. Thank you very much for help!

[@akshitvashishth5481]

@@vaibhav.mishra_ kzbin.info/door/LvnJL8htRR1T9cbSccaoVw

[@Bishop11111]

How did it all go?

[@Eganaa1]

This Professor is just outstanding, my god. I have never thought that finance lecture could be so passionate. Thank you very much for uploading such a useful video.

[@khuongho4144]

Eganaa1 I know right :)

[@samou3i15]

u encourage me to complete this course ...

[@VicTor-mk2eb]

This is mit professor , Not that agogagogo professor

[@Wayfarer17683]

Agree this guy is amazing

[@9648216]

Absolutely!!!

[@dineshthogulua6112]

I came here to review the course after finishing all 20 lectures. I give 5/5. If you are wondering, let me tell you that it is indeed incredible value for you time if you have no introduction to finance theory. A million thanks to MIT and Professor Lo.

[@foobarmaximus3506]

Cool. Next semester, you can learn to build a toilet so you don't have to shit in your yard! Way to go, bro.

[@DipayanPyne94]

​@@foobarmaximus3506 Really ? REALLY ?? Were you drunk when while writing that s..t ?? 🤦🏽‍♂️

[@aN0nyMas]

thanks bro. I've just started this. by the way would you know where the second series finance 2 is?

[@AhmadAli453]

Its 11th Jan 2024. I am a first year student of PhD Business Adminstration. I missed a lot of things and i believe this course is going to change my understandings about finance compeltely. Thank you Professor for your motivation.

[@user-rj6el4hg3z]

Me too 2 weeks later 😁

[@wentaoqiu4072]

Never have I thought a finance lecture can be this good, the auction demo is truly inspiring.

[@sagarpandurangi4820]

I'm from India and I can't thank MIT & Prof Andrew Lo enough. This is such an amazing course. Thanks MiT OCW and Prof Andrew.

[@playme8150]

ME TOO BROTHER.

[@adwaitjog4571]

@@playme8150 Me to brother

[@sunriseeternity300]

Thank you MIT for blessing us out here around the world. Knowledge is powerful.

[@normanjtongmd]

Professor Lo is fantastic in his ability to present the complex material painlessly! Not only clear in his communication, but also with a sprinkling of humor.

[@HowToArtillery]

a smart person can understand and talk about complex concepts but a brilliant person can dumb them down

[@badlesbian1983]

Its like 2am and here I am ... hooked. I am only 10 mins in and i want to watch his entire 13 week course.

[@Adnan.A.Hassan]

do it

[@111Econ]

Very interesting. I graduated with a technical engineering degree and sometime I wished I just studied accounting or finance. The closer you are to money the more money you’ll make? Other majors such as engineering etc is just a tool/vehicle for the wider business to make money. Now I am contemplating an MBA at tier 1 B-school.

[@StubProductions]

I hope you realize that engineers have founded some of the most successful companies in history. Creativity solves a problem and people with problems will pay handsomely for their problems to be solved. You sound like you chased money and not your passion…

[@johnc2421]

Andrew Lo is such a great teacher! Learning this at my 30s, only wish I had the opportunity to have this kind of lesson in my college years. And finance was never a true interest to me until now.

[@theburden9920]

it is never too late

[@anshika7758]

Below are the timestamps: Ses 1: Introduction and Course Overview Introduction to Finance Theory 00:00 Discovering the Excitement of Finance 02:33 Key Components of the Course 04:39 Six Basic Principles of Finance 06:44 Understanding Finance: Mathematics Plus Money 08:49 James Simons: From Mathematics Professor to Hedge Fund Success 11:25 Warren Buffett: The Simplicity of Wealth 14:30 Successful Business Leaders and Finance 17:39 The Fundamental Challenges of Finance 20:51 Price Discovery Mechanism in Financial Markets 23:33 Live Auction Experiment 26:30 Competitive Bidding 28:47 Value Determination Without Information 30:22 The Challenge of Valuation 32:39 Comprehensive Scope of Finance 35:23 Accounting as the Basis of Financial Analysis 38:07 Framework for Corporate Financial Decisions 41:15 Applying Financial Concepts to Personal Management 44:18 Challenges of Time and Risk in Finance 47:04 Six Fundamental Principles of Finance 50:15 Course Overview and Structure 53:28 Importance of Active Participation in Learning Finance 56:39 Exam Structure and Problem Sets 59:31 The Practical Aspect of Finance 1:02:16 Tips for Maximizing Learning 1:04:52

[@Omikoshi78]

As someone in a professional field for 20years; it’s been a long time since a lecture got me excited. I’m going to compete his online courses.

[@anyu8109]

Starting the course in 2020. this course is amazing! Thanks Prof. Andrew Lo.

[@Cagmito125sportsbikespares]

Lucky. How did you do?

[@Onomandah]

This was a great watch! Such an exciting and fun lecture! Looking forward to finishing the rest of the lectures!

[@charlottefitzgerald8396]

2022 and I'm finding this relevant and captivating! Great lecturer 👍

[@philipkim9779]

Professor Andrew Lo is so passionate and articulate. I really enjoyed watching this lecture. Thank you so much for sharing.

[@mitocw]

Glad you enjoyed it!

[@sasusan1]

What an age we live in! This is simply super. To have access to such valuable instruction and instructors is the height of generosity. I value these MIT courses immensely and would gladly pay for them. Thank you.

[@akshajnandigam7890]

The passion in this lecture is unbelievable i feel like he really has a unique perspective on teaching and cant wait to finish this playlist to fully understand his perspective

[@yawzerdoink-a-sore-as8159]

I have been running away from finance for the sole reason of the phobia of the mathematics. That fear is the biggest hurdle for students to get over. Finance is simple once we lose the phobia of the numbers and math. I embraced finance, via crypto, and I feel like a fish in water. This is where I belong. No fear. I embrace it all. Amazing professor. You guys kick Harvard’s butt 😍

[@yawzerdoink-a-sore-as8159]

Break at 42:00

[@samueldayo9261]

This is where I belong ❤

[@cynthia-jo1zz]

Same same here!!!!

[@md.kamrulhasan4403]

This type of initiative by MIT professor of finance is a great job. Specially Professor Andrew Lo delivers finance theory so smoothly that deserves appreciation. I expect new lectures on portfolio management, stock market and behavioral finance during this corona-virus period. Thank you KZbin.

[@stormyS2011]

This is a wonderful series of lectures! Thank you Andrew Lo and MIT Open Courseware for making this publicly available. It expanded my understanding of finance beyond what I expected before going through these lectures. Andrew Lo has a talent for explaining things multiplied by his deep knowledge and understanding of the topic!

[@haipingwang7075]

Very amazed by the presentation of an introduction, I fell in love with this class already. Thanks for uploading it.

[@sudhirpatil3434]

Just watch sirs body language- so much interested in teaching- he perhaps is 1 of best prof in finance fields today! Hats off-

[@blakshman01]

I dont think that i would ever forget that example of ipod auction and explaining value from that

[@karinaycb4293]

Really love how he is so passionate about finance! Passionate people are always a blast at teaching

[@MrSyCoe]

This guy is an AWESOME professor.

[@avgustinlazo4354]

I appreciate his respect for his students. He is treating them and talking to them like adults.

[@0xcc32sys_err4]

I mean they are adults lol

[@sergiodelavega5412]

They are 22-25 they are adults. Nobody thinks of them as kids

[@sergiodelavega5412]

@@Cagmito125sportsbikespares it's grad school

[@MrKnockout_]

Lol welcome to college. Sounds like you're in 10th grade

[@user-lh1jb2xm3z]

@@sergiodelavega5412 some professors kinda pretend they are respecting but really not.

[@jalapenohiway]

I really love this gentleman's enthusiasm. Great content so far. I'm very excited about this course!

[@yangyu4489]

gentlemans enthusiasm is a phenomenal pairing of words. thats a band name right there

[@ksacredsprings2897]

I'm starting to love finance now because of this Professor. Love it!

[@sudhirpatil3434]

I haven't listened to better information put up in most precise manner than this prof- he is a jem of a person!

[@salaryman540]

Being able to learn such an awesome lecture on finance from nowhere in Japan. What a great age we live in.

[@HowToArtillery]

I call it KZbin University ;)

[@Discovery_and_Change]

What part of Japan?

[@imafidonimonitie845]

How can someone be so clear, simple, and interesting. You sir are a blessing!

[@ronaldmoirangcha638]

Thank you prof.. And MIT for making such valuable learning resource available. From Manipur, India.

[@yimingxu7446]

OMG THIS GUY IS AMAZING!! Finally understand why people would kill to get in a top university

[@CNASIR-tt5oc]

I’m in love 😍 with this teacher and this class. I’m Definitely finishing this course and learning about finance

[@veronaxu]

Honestly I noticed this course 4 years ago but never got the time to watch. Now that I got a Bachelor's degree in finance I'm back here and things make much more sense now.

[@olgapashkova6791]

What an absolutely wonderful set of lectures!

[@arrowb3408]

Prof Lo' s teaching method in business is well prepared in full scope from history to the modern practical financial industry. Plus spice up some little small business game. That's so fascinating to listen his well round teaching.......STF......

[@Needassistance]

This is professor is great. A man who loves the subject he teaches

[@tomchen3356]

Thank you based MIT, I'm a slave programmer in the Valley and these lectures are both eye-opening and immediately applicable to a huge part of my life.

[@yangyu4489]

i was also a slave programmer till i realized i'll never learn the tools to financially liberate myself by googling bugs and writing code.. gotta move into the business/investment quadrant

[@hujake5406]

@@yangyu4489 are you guys rich yet

[@yangyu4489]

​@@hujake5406 ya in 8 months ive become a billionaire

[@hujake5406]

@@yangyu4489 it only took me a day to become millionaire.

[@dragz888]

@@hujake5406 i find both of those hard to believe lol

[@travellerboy6999]

The way he teaches the concepts is really extraordinary...and i found this video of him very .... valuable for me Thankyou professor

[@FrenchMontreville]

This is a beautiful open statement and I'm hooked with just your introduction...

[@shahoriyerhossain5867]

Thank u so much MIT for uploading outstanding lecture.

[@ares2925]

For someone late to learning subjects to help with securing safety for my future. Having this, will REALLY help gain some knowledge and hopefully be able to apply it. Massive respect to the OpenCourseWare team.

[@jeangotier4246]

Beautiful teaching professor. Thanks MIT

[@user-wt2ky2uq4k]

the information provided above by Professor Andrew is priceless! I'm 22 and I have always been wondering what would I like to do in my future, what is the thing that I love. This year I have started to invest in stocks and trading currencies and I fell in love with this discipline. Big thanks from Switzerland.

[@austineojor]

Can we talk on WhatsApp, i am new to investing too And we can look at some stocks together

[@raj8294]

Wish I watched this during undergrad. Brilliant professor

[@IrfanKhan-yg8zu]

really impressed, professor, i am watching after completing my PhD, from the very beginning, and behaving like i am new in finance lol

[@bart9522]

48:54 "interest rates are non-negative" that did not age well

[@lassorb4752]

🙏🏼😂

[@danielarce3256]

Oil😂

[@josecurto6352]

Thanks MIT. Following from Sweden.

[@valoxsen6003]

Wow... fall 2008 I was starting my major in journalism. Now here I am, 16 years later, wanting to make a career change into finance 🥺It's somehow fitting that I found this lecture series that was recorded when I myself was in college!

[@mexicanboss5823]

I have NO idea how I ended up on this video but it had me very entertained. Great teacher!

[@TheChartFather]

Great lecture. I miss being in an environment where those involved are motivated and engaged voluntarily. Hard to find in the real world.

[@user-kq6hu4vj3x]

Yeah man. I thought I'm going crazy, but then I accepted it. Just trying to stay cool ))

[@kodymccollum8235]

To take bathtub analogy one step further - water level is stock price, water flowing in is revenue, but also the drain (water removed from tub) is costs.

[@rajeshkumarsahu3218]

Thank you so much guys for imparting free knowledge .

[@ramonv-h5719]

Wow! I wish I was aware of this MIT course availability before I found this in year 2021. Better late than never.

[@lindamadrid3108]

what a wonderful first video, thank you Mr.Lo

[@sonnymagday9502]

Great video and so much wealth of information! I’m impressed by his presentation 👍👍

[@samueldayo9261]

So lovely, i was so happy watching him teach through the video and full course. A good vibe. I'm here 2023,

[@rosenskietolentino8420]

Being someone that has not experienced college, This kind of teaching really make me wonder the things I missed out on

[@internz4259]

It's never to late

[@rickhammond2473]

You did not miss anything the smarter people become the dumber they become.I have no colledge and making massive coin on Tesla long since 2019 and CRGE in which I got in under a 1.00.The people like Buffet have no common sense.I live in a wealthy are and the people are stupid do not know how to drive the kids are screwed up it is ashame what happen to the society.Uneducated are dumb and the educated are really dumb.

[@mariovilla2294]

Thanks a bunch for sharing! It is much appreciated, even more for international audiences! Looking forward to seeing more videos like this one to come. Regards from Argentina

[@capitolfedgroup8311]

Great information. Very easy to follow. I'm looking forward to learning more.

[@cosmogamer9914]

i've watched about half of these lectures and this professor is incredible, particularly relative to the professors i just had in my recently completed Master of Finance program. i'd have straight A+ if i could have this quality of teaching for my classes

[@skbskb7596]

Excellent teaching, I can not afford MIT tuition (at this age going back to school is also tough), and it's a blessing

[@flaiirenn]

what a blessing that this content is free. i will definitely use this.

[@hassan6692]

your lectures have reached East-Africa(Somalia)...thank you for uploading this fantastic lecture with such an impressive professor

[@randal3122]

ya if i would have has this guy as a professor in any of my classes when i was in college, he probably would have been my favorite teacher

[@BuPiToysReview]

Congratulations nice video, creativity is extremely special

[@tashtant]

How’s the toy review business going my friend. It’s interesting to see old comments from popular channels like yours, I wonder what you used to upload at the time.

[@chasityj.4130]

Wonderful and passionate and skilled professor!

[@hanzlee5173]

best finance course I’ve found on KZbin!

[@JonahEnglerNY]

Great informative lecture on finance. Thanks a bunch for sharing!

[@ashanair440]

Just one word for this lecture: Wow! I'm gonna complete the course..:)

[@ahmadshahkabeeri3893]

Thanks from your course and your good lecture I haven't ever seen such as this gentleman lectures your lectures were and are so good thanks a million that your prepared a free course for the people that they are remote from knowledge to understand about the finance and they work in third world such as me. your are very outstanding lecturer. I wish you the best standard of living your life.

[@rickhammond2473]

The sad part is the smarter the people become the dumber they become I run into them everyday bottom line they are dumb as a box of rocks I take it they read to many books.

[@dany2685]

Hello! The reason I am coming to watch your videos is I want to do some automation solving problems and creating a site that will make the financial more easy to use to the normal humans. I do have a bachelor degree of finance and economic informatics (a combination between computer programming and finance) but it is always good to see different points of view and to have a deep dive in finance.

[@bookgains]

For a curious person, this channel is a gold.

[@FUJISAN2012]

What a nice professor. Makes lectures fun!

[@jamesmatthew1903]

I didn't go to MIT but he's right when he says it will take years to appreciate the knowledge you gain.

[@sitrakaforler8696]

Wow that's a AAA course ! Really engaging. Clear and purposeful !

[@duchuymai4743]

Thank you very much ! MIT

[@dhruvjoshi4524]

Loved how the camera captures the water bottle when the professor says: "Water is valuable" 24:45

[@robertovalle655]

who else is binge watching this in 2020? LOL

[@mikspanks]

I am watching in 2021

[@Linguages2024]

@@mikspanks Me too

[@thisisTrev]

Lol yep

[@anonym4707]

i liked, then i realised its 2021

[@justwatchinvideos305]

Let’s go baby!

[@kevinparsley6806]

james simons was primarily an organizer at renaissance technologies others he hired determined the ways to achieve his goal of being completely systematic with investment, including algorithm development and implementation, data acquisition and processing. It was an integrated and evolving effort.

[@jaigohil4963]

This is awesome and Great value provided!!

[@thatguy8628]

One word to describe it : FABULOUS!

[@HighOnTheSound]

Just starting this course now, 14 years later.

[@zackzhu9865]

A great course! Thanks MIT OpenCourseWare for opening this up for public for free

[@albertninneh3514]

I admired the teaching and I learned a lot.

[@ravindertalwar553]

Feeling excited to explore

[@mincoffee1995]

his accent is so comfortable and easy to understand.

[@yoursfithfully047]

This professor knows what he is doing and i will study from him again when i get into sloan and trust me its sooner than i think

[@14G302]

This is brilliant !

[@diegoandres9065]

August 2023. Learning business english and finance at the same time with MIT, thank you professor for this masterpiece.

[@kauigirl808]

Never got a Masters or took any finance class. I hope this isn't too advanced for me. Thank you for this.

[@quiz36O]

Simply outstanding