Is Finance Theory Adrift?

In the aftermath of the 2007–09 financial crisis, mainstream finance theory was criticized for having failed to either forecast or help prevent the market crash, which resulted in large losses for investors. Although as of the writing of this book at the end of 2013, markets have recovered beyond precrisis levels, the investors enjoying the recovery are not always the same investors as those who suffered the losses. So, the crash caused permanent impairment of wealth in many cases.