The Black-Litterman model is analyzed in three steps seeking to investigate, develop and test the B-L model in an applied perspective. The first step mathematically derives the Black-Litterman model from a sampling theory approach generating a new interpretation of the model and an interpretable formula for the parameter weight-on-views.  The second step draws upon behavioural finance and partly explains why managers find B-L portfolios intuitively accurate and also comments on the risk that overconfident managers state too low levels-of-unconfidence. The third step, a case study, concerns the implementation of the B-L model at a bank. It generates insights about the key-features of the model and their interrelations, the importance of understanding the model when using it, alternative use of the model, differences between the model and reality and the influence of social and organisational context on the use of the model. The research implies that it is not the B-L model alone but the combination model-user-situation that may prove rewarding. Overall, the research indicates the great distance between theory and practice and the importance of understanding the B-L model to be able to keep a critical attitude to the model and its output. The research points towards the need for more research concerning the use of the B-L model taking cultural, social and organizational contexts into account. / QC 20101202