Harry Markowitz (28 August 1927 – 22 June 2023)

Ron Bird  |  Australian National University & Portfolio Construction Forum  |  29 June 2023

Until the early 1950s, investing - and, indeed, the whole area of finance - was an art. There was no conceptual basis for the discipline and no way existed for valuing assets/securities. The approach was to favour securities that were expected to deliver higher expected returns, with there being an intuitive understanding that there should be some diversification in a portfolio.

A major step forward came with the work of John Burr Williams (1938) who gave us the dividend discount model - quite simply, that the value of a security was the discoun...

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