Harry Markowitz was born in Chicago in 1927 and studied under the legendary economist, Milton Friedman, at the University of Chicago. Much later, Markowitz was awarded the Nobel prize for developing Modern Portfolio Theory (MPT). Traditional investing requires memorizing minute details of stocks and comparing them. In fact, there are about 14 thousand stocks with millions of data points, which is enough to choke the memory bank of most computers. On the other hand, MPT focused attention on the interactions of asset classes/sectors, not individual stocks, over the long-term, not the memorization of data points for the short-term.

Fortunately, I was able to take a “deep-dive” into MPT at Wharton and was fascinated by the optimization of asset classes. How do you know the proper allocation between asset classes to maximize performance and minimize risk at the same time? I also met with Dr. Markowitz in San Diego twice. Tall and lanky, he smiled easily and was interested in the thoughts of others. He was a kindly old professor, indeed. I liked him!

Sadly, he passed away June 22nd at age 95. Rest-in-peace!

One never knows if someone is happy in their professional life or not, but Dr. Markowitz made mine better. He liberated us from the breathless memorization of short-term data. Like Warren Buffett and Jeremy Siegel, he urged investors to invest for the long-term and avoid needless trading. Buying individual stocks is fine, but never lose sight of your allocation to asset classes and why.

God bless you, Harry!