Ten Nobels for the future

William F. Sharpe was born on June 16, 1934 in Boston, Massachusetts. He received his B.A. (in 1955) and M.A. (in 1956) in Economics from the University of California in Los Angeles.

After a short period in the Army he joined the Rand (Research & Development) Corporation in 1956 as an economist, performing "path-breaking work in computer science, game theory, linear programming, dynamic programming and applied economics". While at Rand he pursued a Ph.D. degree in Economics at UCLA, which he received in 1961.

In 1961 he moved to Seattle to take a position in Finance at the School of Business at the University of Washington, where he taught "a wide-ranging set of subjects, covering material from the fields of microeconomics, finance, computer science, statistics, and operations research". In 1968, he moved to the University of California at Irvine to participate in an experiment involving the creation of a School of Social Sciences with an interdisciplinary and quantitative focus. In 1970, he joined the Stanford University Graduate School of Business, where he is presently "Stanco 25" Professor of Finance.

In the 70s he also served as a consultant first to Merrill Lynch, Pierce, Fenner and Smith and then to Wells Fargo Investment Advisors, and in each case his goal "was to help put into practice some of the ideas of financial economics". In 1986, he took a two-year leave from Stanford to found Sharpe-Russell Research (which is now known as , William F. Sharpe Associates) a firm chartered to perform research and to develop procedures to help pension funds, endowments and foundations select asset allocations appropriate to their circumstances and objectives. Currently, he is Chairman of the Board of Financial Engines, Inc., a firm that provides electronic investment advice for individual retirement savings: "Over the past few years, I worked to make the techniques I developed for professional fund managers available to ordinary investors. Now, that ambition is a reality".

He was one of the originators of the Capital Asset Pricing Model, "the backbone of modern price theory for financial markets". He also developed the Sharpe ratio for investment performance analysis, the binomial method for the valuation of options, the gradient algorithm for asset allocation optimization, and returns-based style analysis for evaluating the style and performance of investment funds. In 1990 he received the Nobel Prize in Economics, with Harry Markowitz and Merton Miller, "for their pioneering work in the theory of financial economics".

He is past President of the American Finance Association and the recipient of a Doctor of Humane Letters, honoris causa from DePaul University as well as the UCLA Medal, UCLA’s highest honor.

Sharpe has published articles in a number of professional journals and has written six books, including Portfolio Theory and Capital Markets (McGraw-Hill, 1970), Asset Allocation Tools (Scientific Press, 1987), Fundamentals of Investments (with Gordon J. Alexander and Jeffrey Bailey, Prentice-Hall, 1993), and Investments (with Gordon J. Alexander and Jeffrey Bailey, Prentice-Hall, 1998)

In 1986 Sharpe married his wife Kathryn, "an accomplished painter, who shares both my personal and my professional life--the latter in her capacity as Administrator of William F. Sharpe Associates. [...] We enjoy sailing, opera and Stanford football and basketball games, especially when the weather is good, the music well performed and the opponents vanquished".

1998
Global Savings and Investments,
Computers and Communications