Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 09-12-2006, 02:43 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 5,659

Pretty nice summary of MPT and financial economics that Markowitz slapped together over 50 years ago. It works!

The world wasn't quite ready for Markowitz, though. Fame and fortune were a long time coming. First, financial economics had barely established itself as an independent study. Moreover, it took a lot of computer power to run a complete optimization model--a lot more than was available at the time he first presented his ideas. William Sharpe, a student of Markowitz's and the namesake of the Sharpe ratio, simplified the math considerably some years later. But optimization still wasn't anything that could be done on the back of an envelope.

Not until the crash of 1987 did risk get Wall Street's full attention. By then, computing power had caught up to Markowitz's genius, and MPT became a widely accepted and widely used technique. In 1990, 38 years after Markowitz' dissertation was published, the father of modern portfolio theory shared the Nobel Prize for Economics.
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Newbie question about MPT (Modern Portfolio Theory) Van FIRE and Money 6 05-10-2006 06:09 PM


All times are GMT -6. The time now is 12:42 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.