> I'm not sure which models you are talking about - but models such as Modern Portfolio Theory, or Black Scholes, while inherently flawed have been massively useful in the real world.
Many finance professors strike me as the kind of people who critique the design of a hammer without having ever built anything themselves. Every tool has perks and limitations, and the challenge of using that tool is to figure out what those things are and get them to bend to your favor. BSM is the lingua franca of the options market and can be tweaked in practice to accommodate many limitations (skew, event volatility, etc).
The point is to make money. If the tool helps you do that, then it's a good tool.
Many finance professors strike me as the kind of people who critique the design of a hammer without having ever built anything themselves. Every tool has perks and limitations, and the challenge of using that tool is to figure out what those things are and get them to bend to your favor. BSM is the lingua franca of the options market and can be tweaked in practice to accommodate many limitations (skew, event volatility, etc).
The point is to make money. If the tool helps you do that, then it's a good tool.