I was in Geneva at a Risk Conference earlier this week, and one of the talks I heard about behavioral finance posited that the most fundamental quantities in quantitative finance were SDFs, stochastic discount factors, analogous to DNA in molecular biology or atoms in physics.

I once read a remark by Feynman, who said that if all knowledge about physics was about to expire, and you were allowed to transmit only one sentence to the future to help them recreate what we know, then you would tell them “Everything is made of atoms.”

Similarly, I suppose, that if you wanted to set up a one-sentence guidepost to biology for people in the future, you would tell them something about heredity being controlled by genes within cells and genes being made out of DNA with four bases. (I’m getting onto shaky ground here.)

And, if you wanted to do the same for medicine, you’d probably say “Diseases are (mostly) caused by tiny living germs.”

Now for finance: what would you say in once sentence? I have some idea, but I suspect it doesn’t involve stochastic discount factors.