Re: Theory From One of Sklansky\'s Books
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My admonishment to you was that the example you brought up was in error, not because Black Scholes is not wrong, but BECAUSE IT IS NOT A MATH PROBLEM.
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I don't know what "problem" you are referring to as "Black Scholes," but the questions of existence and uniqueness of hedging strategies in particular market models, as well as the determination of hedging strategies and option pricing, are definitely math problems. Mathematical finance is not really an experimental science; it's more of an axiomatic one. Once you lay down the axioms you're willing to accept, everything becomes a math problem. The fact that the EV of the stock does not enter into the price of the option is a mathematical theorem which must be proven.
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