Friday, January 16, 2009

David G. Booth



David G. Booth has since 1981 been a pioneering leader of the investment firm, Dimensional Fund Advisors. After earning an undergraduate degree in economics from the University of Kansas, Booth then went on to earn an MBA from the then-named University of Chicago Graduate School of Business. (The school is now known as the University of Chicago Booth School of Business, thanks to a $300 million donation Booth made last year, the largest ever to a business school.)

While at Chicago, Booth studied and worked with Eugene Fama, pioneer of the "efficient markets" hypothesis and a leader of portfolio theory and asset pricing. After he left Chicago and work for Wells-Fargo, he joined his fellow Chicago-alum Rex Sinquefield in founding Dimensional Fund Advisors. The privately-held group now manages over $120 billion in assets.

By developing and implementing the idea that markets work efficiently in their pricing of equities, Booth and Sinquefield helped popularize the index fund model, which is at the heart of millions of Americans' investment strategies and which will help them retire comfortably without having to expend enormous sums and amounts of time in trying to "out-think," "out-guess," or "time" the market. Their firm instead relies on "enhanced indexing," a concept that was considered radical in the early 1980s, but has proven over time to be incredibly wealth-producing.

Sources:
Chicago GSB profile on Booth
Dimensional Fund Advisors official website
DFA profile of Booth
Wall Street Journal article on Booth gift to U-Chicago

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