Where Harry Markowitz, Father of Modern Portfolio Theory, Is Invested Now
From: www.thinkadvisor.com
The 91-year-old Nobel winner also told ThinkAdvisor that AI should stand for “artificial idiocy.”
Nobel Prize winner Harry Markowitz, who conceived Modern Portfolio Theory, is 91 years old, boasts a list of corporate clients as long as your arm and has no intention of keeping his controversial views to himself, as evidenced in an interview with ThinkAdvisor.
For starters, here’s what Professor Markowitz thinks of artificial intelligence, the darling of multiple industries: “Artificial intelligence — quote-unquote — is artificial idiocy,” he argues. “There’s no magic elixir that somehow the Sorcerer’s Apprentice is conjuring up mysterious intelligence. It’s a [computer] program!”
In 1990, Markowitz, then a professor at the City University of New York, received the Nobel Memorial Prize in Economic Sciences for developing MPT. The award was shared with professors Merton Miller and William Sharpe for their work in financial economics. The previous year, Markowitz won the Von Neumann Award from the Operations Research Society of America. Operations research applies mathematical and computer techniques to solving problems of business and government.
Throughout the years, the Chicago native has focused on using such techniques to find answers to practical problems, especially those relating to “business decisions under uncertainty,” as he writes.
In the interview, he discusses MPT, the vagaries of securities investing and why he shifted to virtually all equities when hurricanes hit the U.S. in 2017. He also talks about the virtues of robo-advisors and what human FAs should bear in mind when it comes to MPT’s risk-reward curve.
