Intro
David Booth, founder and chairman of Dimensional Fund Advisors, traces the firm from Gene Fama's research database at Chicago to a Brooklyn spare bedroom to the largest active ETF issuer in the country, and lays out the argument in his new book. Barry Ritholtz works through the mechanics of index trading, the rise of the fee-only advisor, and Booth's philanthropy.
Guest: David Booth, founder and chairman of Dimensional Fund Advisors and author of Stay Calm, Learn to Embrace Uncertainty in Investing and Life
Host: Barry Ritholtz
Published: 28 August 2026 on Masters in Business
Listen on Omny | 1 hr 9 min
Key Takeaways
A scientist wouldn't run an index fund, because tracking an index is a constraint and constraints cost
"our most recent studies shows that the run-up was about 4%. When it goes into the index, the index pays about 4% more than a fair price"
The S&P 500 index fund was the marketing idea, not the science, and it won commercially anyway
The Wells Fargo trust department's fund changed hands, went to Barclays, and is now "the cornerstone of BlackRock"
The professionals still don't beat the market, and Booth says the last 12 months were worse than usual
"Only 27% last year, in the last 12 months" — Booth, citing a Wall Street Journal front page
Uncertainty is the source of returns rather than the obstacle to them
"if there's no uncertainty in investing, every investment would have the same return, the riskless return, whatever that is"
The answer to a 30% drawdown is that the price already reflects the news
His line to an investment committee in 1998: "I think all you've done is explain why the market's down 35%"
A century of stock returns covered the Depression, a world war and a pandemic and still paid the same average
"Through all of that, 10% a year"
Allocation comes down to two decisions: how much risk you take, then buy the whole market
"That makes you as good as the insiders"
Dimensional's claimed edge is execution, not selection — it gets paid for being the patient side of the trade
"We provide liquidity, and our clients get the benefit of providing that service"
The fee-only advisor was almost as important to the business as the science was
"I don't have clients with investment problems. I've got investments with client problems"
The SEC has approved merging Dimensional's mutual funds and ETFs into a single pool with two wrappers
Philanthropy as payback: $300 million to Chicago, $300 million to Kansas Athletics, and Naismith's rules bought at auction and handed to Kansas
Fifty-five years in, he says the science was never the hard part — the persuasion was
Chicago, CRSP and a Front-Row Seat to Fama
Booth went to the University of Chicago expecting an academic career, on the reasoning a lot of students use — you want to be a professor "because that's all you know" — and he still describes the thrill of a student getting it as the same feeling as a client getting it
He corrects his own credentials on air: "First, let me just make a slight correction. I actually didn't get a Ph.D." He left the doctoral program and, as he puts it, got the MBA on the way out
Finance became a science when the data arrived, not when the ideas did: "For something to be a science, you need testable hypotheses", and before 1960 there was nothing to test anything against
Chicago built the research-quality database around 1963 — CRSP, starting in 1926 and since extended, so "now we have over 100 years of data"
Jim Lorie and Larry Fisher built it and handed it to Fama, Booth's mentor and the 2013 Nobel laureate, telling him to do something with the data; that gave him "a head start on everybody" and 20 years as the most cited academic in the field, and Ritholtz notes he is still among the most cited
The pivot out of the PhD was a division of labor: "the world would be better served if Gene Fama did research and I tried to apply the ideas rather than the other way around"
Fama called Mac McQuown at Wells Fargo, who ran quantitative methods for the bank and had wanted one of his students, and Booth left for San Francisco in the early 70s
The First Index Fund, and Wall Street's Reaction to It
The client behind the first index fund McQuown's group built was Samsonite, and Booth says it "turns out it was really pivotal in kind of the history of finance"
The research question underneath it was the practical one: "if you can't outguess the market, how are you supposed to invest?"
The finding that reorganized his career: "the professional investors don't seem to be able to beat the market" — years of work and no compelling evidence the managers are worth the cost
His own family is his example of what that costs an outsider: his parents grew up in the Depression and fought World War II, and "they never invested in public markets because they thought of themselves as outsiders, and the insiders would make all the money and just take advantage of them"
"So they never invested, and they had a little tougher time in retirement than they probably should have"
Ritholtz allows that before the postwar era they "weren't so wrong"
The implication he has spent his career selling: "the outsiders can do as well as the insiders" — maybe better once fees are counted, because market portfolios are now cheap and easy to buy
Ritholtz puts the annual studies to him, Morningstar, SPIVA and Dalbar alike: "in any given year, less than half of professionals beat the index, and I think that's net of fees"
Booth answers with a front-page Wall Street Journal piece from the day before: "Only 27% last year, in the last 12 months"
Ritholtz's explanation is sector concentration — one sector dominated, and anyone without exposure badly lagged
Booth's punchline is that anyone who could pick the sector and time it right "you don't need our help"
The reception on Wall Street was not quiet: "No, there was a huge pushback. It was stuff they didn't want to hear" — firms had claimed for years they could beat the market in any market, and the data would not support it
"if you have data and the other side doesn't, it's kind of an unfair fight"
The Wells Fargo Group That Became BlackRock
Two projects ran at Wells at once. Booth's group used Fischer Black and Myron Scholes as its outside consultants, and while working on the project they produced the Black-Scholes option pricing model — Scholes became a Nobel laureate for it, Black had died and did not share it
His group's idea sounds naive to him now: accept that the pros can't beat the market, then try to beat it by holding a higher-beta portfolio built from equal dollar positions in every stock, still diversified — "That was the thinking. Incredibly naive. We were kind of geeky back then"
He stops to define the term for listeners: the market's beta is one, a portfolio that fluctuates more has a beta above one, one that fluctuates less is below
The other project, in the trust department, was an S&P 500 index fund, and Booth says a marketing instinct rather than the science is what carried it — everyone understands tracking an index, the pros can't beat it, so at least collect the index return
That fund is the ancestor of the largest asset manager in the world: the group changed hands a couple of times and "now that's the cornerstone of BlackRock"
Ritholtz sizes up what it turned into: "It worked its way eventually to Barclays, and then BlackRock bought that whole business in, what are they, 14, 15 trillion?" — Booth's reply is "it's phenomenal success. So I'm not arguing", and that they proved his own point about how hard the market is to beat
Booth's group did not survive the building: "we ended up irritating the trust department enough, they got rid of us" — and that group became the basis for Dimensional
Starting Dimensional From a Brooklyn Spare Bedroom
The founders brought in Fama and McQuown first, then the other academics they had worked with — Merton Miller, the 1990 Nobel laureate, and Myron Scholes, the 1997
The first fund, in 1981, was small-cap, and Booth claims the vocabulary as well as the product: "We were the first people to use small-cap as a term"
The pitch to institutions was diversification, not outperformance: in 1981 large institutional investors "weren't holding the stocks of smaller companies in a meaningful way", so a diversified investor wanted large and small rather than large alone
Fama then pointed him at Rolf Banz, whose dissertation split New York Stock Exchange stocks into size quintiles and found the smallest quintile "outperformed all the others by quite a bit over time"
How the product definition actually got set: "putting my marketing hat on, I go, I think we'll define small to be the smallest quintile of companies on New York. And Mama didn't raise a complete idiot here, you know?"
The pitch worked partly because nobody could claim they had it covered already
The firm ran on the strength of the idea rather than any track record: "I'm the first portfolio manager. I'd never managed stocks or even bought stocks before. And we're operating out of my spare bedroom in downtown Brooklyn Heights"
About ten years later Fama and Ken French published the multifactor model; Ritholtz notes it began with three factors, went to five, and that hundreds have been proposed since, most of them tiny and prone to collapse
Booth's ranking of the factors is blunt: the market gives you the big bang, value versus growth picks up a lot though less, small adds a little, and past that "there's diminishing marginal utility like everything in life"
Why Wall Street Wanted Nothing to Do With Trading Less
"back in those days, basically nearly all financial services were distributed through commission salesmen"
"if you have a commission broker managing your money, I don't know what you're going to do, but you're going to be trading a lot, I can assure you"
The research pointed the other way, at the thing the industry was built on: "Trading is a negative expected outcome, kind of like gambling in Vegas"
"all I can tell you is we have logic, reason, and empirical evidence on our side. You have no data. All you have is bluster on your side" — and "over the long haul we're winning, but it's taken 50 years"
Ritholtz offers the line in paraphrase: "hard to make somebody understand something when their income is depending on them not understanding it"
Booth on the distribution machine of the era: "Wall Street firms in those days were very good at shoving product down people's throats", and Ritholtz says they are still pretty good at it
What softened his view: "almost as important as the development of the science, was the development of the fee-only financial advisor", a group Dimensional started working with in the late 1980s
Why a Scientist Wouldn't Run an Index Fund
Ritholtz frames Dimensional as indexing married to systematic factor investing rather than market-cap indexing, and Booth says the argument with the indexers goes back to the two groups at Wells and has run 45 years
"as a scientist, you wouldn't index for a lot of reasons. One is: you're putting a constraint on yourself" — you have committed to tracking an index, and constraints cost in economic terms
The mechanics are the second reason: if Standard & Poor's adds a stock to the S&P 500 today it goes in at tonight's closing price, so every index fund manager wants that stock today at tonight's close
Ritholtz finishes the thought — "Even though you know it's going to run up in anticipation" — and Booth adds that you also know every other index manager is trying to do the same thing
"the simplest of all ideas is if you're trying to buy a stock at the same time everybody else is, that's probably not a good trade"
The size of that cost, on Dimensional's own research: "our most recent studies shows that the run-up was about 4%. When it goes into the index, the index pays about 4% more than a fair price"
Ritholtz supplies the mirror image: deletions "have a tendency to outperform the S&P over something like 12 or 24 months", because sellers move in advance and the stock is appreciably cheaper by the time it actually leaves
Booth's analogy for the gap between the two is medicine — everyone studies the same textbooks, and some are better at execution than others
Trading Against People Who Are in a Hurry
The cost of his approach is that a client has to trust the manager: an index fund is knowable because "they track the gosh darn index", while Dimensional uses a little flexibility and a little human judgment, "not like the old days of wild stock picking"
Early clients asked the obvious question — how do we know you can execute against professionals who think they have information you don't
The flip side is what makes the trade work: an active manager who thinks he knows something special also knows the half-life of that edge is short, "minutes probably", and Ritholtz updates it to milliseconds
That manager wants out today; Dimensional is indifferent about which day, and buys what is trading easily
"We buy 10,000 stocks on any given day, you know, we don't buy all 10,000" — and even a small-company stock trades heavily 20% of the time
"We provide liquidity, and our clients get the benefit of providing that service" — his framing is a service rendered rather than an edge taken
"We're not going to pay retail for that stock, but if you can talk to me, can you do something for me on the price?"
Uncertainty Is Where the Opportunity Is
Ritholtz sums the book up in a line from it — "uncertainty isn't something to fear. It's where possibility lives" — and Booth's reaction is that he had forgotten writing it: "you write it and then you forget you wrote it"
The breakthrough came about ten years ago: the parallels between investing and life experience both run through how a person handles uncertainty, and uncertainty is what creates opportunity
"it's not about eliminating uncertainty, it's about managing uncertainty"
The investing version is an identity, not a metaphor: "if there's no uncertainty in investing, every investment would have the same return, the riskless return, whatever that is"
Ritholtz interrupts with the yield joke: "I got some 10-year Treasuries at 3.5% that you can hold and barely keep up with inflation"
Booth's test of how predictable life is: think back 20 years and ask whether you could have called where you are now, or where you will be 20 years out
Ritholtz answers with the obvious case — "Nobody in December 2019 was predicting a pandemic the next year in a market that would scream higher"
What He Tells People When the Market Is Down 30%
Ritholtz asks how an ordinary investor lives through "the regular 15%, 20%, 25% drawdowns we see all the time in equity markets", and Booth's answer is the title of the book: "the quick answer to that is stay calm"
The reflex he is trying to interrupt: bad news arrives, the investor looks at a market down 20% and concludes he has to get out — "That is human nature logic"
What he wants substituted for it: "kind of the cornerstone of all of my belief in markets and how they work is human ingenuity"
"That's a big smash in the mouth to these firms. They're not just going to sit there and take it" — companies try something new, there are winners and losers he cannot name in advance, and the recovery tends to arrive faster than people expect
Ritholtz's numbers for the last episode: "the pandemic was less than a quarter, down 34 percent. And from that end of the first quarter in 2020, the S&P was up 69% for the rest of the year"
Booth's first-principles version: the consensus then was a two- or three-year phenomenon, and a market down 20% or 30% "seems about right to me" given that
The 1998 investment committee story: the chairman toured the world's problems — Long-Term Capital Management, the Russian default, Asia contagion — and concluded by asking why they should own stocks at all
Booth told him the tour was accurate but "I think all you've done is explain why the market's down 35%"; the committee stayed invested and "we were amply rewarded"
He floats a sequel called Stay Invested; Ritholtz counters that the second book should be named What Would Gene Fama Say?
Plan, Don't Predict — and a Century That Paid 10% a Year
"you need to have a plan for going forward in life and investing. But don't waste time on trying to predict the unpredictable"
The reason the pros can't beat the market is the same reason the forecasts fail: the market is unpredictable
The record he keeps returning to: "100 years of returns, that covers the Great Depression, World War II, you know, Korean War, high inflation, great financial crisis, pandemic. Through all of that, 10% a year"
"These public markets are truly miracles" — telling students that is now a large part of what he does
Ritholtz reads back the book's other thesis, control what you can and manage what you can't: crashes, recessions and interest rates are outside it, allocation and saving are inside it
Booth's version of managing is a long-term plan you revise for life events — a new job, retirement, a family — and never for what the market is doing
The whole allocation reduced to two decisions: first the split between stocks and "relatively riskless assets like a money market fund or a bond", then, "to the extent you're investing in stocks, buy the whole market. That makes you as good as the insiders"
Ritholtz's frame for what sits outside the plan: you can't control the Fed "or what's happening in the Strait of Hormuz"
Financial Media Is Noise, and You Are Always Too Late
Ritholtz reads Booth's own line back to him: "modern financial media is designed to capture your attention, presenting commentary, stories, and expert forecasts that are nothing more than distracting noise"
"we have a lot more data thrown at us than ever before. I don't know how we have a lot more meaningful information, but we have a lot more data, that's for sure"
His anxiety comparison, offered against a year of wars and tariffs: "do you think you have more anxiety today or people have more anxiety today than during the Great Depression or during, say, World War II when it looked like we were losing at first?"
He is careful to say he is not making light of today's anxiety; his point is that a century of data shows the market does a good job of pricing the uncertainty and the risk
Ritholtz says he gets a ton of pushback every time he writes that readers should tune out the noise, and asks for the argument back
Booth's answer is mechanical rather than psychological: "unless you're faster than the market, unless you think you're smarter than the market, you just have to assume that whatever it is you're concerned about has already been priced in. You're too late"
True Wealth, and the Compounding of Decisions
Ritholtz quotes the passage he calls the most profound thing in the book: "This isn't a book about how to invest. It's a book about how to think about investing. It's not about picking stocks. It's about taking stock of what really matters"
Booth's own example of worth without money is his parents: "My parents, I describe as being wealthy. They just didn't have much money" — the section of the book is about deciding what is actually important to you
Ritholtz's phrase for it is the quiet dividend of patient compounding in both life and investing
The arithmetic underneath: "If you get that 10% return, it means your portfolio doubles every seven years"
"You are the result of the effects of the compounding of decisions that you've made in life all the way through" — and that, he suggests, may be where wisdom comes from
Why Dimensional Sold Through Advisors Instead of Main Street
There was no marketing machine to speak of — the firm was starting out of his apartment — and the founders knew institutional investors rather than the retail public
The first eight years or so were large clients: pension funds, insurance companies, sovereign wealth funds
Then Dan Wheeler, a financial advisor in Sacramento, asked for access to the funds, about 1989 — long before advisors displaced stockbrokers, when the fiduciary side of the business was still tiny
The structural fit was the fee: the mutual fund was priced institutionally, which suited "a fee-only advisor being one that we don't pay them any money, they don't pay us. I mean, it's strictly arm's length"
Where those early advisors came from: "advisor would come from a wirehouse, felt really dirty about themselves, and I'm just repeating what they told me"
Ritholtz's version, from an advisor he asked in the early 2000s why he left: "they're called brokers because they made their clients broke"
Booth's case against retail stock picking is about margins rather than morals: a professional manager can work market mechanisms, trading and securities lending, none of which is stock picking, but "the margins are very, very slim", so the idea that a broker down the food chain has some of that magic is hard to accept
The advisor's job is to keep the client in the seat: "I don't have clients with investment problems. I've got investments with client problems"
The difference between the two is education, which is why the firm runs seminars and why Booth writes the books
Four Decades Without an ETF, and the Single Pool Coming Next
Ritholtz's framing: Dimensional launched in 1981, launched its first ETF in 2020, and is now the largest active ETF issuer in the country, so why leave that money on the table for 40 years
Booth's first answer is a joke — "Well, I don't know. It must have been a pandemic" — and his real one is that the advisors said they didn't need an ETF
"the beauty of a regular mutual fund is you go in at net asset value at the end of the day. That's about as clean as you can come up with", while an ETF is bought in the open market, which some clients find a little scary
Ritholtz presses the tax case: "In a non-qualified account, ETFs are vastly superior to mutual funds most of the time for that tax reason"
Booth concedes it against a conventional mutual fund, then points at the dual-class structure he and Vanguard both use: "we've been able to eliminate a lot of the tax advantage of ETFs"
The next step is already cleared: the firm runs mutual funds and ETFs doing the same thing in two pools, and "SEC has given us approval to merge those two. So it'll just be one pool of assets with two ways of accessing it", coming this summer and into the fall
Two wrappers, one pool of money, which Booth says takes the argument away — and is what he means by not sitting on your hands after the science is done
Indexer or Active? His Answer Is Execution
Ritholtz offers his own reconciliation of the question people find confusing: traditional indexers use one factor, Dimensional uses three, four or five, so it is indexing plus the next several factors on the list
Booth accepts that as part of it, and notes the firm also runs plain vanilla funds for clients who want no value or small-cap tilt at all
In either case the differentiator he claims is execution: an index fund has to trade in a bizarre way and Dimensional does not, and that thinking is applied across every fund
"The way we structure portfolios, we think we can do better than index providers", and second, the way the firm trades relative to the way index funds trade
The tilt is the client's call: "some clients like to have a small cap bias. Some don't. So it's their money"
Two $300 Million Gifts and a School Named Without Being Asked
Ritholtz lays out the record: Booth signed the Giving Pledge a decade ago, and gave $300 million to the University of Chicago's business school in 2008, which Ritholtz believes was the largest gift of its kind at the time
The timing produced an accidental comedy: the announcement came in November 2008, the week after Obama was first elected, and the school promised a big announcement with free food — the crowd assumed it was about Obama
What Booth says he was paying back: the training, and the faculty following up over the 45 years since — "we've had five Nobel laureates work very closely with us", all of them significant directors of the funds or the company, with Fama a founder as well
"It's time for me to pay back, and it's got to be a big chunk of what I have" — the dean's reaction was that they had been thinking about naming the school and "we weren't asking for nearly this much"
Ritholtz says he heard Booth pushed back on the naming; Booth corrects him — he pushed back "a little bit, but not a lot", and did not argue against it
On his own motive he is unsentimental: "it was about me wanting to feel good about me"
Kansas, NIL and the Rules of Basketball
Last year he gave $300 million to the University of Kansas Athletics group; Lawrence is his hometown, he went to Lawrence High School and then the university, and "with all the relatives, it's in my blood"
His case for funding sports at a big state school: "what's really important is to have a great competitive athletic program" — he acknowledges some people are not sure about that argument
Ritholtz's addition is that athletics feeds marketing, faculty recruiting and the town itself
Booth's own bias is basketball, where Kansas has always been strong, and he says the football is getting better
NIL has raised the stakes, which Ritholtz glosses as "Name, image, likeness": "it puts great financial pressure on the schools. And it's difficult for a state school to have a big budget for athletics when their professors are not making what they're making", so alumni have to step up
The 2010 purchase was Naismith's original rules of basketball, which Booth gave to the Kansas athletic department — "James Naismith invented basketball in 1891" as a class assignment at the YMCA in Springfield, Massachusetts, and "It's the only major sport that I can think of where we know who invented it"
Why it had to go to Kansas: "the rules of basketball those two typewritten pages need to be in Lawrence, Kansas, because Naismith, after he invented the game, goes to teach at Kansas for 40 years. He's buried in Lawrence"
The auction was expected to fetch about $2 million; Booth was bidding by telephone against another telephone bidder who kept ratcheting it up, and he "ended up paying about $4.5 million"
The underbidder turned out to be a fellow Bloomberg host, who emailed him the next day to say "hey, I think I cost you some money"
MoMA's Conservation Lab
Ritholtz notes that some of Booth's sculptures are visible from a river in Texas, and that instead of donating a painting he endowed a conservation center at the Museum of Modern Art
Booth's reason is that preserving a country's patrimony matters and MoMA is a great museum; Ritholtz adds that roughly 3% of the collection is displayed at any one time
He has been on the board about ten years and has headed the conservation committee for a while
Conservation is the part that gets overlooked, and modern art makes it harder — the work may be fiberglass or anything else
Ritholtz adds the slower problems: paint decays, canvas decays, paper decays
The practice itself has changed completely: "in the old days, probably it was kind of conservation was somebody kind of having a couple sips of alcohol and daubing some paint on a painting", against x-rays and chemistry now
Mentors, Books and the Pandemic Television Years
His mentor list starts where you would expect: "Let's just start with the Nobel laureates, Merton Miller, Gene Fama, Myron Scholes, Bob Merton, and Doug Diamond", which Ritholtz calls a murderer's row
Mac McQuown, who "really started indexing", was a founder, and Booth says the bigger contribution was helping raise the risk capital for the firm rather than investing in the funds
His parents are on the list too: "They never had much money, but they were wealthy. They'd figured out what life was about"
Reading: he has just finished 1929, Andrew Ross Sorkin's new book, and rates Paris 1919 by Margaret MacMillan from the last couple of years
The Treaty of Paris took about six months after the armistice, with the Ottoman, Russian and Austro-Hungarian empires collapsed and new countries to be drawn across Central Europe and the Middle East
"The first five or so they didn't do much and then all of a sudden in the last month they just got together" — chaotic, though he is not sure they could have done much better
Watching: a new season of Ted Lasso, which he is "really all over", and he notes in passing that "he's a KU alum as well"
The pandemic reset his television habits: "I watched more TV in that two-year period than I ever watched before or since"
Ritholtz says the same, and adds that 6:30 has become the hard dinner reservation, because people want to eat and get home to whatever they are watching
What He'd Tell a Graduate, and What He Missed in 1981
Asked for career advice, he declines the word: "I don't give advice, but here's some thoughts"
The conventional part is to find where you have a comparative or competitive advantage and what you are passionate about — "So marry those two things, passion and skill, and work really hard"
The part he thinks nobody emphasizes is values: by the time you leave school you have your own set, and the task is to "find something you're passionate about that you have a skill in that kind of maps into your values"
"don't deviate from them in pursuit of just short-term job" — coming out of school you take any good job you can get, but over time you iterate toward what you find valuable
What he would tell himself in 1981: "I didn't realize how difficult it would be to persuade people about this new way of thinking about investing" — he assumed that once the science was explained, people would flock to it
"people don't flock to new ideas just based on new research or new ideas, you have to soak the ground down around them, let them sink into it", and "I've been doing this for 55 years"
"So I guess if I'd known how hard it was, I don't know if I would have pursued it, but I think we're getting close" — he says the current phase, explaining it to people who are finally responding, is the exciting one
Ritholtz closes by thanking his production team, and notes that his video producer is leaving for a full-time job
Booth's bottom line is that the evidence was settled decades ago and the hard part was never the data: buy the whole market, decide only how much risk you can live with, and stay calm long enough for the compounding to do the work.
Products, Companies & Tools Mentioned
Dimensional Fund Advisors (Booth's firm, launched 1981 with a small-cap fund run out of his Brooklyn Heights spare bedroom, and now the largest active ETF issuer in the country by Ritholtz's count)
BlackRock and Barclays (The S&P 500 fund Booth watched being built at Wells Fargo changed hands, went to Barclays and became what he calls the cornerstone of BlackRock)
Wells Fargo (Mac McQuown's quantitative group, where Booth worked on the high-beta project while the trust department built the index fund)
Samsonite (The client behind the first index fund, which Booth says was pivotal in the history of finance)
S&P 500 and Standard & Poor's (Additions go in at tonight's closing price, which Booth says costs index funds about 4% against a fair price)
Vanguard (The other firm running an ETF and a mutual fund on the same holdings, which Booth says removes most of the ETF tax advantage)
Securities and Exchange Commission (Has approved merging Dimensional's mutual funds and ETFs into a single pool with two ways in)
University of Chicago and the CRSP database (Built around 1963 from 1926 data and handed to Fama, which is what made testable finance possible)
Black-Scholes option pricing model (Came out of the consulting work Black and Scholes did for Booth's group at Wells)
The Fama-French multifactor model (Published about ten years after Dimensional's small-cap fund launched, and the basis for the tilts the firm sells)
Long-Term Capital Management (The 1998 backdrop for the investment committee that asked why it should own stocks at all)
10-year Treasuries (Ritholtz's aside on a riskless return at 3.5% that barely keeps up with inflation)
Chicago Booth School of Business (Renamed after Booth's 2008 gift, which he says he made as payback rather than for the name)
University of Kansas Athletics (Recipient of last year's $300 million gift and of Naismith's original rules)
Museum of Modern Art (Where Booth has sat on the board about ten years and endowed the conservation lab he chairs the committee for)
Books & Resources Mentioned
Stay Calm, Learn to Embrace Uncertainty in Investing and Life – David Booth (The book this conversation is built around: uncertainty as the source of opportunity, plan rather than predict, control what you can)
1929 – Andrew Ross Sorkin (Just finished, and he found it very interesting)
Paris 1919 – Margaret MacMillan (His favorite read of the last couple of years, on the six chaotic months that redrew Central Europe and the Middle East)
Rolf Banz's PhD dissertation (The size-quintile study Fama pointed Booth toward, which found the smallest quintile of New York Stock Exchange stocks beat the rest by a wide margin)
The Morningstar, SPIVA and Dalbar studies (Ritholtz's evidence that fewer than half of professionals beat the index in a given year, net of fees)
A Wall Street Journal front-page article (Booth's source, read the day before, for professionals beating the market over the last 12 months)
Naismith's original rules of basketball (Two typewritten pages, bought at auction in 2010 and given to Kansas)
Ted Lasso (The new season, which Booth is working through — he points out the KU connection)
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