MARKOWITZ, HARRY M.

MARKOWITZ, HARRY M. (1927– ), economist and Nobel Prize winner. Born in Chicago, Markowitz received his higher education, B.A. through Ph.D. (1954), at the University of Chicago. He was on the research staff of the Rand Corporation and technical director of Consolidated Analysis Centers, both in Santa Monica, California. After serving as a professor at UCLA (1968–69), he moved to New York where he was president of the Arbitrage Management Company (1969–72), worked as a private consultant (1972–74), and was a member of the research staff of T.J. Watson Research Center of IBM (1974–83). From 1982 he was been the Speiser Professor of Finance at Baruch College of City University of New York. From 1990 he was research director at Diawa Securities Trust. In 1990 he shared the Nobel Prize in economics with William Sharpe of Stanford University and Merton Miller of the University of Chicago "for their pioneering work in the theory of financial economics." For Markowitz, the Nobel award was in honor of his theory, first defined in the 1950s, of "portfolio choices," which showed that investors would do best if they built up a diversified investment portfolio. His theory sought to prove that a portfolio that mixes assets in order to minimize risk and maximize return could be practical. His techniques for measuring risk associated with various assets, and his techniques for mixing assets, became standard investment methods. His work on portfolio theory paved the way for financial microanalysis to become an accepted area of research in economic analysis. Markowitz also developed Simscript, a computer language that is used to write economic-analysis programs. Books by Markowitz include Portfolio Selection: Efficient Diversification of Investment (1959), Mean-Variance Analysis in Portfolio Choice and Capital Investments (1987), and The Theory and Practice of Investment Management Workshop (with F. Fabozzi and L. Kostovetsky, 2004). (Ruth Beloff (2nd ed.)