Harry Markowitz

Date of Birth: August 24, 1927

Zodiac Sign: Virgo

Biography

Harry Max Markowitz is an American economist renowned for his pioneering work in Modern Portfolio Theory (MPT). Born on August 24, 1927, in Chicago, Illinois, Markowitz’s contributions have had a profound impact on the field of financial economics. He earned his Bachelor of Philosophy from the University of Chicago in 1947 and later received his Ph.D. from the same institution in 1955. Markowitz’s groundbreaking work on portfolio selection introduced the concept of diversification to manage risk, which fundamentally changed how financial portfolios are constructed and managed. His influential 1952 paper, “Portfolio Selection,” laid the foundation for what is now known as Modern Portfolio Theory, emphasizing the trade-off between risk and return in investment decisions. In 1990, Harry Markowitz was awarded the Nobel Memorial Prize in Economic Sciences, sharing the honor with Merton Miller and William Sharpe for their contributions to financial economics. Throughout his career, Markowitz has held various academic and professional positions, including roles at the RAND Corporation, the University of California, San Diego, and Baruch College, City University of New York.

5 Interesting Facts about Harry Markowitz

1. Harry Markowitz’s 1952 paper “Portfolio Selection” is considered one of the most important financial economics papers of the 20th century.

2. He was awarded the John von Neumann Theory Prize in 1989 for his contributions to operations research and management sciences.

3. Markowitz developed the SIMSCRIPT programming language for the RAND Corporation, which is used for simulating large-scale systems.

4. He has a keen interest in chess and has competed in various chess tournaments over the years.

5. Markowitz’s work on Modern Portfolio Theory laid the groundwork for tools like the Efficient Frontier and Capital Asset Pricing Model (CAPM).

5 Most Interesting Quotes from Harry Markowitz

1. “Diversification is the only free lunch in finance.”

2. “Risk, for Markowitz, is not the likelihood of losing money, but the likelihood of disappointing results.”

3. “The essence of investment management is the management of risks, not the management of returns.”

4. “A good portfolio is more than a long list of good stocks and bonds. It is a balanced whole, providing the investor with protections and opportunities with respect to a wide range of contingencies.”

5. “I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not trying.”