Harry Markowitz Bio, Age, Education, Wife, Married, Books,Net Worth, Twitter

Harry Markowitz is an American economist who won the Nobel Prize in Economic Sciences for his contribution to the field of financial economics. He shared the prize money with two other American economists, Merton H. Miller and William F. Sharpe. Markowitz had already developed a portfolio theory in the early 1950s on the ways in

Harry Markowitz Biography

Harry Markowitz is an American economist who won the Nobel Prize in Economic Sciences for his contribution to the field of financial economics. He shared the prize money with two other American economists, Merton H. Miller and William F. Sharpe. Markowitz had already developed a portfolio theory in the early 1950s on the ways in which returns on investments could be optimized.

Markowitz was born in Chicago, Illinois, the USA  to Morris Markowitz and Mildred Markowitz. They owned a small grocery store in Chicago. He was the only child of his parents. He joined the ‘University of Chicago’ and earned his B.Phil degree from there in 1947. During this period he became interested in the uncertainties that were attached to investments in the share market.

He continued with his studies at the university and specialized in economics. He was greatly influenced by famous economists such as Jacob Marschak, Leonard Savage and others. He earned his M.A. degree from the university in 1950. He received an invitation to join the ‘Cowles Commission for Research in Economics’ located in Chicago while he was still a student. For his Ph.D. thesis, he chose the stock market and tried to apply mathematical formulations to analyze the variance of shares in the market. He found that the understanding of stock markets at that time lacked the knowledge of how risks could create an impact on share prices. His theory on the allocation of portfolios led to the paper titled ‘Journal of Finance’ that was published in 1952. He received his Ph.D. from the ‘University of Chicago’ in 1955.

Markowitz joined the RAND Corporation in 1952 and started working with George Dantzig on the development of a ‘critical line algorithm’ that would help in the optimization of the mean-variance in the portfolios. This came to be known as the ‘Markowitz frontier’. He developed an algorithm for identifying the portfolios that would have shares with the greatest amount of optimization.

He spent a year from 1955 to 1956 at the ‘Cowles Foundation’, Yale University. During this time he worked on his algorithm which was published in 1956 and on his book on the allocation of a portfolio that came out in 1959. He returned to the RAND Corporation in 1960 and helped develop a programming language called ‘SIMSCRIPT’ which was the first ‘simulation programming language’ of its kind. He founded the ‘California Analysis Center’ on July 17, 1962, with the help of Herb Karr which later became the ‘CACI International’. He joined the ‘Arbitrage Management Company’ in 1968 and created a hedge fund with the help of Robert Merton and Paul Samuelson which is supposed to be the first-ever attempt to conduct arbitrage trading with the help of computers. He became the CEO of this company in 1970. He left the company in 1971 after it was bought by Stuart & Co. He joined the ‘Rady School of Management’ of the University of California, San Diego as a professor of finance. He has also served on the advisory board of ‘BPV Capital Management Company’ which was another firm dealing in hedge funds. He has worked with the ‘Investment Committee of LWI Financial Inc’ at San Jose, with the advisory board of ‘Research Affiliates’ in Newport Beach, ‘Index Fund Advisors’ and ‘The Investment Committee of 1st Global’ in Dallas. Markowitz co-founded ‘Guide Choice’ which provided advice on investments and accounts. He designed the investment solution provided by this firm and is the head of the ‘Guided Choice Investment Committee’. From 1982 onwards he taught at the ‘Baruch College’ under the ‘City University of New York’ as a professor of economics. In 2002 he was elected a fellow of the ‘Institute for Operations Research and Management Studies’.His latest activity involves giving assistance to retirees on wealth distribution with the help of ‘Guided Spending’.

Harry Markowitz Age | How Old Is Harry Markowitz?

Harry was born on August 24, 1927, He is currently 91 years old a sof 2018. His birth sign is Virgo.

Harry Markovitz Height | How Tall Is Harry Markowitz?

Harry stands at a height of 6 feet and 6 inches.

Harry Markowitz Wife | Harry Markowitz Married?

Markowitz is married to Barbara and they live in Chicago, Illinois, as a retired professor of economics.

Harry Markowitz Net Worth | How Much Is Harry Markowitz Worth?

He has an estimated net worth of 700 million dollars as of 2019. His estimated net worth includes Stocks, Airplanes and Yachts.

Harry Markowitz Books

  • Risk-Return Analysis, Volume 2: The Theory and Practice of Rational Investing
  • Equity Valuation and Portfolio Management
  • The Theory and Practice of Investment Management Workbook: Step-by-Step Exercises and Tests to Help You, Master, The Theory and Practice of Investment Management
  • Mean-Variance Analysis in Portfolio Choice and Capital Markets
  • Portfolio Selection: Efficient Diversification of Investments

Harry Markowitz Portfolio Selection

Modern portfolio theory (MPT) is a theory on how risk-averse investors can construct portfolios to optimize or maximize expected return based on a given level of market risk, emphasizing that risk is an inherent part of higher reward. According to the theory, it’s possible to construct an “efficient frontier” of optimal portfolios offering the maximum possible expected return for a given level of risk.

This theory was pioneered by Harry Markowitz in his paper “Portfolio Selection,” published in 1952 by the Journal of Finance. He was later awarded a Nobel prize for developing the MPT. Modern portfolio theory argues that an investment’s risk and return characteristics should not be viewed alone, but should be evaluated by how the investment affects the overall portfolio’s risk and return.

MPT shows that an investor can construct a portfolio of multiple assets that will maximize returns for a given level of risk. Likewise, given the desired level of expected return, an investor can construct a portfolio with the lowest possible risk. Based on statistical measures such as variance and correlation, an individual investment’s return is less important than how the investment behaves in the context of the entire portfolio.

MPT makes the assumption that investors are risk-averse, meaning they prefer a less risky portfolio to a riskier one for a given level of return. This implies that an investor will take on more risk only if he or she is expecting more rewards. The portfolio’s risk is a complicated function of the variances of each asset and the correlations of each pair of assets. To calculate the risk of a four-asset portfolio, an investor needs each of the four assets’ variances and six correlation values, since there are six possible two-asset combinations with four assets. Because of the asset correlations, the total portfolio risk, or standard deviation, is lower than what would be calculated by a weighted sum.

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