William Sharpe ’55, M.A. ’56, Ph.D. ’61

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Only rarely does the Alumni Association present an Award of Distinction. This award is reserved for individuals whose work is carved for them a lasting place in history. William F. Sharpe is among these rare people.

Bill Sharpe shared the Nobel Prize in Economic Sciences last fall for his profoundly original work in the area of finance. Sharpe and co-recipient Harry F. Markowitz discovered basic investment strategies that have been adopted by virtually every money manager and large investor in the world. Their combined work helped spur the success and popularity of mutual funds, which have become widely accepted investment tools.

Markowitz developed his Portfolio Theory in the 1950s. Building upon Markowitz’s foundations, Sharpe created the Capital Asset Pricing Model during the 1960s. Together, these theories show investors how to diversify their stock holdings, enabling them to minimize risks while maintaining high returns.

Sharpe earned his bachelor’s, master’s and Ph.D. degrees in economics at UCLA, going on to launch a brilliant career at the University of Washington. In 1970, Sharpe accepted a post at Stanford’s Graduate School of Business, where he was later named Timken Professor of Finance. In addition to his top-flight research, Sharpe’s classes were always popular, and he became known for the intellectual excitement he conveyed to students. He retired from Stanford in 1989 as Timken Professor Emeritus, and currently serves as chairman of William F. Sharpe Associates, Los Altos, California.

Sharpe’s extraordinary creative vision has enabled him to make far-reaching contributions to the world of finance – contributions that have revolutionized the way in which investment funds are handled. The world can never be the same in the wake of his ideas, and for this, Bill Sharpe has earned the deep admiration of colleague and financier alike.