John G. Watson

Lecturer in Finance
Academic Area:
John G. Watson

Bio

Dr. Watson joined Financial Engines in November 1996. Financial Engines is an investment advisory service founded by William F. Sharpe, The STANCO 25 Professor of Finance, Emeritus, and it currently manages over $92 billion worth of 401(K) assets for its clients. Dr. Watson contributed to the theory, patents, and code for the simulation, style-analysis, and optimization engines that power the company’s services.

Prior to joining Financial Engines, Dr. Watson specialized in the design and implementation of PC software solutions to business problems. His professional experience includes designing systems for optimizing hydroelectric power production and co-inventing a patented fingerprint-matching algorithm. However, he is best known for his work with Dan Fylstra (Frontline Systems) on the Microsoft Excel Solver, the optimization tool that automates spreadsheet “what-if” analysis. Other assignments have included work with major software developers such as Borland and Microsoft, and a list of financial institutions: BARRA, C*ATS Software, Micropal, Rogers-Casey, TSA Capital Management, and Zephyr Associates.

Dr. Watson’s academic training is in the field of Applied Mathematics. After obtaining his BS, MS, and PhD in Mathematics from Rensselaer Polytechnic Institute in upstate New York, Dr. Watson taught at the University of Miami and Northwestern University. Following his stay at Northwestern, he was a research associate of J.B. Keller at Stanford University in Palo Alto, California. He now lives in nearby Menlo Park.

Academic Degrees

  • PhD, Department of Mathematical Sciences, Rensselaer Polytechnic Institute, 1978
  • MS, Rensselaer Polytechnic Institute, 1973
  • BS, Rensselaer Polytechnic Institute, 1971

Academic Appointments

  • At Stanford since 2009
  • Fellow, Financial Engines, Inc., 1996-present
  • Lecturer, Stanford University, 2009-2010

Awards and Honors

  • 2010 INFORMS Impact Prize (Solver Team)

Service to the Profession

    • Member, Society of Sigma Xi
    • Member, Society of Industrial and Applied Mathematics

    Journal Articles

    Jason S. Scott, John B. Shoven, Sita N. Slavov, John G. Watson
    The Journal of Retirement
    December 2023 Vol. 10 Issue 3 Pages 47–70
    Jason S. Scott, John G. Watson
    Financial Analysts Journal
    2013 Vol. 69 Issue 5 Pages 45-60
    Jason S. Scott, John G. Watson, Wei-Yin Hu
    Journal of Risk and Insurance
    2011 Vol. 78 Issue 1 Pages 213-244
    Jason S. Scott, William F. Sharpe, John G. Watson
    Journal of Investment Management
    2009 Vol. 7 Issue 3 Pages 31-48
    Daniel Fylstra, Leon Lasdon, John G. Watson, Allan Waren
    Interfaces
    1998 Vol. 28 Issue 5 Pages 29-55

    Teaching Statement

    John G. Watson is currently a Financial Engines Fellow and focuses on post-retirement economics and the modeling of retiree spending and investment decisions. Dr. Watson co-teaches "Modeling for Investment Management" with Professor Steve Grenadier. Many of the techniques used by Financial Engines and other professional investment managers are covered in this course and illustrated using Excel spreadsheet models such as portfolio optimization, mutual-fund style-analysis, and risk-neutral asset-pricing.