Finance Scholar William F. Sharpe Honored for Financial Writing

Nobel Laureate and Stanford GSB emeritus faculty member William F. Sharpe has been honored for the fifth time with the Graham and Dodd Award of Excellence. Established in 1960 by the Financial Analysts Journal the award recognizes excellence in financial writing.

In his winning article, “Adaptive Asset Allocation Policies,” published in the May/June 2010 issue of the Financial Analysts Journal, Sharpe, who is STANCO 25 Professor of Finance, Emeritus, proposes a much simpler approach to asset allocation than traditional methods, one that adapts to market movements by taking into account changes in the outstanding market values of major asset classes. Such a policy considers important information, reduces or avoids contrarian behavior, and can be followed by a majority of investors.

Sharpe has received the Graham and Dodd award four times previously:

• 2007: “Expected Utility Asset Allocation”
• 1998: “Morningstar’s Risk-Adjusted Ratings”
• 1973: “Bonds versus Stocks: Some Lessons from Capital Market Theory”
• 1972: “Risk, Market Sensitivity, and Diversification”

The Graham and Dodd Award of Excellence honors Benjamin Graham and David L. Dodd, both members of the Columbia University faculty, for their enduring contributions to the field of financial analysis.

Sharpe shared the 1990 Nobel Prize for Economics with Harry Markowitz and Merton Miller; he was cited for his work in developing models to aid investment decisions. His theory, called the Capital Asset Pricing Model, is now considered the standard for the investment industry and is used by corporate, institutional, and pension fund managers to plan and judge their investments.

Sharpe, a native of Cambridge, Mass., received all three of his degrees from the University of California in Los Angeles. He arrived at Stanford Graduate School of Business in 1970 as a professor of finance, retiring to emeritus status in 1999.

Sharpe is president of William F. Sharpe Associates, a consulting company; cofounder of Financial Engines, a retirement advice firm.

He has written six books, authored numerous scholarly papers, and is past president of the American Finance Association.