Samuelson’s Frankenstein: Fiduciary Duty and the Misguiding Hand of University Investment Education

Modern economics is really the application of mathematics to economics. The Samuelson of this book's title is the great MIT economist Paul Samuelson, who spoke of 'fiendish Frankenstein monsters' following the Wall Street collapse, expressing horror and shame that in the field of mathematical economics that he had led, scholars had used fancy mathematical investment theories to create and spread the confusion and misunderstanding that had caused the collapse, throwing millions out of jobs or homes and shrinking almost everyone's retirement funds. In the wake of the more recent collapse of the early 21st Century, resentment of the financial industry has reached new heights. Books have poured forth, many from academics attacking Wall Street and condemning financial advisors for misleading the investing public in pursuit of higher fees. In Samuelson's Frankenstein Dick Purcell traces the roots of the tendency to confuse and mislead the investing public and finds the cause of the trouble to be the investment education provided in universities by eminent professors whose own words expose their culpability. Purcell argues that for several decades now, our universities and professors have delivered investment education that has led to the investing public being misled in ways that favour academic interests and the financial industry. This, he asserts, has happened in spite of innovations during the 1950s, which was a time when great strides were made in pursuit of ideas that actually served individual investors' best interests. The author believes that modern portfolio theory, a misapplication of at least one of the innovations of the 1950s, is a substantial reason why yet another more-or-less collapse of the system has occurred. This book calls for a new investment education that revisits the 1950s advances and effectively combines them to offer clear guidance for those seeking the best investments and probabilities for their retirement, their children's

Dick Purcell has a degree from MIT and is a Harvard MBA. He has worked in industry and as a senior economist and was Executive Director of the Ohio Governor’s Business and Employment Council. He has long experience in the field of financial and investment planning and his major contribution to financial education was the development of the acclaimed Financial Picture Balance Sheet. This explains how separate financial statements can be viewed as a whole in order to see what the numbers mean about what a company has done, how it stands and how to use the financial picture to explore what its financial future might be. This was published by Houghton Mifflin, translated into three languages, and is now available as an e-book. Purcell developed and conducted a nationwide series of 100 two-day seminars for the American Institute of Certified Public Accountants, held in 43 states in the USA, to help CPAs and company financial managers use graphics to improve nonfinancial managers’ understanding and use of financial reports, plans, and analyses. He has pioneered the development of software for summarizing hundreds of spread sheet what-ifs on a single graph, revealing relationships and sensitivities between decision-and-prediction factors and goal results. He runs the Financial Picture of a Company website at www.financialpicture.net.