The notion that investors should diversify their portfolios seems self-evident now. But when Harry Markowitz first proposed a systematic way to implement that strategy, the financial community scoffed and no less an economist than Milton Friedman was skeptical. Said he: "Harry, what's this? It's not mathematics; it's not economics; it's not finance."
Last week, more than 35 years later, the Swedish Academy awarded the Nobel Prize for Economics to Markowitz, a professor at the Baruch College of the City University of New York, and two colleagues who built upon his work. Sharing the honor were William Sharpe of Stanford University and...
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