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Financial Innovators Shaping the Field of Investments Since 1900

Summaries of work by individuals and groups with links to explore.
  1. A reference - Keep a cheat-sheet of important historical events handy for presentations.
  2. Short summaries - Get straight to the point with a summary of each influencer's contribution.
  3. Further research - Go beyond the basics and follow links to other resources.
  4. Working document - Expect additions as website and YouTube content grows.
Paul Alan Davis, CFA, May 21, 2017
Updated: July 13, 2018
First is a description of what's covered and below that is the alphabetical list of influencers.

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Who is included?

The focus is on individuals and groups who shaped investment risk and financial modeling at the institutional level.

Individuals

  • academic scholars
  • famous investors
  • financial authors
  • behavioral finance scholars
  • engineers and programmers
  • famous economists
  • stock technicians
  • financial newsmakers
  • phd in finance

Groups

  • financial services companies
  • investment associations
  • financial certifications
  • research and investment companies
  • financial regulators and regulations

Links

Links to independent resources below will open in a new browser window.

  • Links to Wikipedia -
  • Independent websites -
  • Publicly-available pdf documents -
  • YouTube videos -

A List of Financial Innovators

ABCDEFGHIJKLMNOPQRSTUVWXYZ

- A -

- B -

BARRA - an early provider of risk models to institutional investors, using a multi-factor approach in a manner similar to early works on the Arbitrage Pricing Theory.

Fischer Black - an American economist known for studies of the pricing of stocks and options. Black and Myron Scholes developed the Black-Scholes equation which is used to model the price of a derivative when used for hedging risk.

- C -

CFA Charterholder designation - identifies individuals who are associated with the CFA Institute and have passed tests across multiple disciplines associated with financial analysis. Disciplines include: ethics, economics, quantitative methods, equity valuation, fixed income, derivatives, and portfolio management.

CFA Institute - an association of security and financial analysts founded in the 1960s as the Association of Investment Management and Research (AIMR). The group, renamed in 2004, administers the CFA Exam and publishes research. There are over 100,000 Charterholders in over 60 countries.  

CFP Certification - identifies individuals who are associated with the Certified Financial Planning Board and have passed tests across multiple disciplines associated with financial planning. Disciplines include: insurance, employee benefits, investments, taxes, asset protection, retirement and estate planning.

- D -

Werner De Bondt - an academic researcher in the field of behavioral finance. His paper Does the Stock Market Overreact? (1985), with Richard Thaler, was one of the more important anomalies to the Efficient Market Hypothesis (EMH).  

Charles Dow - an American entrepreneur credited with the co-development of the first equity index, the Wall Street Journal and was noted for works in technical analysis called the Dow Theory.

David Dodd - an American financial analyst who wrote extensively on the topic of fundamental analysis along with Benjamin Graham. Their book Security Analysis (1934) described an orderly review of a company's financial statements to derive a company's value.

- E -

Robert D. Edwards - an author in the field of technical analysis. He wrote Technical Analysis of Stock Trends (1948) with John Magee.

Ralph Nelson Elliott - a popular American writer on technical analysis. His book, The Wave Principle (1938) equated prices and investor behavior to the movement of waves.

Robert F. Engle - an American economist known for his studies on the forecasting of risk. His 1982 paper introduced ARCH as a method for achieving higher accuracy than using historical variance along when predicting future volatility. His work highlighted volatility clustering and was quickly incorporated into third-party risk models.

- F -

Eugene Fama - an American economist influential in asset pricing theories, including the Efficient Market Hypothesis (EMH). This theory set a framework for academic studies to test how quickly information is incorporated into security prices.

Federal Reserve Economic Data (FRED) - a collection of data sets maintained by the Federal Reserve Bank of St. Louis. As of June 2016, it housed over 380,000 data sets from 80 sources. The source can be accessed from mobile devices, in a browser or through and API for developers.  

Kenneth French - an economist who, with Eugene Fama, published research refuting the CAPM, using multiple factors to more accurately explain asset pricing of stocks. French posts returns of factor portfolios at the following link.  

- G -

Carl Friedrich Gauss - a German mathematician famous for his work in algebra, statistics and number theory. He was instrumental in the development and later use of the normal distribution, often called the Gaussian distribution, or Gaussian function.

William Gann - an American author, trader and market technician. He is known for creating charting methods based on geometry, astronomy and ancient mathematics.  

Myron J. Gordon - an American economist known for advancements in fundamental analysis. He published work on forecasting dividends along with Eli Shapiro, including the Gordon Growth Model.

Benjamin Graham - a widely-followed British-born American economist who wrote extensively on the topic of fundamental analysis along with David Dodd. Their book Security Analysis (1984) described an orderly review of a company's financial statements to derive a company's value.

Richard Grinold - an academic researcher, professor and author, who with Ronald Kahn, wrote Active Portfolio Management (2000). This popular book added scientific and quantitative structure to the alpha and trading side of the portfolio optimization equation, where risk advancements had already been made decades before with MPT, CAPM and APT.

- H -

 

- I -

 

- J -

Narasimhan Jegadeesh - a researcher, who, with Sheridan Titman, wrote the paper Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency (1993) identifying an intermediate-term price momentum anomaly to the Efficient Market Hypothesis (EMH).

- K -

Ronald N. Kahn - an academic researcher and author, who with Richard Grinold, wrote Active Portfolio Management (2000). This popular book added scientific and quantitative structure to the alpha and trading side of the portfolio optimization equation, where risk advancements had already been made decades before with MPT, CAPM and APT.

Daniel Kahneman - a psychologist and co-author of works with Amos Tversky on the intersection between the fields of psychology and economic decision-making. Their work pushed forward psychological explanations for why investors bahave irrationally.  

Maurice Kendall - a British statistician was one of the first to use the term random walk to refer to the pattern of stock prices. In his paper titled The Analysis of Economic Time Series (1953) he found that stock prices moved in random patterns.

- L -

Gustave Le Bon - a French researcher known for his writings on crowd psychology, herd behavior and the study of human traits. His work is often referenced in works related to irrational behaviors of investors.

John Lintner - an American professor and researcher who contributed to the Capital Asset Pricing Model (CAPM) from the perspective of a company issuing shares of stock.

Lipper Analytical Services - a firm founded in 1973 providing data and software aiding in the analysis of mutual funds. The firm was acquired by Reuters in 1998, which merged with Thomson Fiancial in 2008.

- M -

John Magee - an author in the field of technical anlaysis. He wrote Technical Analysis of Stock Trends (1948) with Robert D. Edwards which pioneered much of the early work in Technical Analysis.

Harry Markowitz - an American economist famous for his work on modern portfolio theory, which developed the view that rational investors seek to maximize expected returns versus expected variance. His work brought scientific rigor to the analysis of stock prices.

Merton Miller - an American economist and Nobel Prize winning scholar who developed the theoretical aspects of valuation techniques. He and Franco Modigliani created the Modigliani-Miller theorem.  

Franco Modigliani - an Italian professor, economist and Nobel Prize winning author for his research on the capital structure of public companies. His work, with Merton Miller, is called the Modigliani-Miller theorem.

Oskar Morganstern - a German economist known for academic papers on the expected utility function, adding structure to the behavioral and fundamental aspect of investing. He wrote, Theory of Games and Economic Behavior (1944) with John von Neumann.

Morningstar - a firm, founded in 1984, and an early pioneer in providing investors with data and analytics on mutual funds. Now, Morningstar provides information on stocks and hedge funds.    

Jan Mossin - a Norweigian economist known for contributions to the Capital Asset Pricing Model (CAPM)

- N -

Northfield Information Services - a firm that provides data, analytics, optimizers and risk models to institutional investors using the APT multi-factor model type.

- O -

- P -

Michael Porter - An author, economist and educator whose books on corporate strategy and competition were instrumental in the analysis of strategy, both internally by corporate management, and externally by fundamental financial analysts.

- Q -

- R -

Barr Rosenberg - a noted scholar at UC Berkeley who wrote on predicting beta. He was instrumental in the advancement of risk modeling using multi-factor APT models and incorporating advanced statistical measure for forecasting risk.

Stephen Ross - an economist who developed the concept of Arbitrage Pricing Theory (APT) in the 1970s. This work was instrumental in the advancement of multi-factor risk models that allowed practitioners more granularity in managing risk than using CAPM's beta alone.

George Russell - an entrepreneur who joined his grandfather Frank's small brokerage firm and turned it into a full-fledged pension consulting firm in 1970. The Frank Russell Company was one of the first consultants to bring modern portfolio theory to the institutional investment space.

- S -

Series 7 - the General Securities Representative Exam is a license to sell securities for commissions in the United States. It is administered by FINRA, the Financial Industry Regulatory Authority. The exam tests candidate knowledge in broker-dealer relationships, client needs and investment objectives, suitability and securities markets.

Eli Shapiro - an American economist known for advancements in fundamental analysis. He published work on forecasting dividends along with Myron J. Gordon, including the Gordon Growth Model.

William F. Sharpe - an American economist and Nobel Prize winner best known for his work on the Capital Asset Pricing Theory in 1964. The theory helps to establish an expected return for a stock based on a component of time plus the market price of risk. The widely used Sharpe Ratio is named after Sharpe.  

Robert J. Shiller - an author, economist and Nobel Laureate who is known for studies in behavioral finance, real estate and equity valuation. In his book Irrational Exuberance (2000) he argued that stock prices were too high just before the bursting of the Internet bubble. This was a rare example of a comprehensive work calling the end of a bubble in real time.

Andrei Shleifer - an economist, professor and researcher in the fields of behavioral finance and financial economics. He also founded a large quantitative equity money management firm. His work with Lawrence Summers delineated two areas of research in behavioral finance; first, studies of psychology, and second, reasons why arbitrageurs may be unable to quickly adjust prices to fundamental value.  

Richard Sloan - a researcher who identified an anomaly to the Efficient Market Hypothesis (EMH) by comparing earnings based on real cash flows versus reported earnings. Accruals research helped identify companies that were overvalued. This reasearch was quickly incorporated into quantitative models in the 1990s.

Lawrence Summers - an economist in the fields of behavioral finance, financial economics and public policy. His work with Andrei Shleifer delineated two areas of research in behavioral finance; first, studies of psychology, and second, reasons why arbitrageurs may be unable to quickly adjust prices to fundamental value.  

- T -

Richard Thaler - an academic researcher and author in the field of behavioral finance often collaborating with Daniel Kahneman and Werner De Bondt. His paper Does the Stock Market Overreact? (1985), written with De Bondt, was one of the more important anomalies to the Efficient Market Hypothesis (EMH). Thaler had a cameo explaining synthetic CDOs in the mainstream movie The Big Short (2015).  

The Investment Company Act of 1940 - codified the activities of investment advisors with the US Securities and Exchange Commission (SEC), shifting regulation from state governments to the national government in the United States.

The Securities Act of 1933 - codified the registration of securities with the US Securities and Exchange Commission (SEC), shifting securities regulation from state governments to the national government after the market crash and subsequent Great Depression in the United States.

Sheridan Titman - a professor and researcher of asset pricing who, with Narasimhan Jegadeesh, wrote the paper Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency (1993) identifying an intermediate-term price momentum anomaly to the EMH.

Jack Treynor - an American author, researcher and money manager noted for work on a pricing model similar to the Capital Asset Pricing Model. He is also known for the Treynor Ratio.  

Amos Tversky - a cognitive psychologist and co-author of works with Daniel Kahneman in the field of behavioral economics. Their work pushed forward psychological explanations for why investors behave irrationally.

- U -

 

- V -

John von Neumann - a mathematician who wrote academic papers on the expected utility function, adding structure to the behavioral and fundamental aspect of investing. He wrote Theory of Games and Economic Behavior (1944) with Oskar Morgenstern.

- W -

John Burr Williams - developed the concept of intrinsic value as part of fundamental analysis. His book, The Theory of Investment Value (1938) established a structure to the technique called discounting which includes dividend discount modeling as well as discounted free cash flow valuation.

Wilshire Associates - a firm founded by Dennis Tito in 1972 became one of the first consultants to bring modern portfolio theory and the newly-developed scientific aspects of investments to institutional clients.

- X -

 

- Y -

 

- Z -

 


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Keywords:
scholars in finance
investment associations
investment authors
famous economics
financial innovators
innovation in finance
famous investors
behavioral finance
portfolio theory
financial regulatros
stock trading technicians
investment modeling