Stock Broker tips can lead to a Nobel Prize

You often come across people who crib about bad the stock-broker tips are. Despite this people often look forward to any tip from their/other’s brokers on which particular stock would rise or fall and make their decisions accordingly.

Though, there is one man who surely cashed on the stock-broker’s tip- Harry Markowitz, the 1990 Nobe Prize Laureate. I came across this fantastic weblink where all the who’s who of finance have discussed history of finance and their contribution to the field.

I was going through this Markowitz transcriptand here is the discussion in brief:(Buser is the interviewer)

BUSER:Tell us a little bit more about how you got this idea for your dissertation topic.You were a graduate student at the time?

MARKOWITZ:         Right.            I was at the stage where I had to pick a dissertation topic.

So I went to my advisor, Professor Jacob Marschak.  He was busy when I got there, so I waited in his ante room.  There was another fellow in the ante room who turned out to be a broker waiting for Marschak.  We chatted while we were there, and he suggested that I should maybe do a dissertation on the stock market.  So I went in.

BUSER:A stockbroker gave you the idea?

MARKOWITZ:         That’s right, a stockbroker.

BUSER:A tip that paid off.

MARKOWITZ:         Yeah.  Some biographer of mine said this was the best advice a stockbroker has ever given.  And I agree…….

This is simply fantastic. I had read this long back in Peter Bernstein’s book- Capital Ideas and thrilling to read Harry confirming this. A stock-broker’s tip that led to development of portfolio theory and subsequently the Nobel Prize!!

Well, actually the stock-broker ideas can really lead to some good research ideas. They can point to some event studies, why certain group of stock moves up/down, etc. This has indeed been the case as we have a lot of research in financial markets which can only shape up witht he help of brokers. Many papers even give the credit to certain stock-broking firm, stock-broker etc. But then the public only seeks them for stock prices, something which is highly random.

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7 Responses to “Stock Broker tips can lead to a Nobel Prize”

  1. Stock tips can lead to a Nobel Prize Says:

    […] Mark wrote an interesting post today onHere’s a quick excerptYou often come across people who crib about bad the stock-broker tips are. Despite this people often look forward to any tip from their/other’s brokers on which particular stock would rise or fall and make their decisions accordingly. … […]

  2. Financial Md » Stock tips can lead to a Nobel Prize Says:

    […] Original post by Mostly Economics […]

  3. » Stock tips can lead to a Nobel Prize Says:

    […] ABOUT wrote an interesting post today onHere’s a quick excerpt You often come across people who crib about bad the stock-broker tips are. Despite this people often look forward to any tip from their/other’s brokers on which particular stock would rise or fall and make their decisions accordingly. Though, there is one man who surely cashed on the stock-broker’s tip- Harry Markowitz, the 1990 Nobe Prize Laureate. I came across this fantastic weblink where all the who’s who of finance have discussed history of finance and their contribution to the field. I […]

  4. Why CAPM was named CAPM? « Mostly Economics Says:

    […] is a superb interview form the great mind. It tells you how the main idea came into being (Markowitz got it from a broker), how difficult it was to get the main ideas in finance across to economists, […]

  5. Get Nobel Prize ideas in a parking lot « Mostly Economics Says:

    […] is amazing to find how all these Nobel laureates get ideas which lead to The Prize after all. I had pointed earlierhow Markowitz got a Nobel Prize idea after he got a tip from a […]

  6. How Eugene Fama became an economist? « Mostly Economics Says:

    […] cite luck/ serendipity/ coincidence  in making them what they are. All these – Samuelson, Markowitz, Becker etc – have said the same in different […]

  7. Michael "Penny Stock Broker" Resell Says:

    I wish most stockbrokers gave even a remotely useful investing/trading tip. Usually, they just try to persuade you to get into a different investment than the one you are currently in. Time to change brokers when that happens…

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