The MIT professor Congress subpoenaed in 2014 for calling the American voter "stupid" also filmed the free 26-hour microeconomics course every Goldman Sachs analyst has to know before their $250,000 signing bonus interview.
Millions have watched. Almost no retail investor has finished it.
His name is Jonathan Gruber. He is the Ford Professor of Economics at MIT and one of the two economists Barack Obama's team called into the White House in early 2009 to model the cost curve of the Affordable Care Act.
The 75-minute clip in this video is one lecture from 14.01 Principles of Microeconomics, filmed at MIT and posted on OpenCourseWare for nothing.
MIT charges $85,000 a year to sit in that classroom. He posted the entire course for free.
Gruber covers the mathematical foundation of every decision under uncertainty in one semester.
Expected utility. The average happiness you should expect from a decision weighted by probability. Every insurance premium on earth is priced from this formula.
Risk aversion. The reason people pay ten dollars for a policy that covers a one-dollar loss with five percent probability. The reason almost every retail trader closes winners early and holds losers long.
Marginal rate of substitution. Every salary negotiation, every product bundle at Amazon, and every menu at a Michelin restaurant is priced on it.
Adverse selection. Why healthy people leave the insurance pool and sick people stay. Gruber used this exact equation to model the individual mandate of Obamacare.
Moral hazard. The reason people drive faster with seatbelts and gamble bigger with a bailout guarantee.
Every quant fund on Wall Street pays entry level analysts $250,000 to know this material.
Every consulting firm pays McKinsey partners $500,000 to teach it to Fortune 500 clients as a workshop.
The one MIT professor who ran the policy modeling for the largest healthcare law in American history gave away the whole framework on YouTube for nothing.
"The most surprising fact about human decision-making is how systematically we violate every model that predicts it."
That is a paraphrase Gruber returns to across the series.
The lectures are free on MIT OpenCourseWare. Gruber's textbook is under sixty dollars.
The math is free. The willingness to sit through 26 hours of microeconomics before signing a mortgage, buying an insurance policy, or opening a brokerage account is a much rarer commodity than the confidence to walk in without it.
In 1986 a guy got kicked out of every casino in Vegas for counting cards. So he flew to Hong Kong with $180,000 and started betting on horses instead. He walked away with almost $900 million.
It's Bill Benter. He figured horse racing was just another counting problem. Same math, more moving parts.
He and a partner showed up with $180k and a computer. Benter spent years teaching that computer to guess one thing, the real chance each horse had to win. If his number was better than the odds the bookies gave, he bet. If not, he skipped it.
That's the whole trick. Expected value.
EV = p · b − (1 − p)
Only bet when your win chance p, at odds b, is worth more than your chance of losing.
This recording was never meant to be some hidden gem. Nobody expected Professor Tsitsiklis to hand the whole foundation away in 45 minutes, but that's exactly what happens on the board. Students in that room pay over $80,000 a year to sit through it. It's free right here. It's free right here.
Every quant, every professional bettor, every hedge fund analyst started with this exact hour. Benter just watched it and actually did the homework.
Almost nobody knows this lecture even exists. Watch it before it gets taken down.
The answer is in this video.