Harry M. Markowitz


Harry M. Markowitz
(1927)


American finance and economics educator, cowinner (with Merton H. Miller and William F. Sharpe) of the 1990 Nobel Prize for Economics for theories on evaluating stock-market risk and reward and on valuing corporate stocks and bonds.
Markowitz studied at the University of Chicago (Bachelor of Philosophy, 1947; M.A., 1950; Ph.D., 1954) and then was on the research staff of Rand Corporation, Santa Monica, Calif. (1952-60, 1961-63), where he met Sharpe. He then held various positions with Consolidated Analysis Centers, Inc., Santa Monica (1963-68), the University of California at Los Angeles (1968-69), Arbitrage Management Company, New York City (1969-72), and IBM's T.J. Watson Research Center, Yorktown Hills, N.Y. (1974-83) before becoming a professor of finance at Baruch College of the City University of New York (from 1982).

The research that earned Markowitz the Nobel Prize involved his "portfolio theory," which sought to prove that a diversified, or "optimal," portfolio--that is, one that mixes assets so as to maximize return and minimize risk--could be practical. His techniques for measuring risk associated with various assets and his techniques for mixing assets became routine investment methods. He also developed a computer language called Simscript, used to write economic-analysis programs.

 


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