Myron Scholes : An Oral History
Abstract/Contents
- Abstract
- Myron Scholes, the Frank E. Buck Professor of Finance, Emeritus at the Stanford Graduate School of Business, shares memories of his upbringing, education, and research career, reflecting on the importance of prices, constraints, option pricing technology, risk management, and more. Scholes speaks about his childhood in Timmins, Ontario, Canada, his family’s department store business, and how learning to program computers at the University of Chicago shaped his future career in finance and economics. Scholes highlights colleagues who inspired his work, including Merton Miller, Eugene Fama, Milton Friedman, and George Stigler. He discusses his dissertation research on security prices at the University of Chicago, his early academic positions at MIT and Chicago, and meeting Fischer Black, with whom he developed the Black-Scholes options pricing model. He recalls the circumstances that led him to join the Stanford faculty and speaks about his work with Mark Wolfson on the impact of taxes on business behavior, the impact of winning the Nobel Prize, and his involvement with the Long-Term Capital Management.
Description
| Type of resource | moving image, sound recording-nonmusical, text |
|---|---|
| Extent | 2 video files; 2 audio files; 1 text file |
| Place | Stanford (Calif.) |
| Publisher | Stanford Historical Society |
| Date created | June 29, 2020 - 2020-07-02 |
| Language | English |
| Digital origin | born digital |
Creators/Contributors
| Interviewee | Scholes, Myron S. | |
|---|---|---|
| Creator | Scholes, Myron S. | |
| Interviewer | Marine-Street, Natalie J. | |
| Publisher | Stanford Historical Society |
Subjects
| Subject | Scholes, Myron S. |
|---|---|
| Subject | Stanford University. Graduate School of Business |
| Subject | Black-Scholes options pricing model |
| Subject | Nobel Prize winners |
| Genre | Interview |
Bibliographic information
| Biographical Profile | Myron Scholes is the Frank E. Buck Professor of Finance, Emeritus, at the Stanford Graduate School of Business, Nobel Laureate in Economic Sciences, and co-originator of the Black-Scholes options pricing model. Scholes was awarded the Nobel Prize in 1997 for his new method of determining the value of derivatives. Scholes is currently the Chairman of the Board of Economic Advisers of Stamos Partners. Previously he served as the Chairman of Platinum Grove Asset Management and on the Dimensional Fund Advisors Board of Directors, American Century Mutual Fund Board of Directors, and the Cutwater Advisory Board. He was a principal and Limited Partner at Long-Term Capital Management, L.P. and a Managing Director at Salomon Brothers. Other positions Scholes held include the Edward Eagle Brown Professor of Finance at the University of Chicago, Senior Research Fellow at the Hoover Institution, Director of the Center for Research in Security Prices, and Professor of Finance at MIT’s Sloan School of Management. Scholes earned his PhD at the University of Chicago. |
|---|---|
| Summary Part 1 | [00:00:00-00:36:41] Growing up in Timmins, Ontario, Canada • Family department store, Bucovetsky’s • Mother’s involvement in family business • Childhood interests • Developing keratoconus • Family expectations • McMaster University; publishing business with uncle • Business school at University of Chicago; job programming computers for faculty [00:36:41-01:06:59] Interest in modeling uncertainty • Importance of prices • Experiences with Milton Friedman and George Stigler • Political and economic situation in 1960s and 1970s • Merton Miller; excitement around bringing science to the study of uncertainty in finance and economics • Thoughts on insurance, risk management, and diversification [01:06:59-01:56:22] PhD dissertation re information and agency problem in share sales • Gathering time series data • Decision to go into academia, first professorship at MIT • Working on passive investment / index funds for Wells Fargo • Interest in option pricing • Combining forces with Fischer Black • Black-Scholes Model as a technology • Impact of the Black-Scholes model; ubiquity of options |
| Summary Part 2 | [00:00:00-00:33:35] Moving from MIT to University of Chicago • Center for Research in Security Prices Historical Data series • Chicago Board Options Exchange; models versus intuition • Testing the capital asset pricing model; research on constraints that defined the risk return tradeoff in the market • Decision to join Stanford faculty; joint appointments [00:33:35-01:07:15] Comparing MIT, University of Chicago, and Stanford • Change and innovation at Stanford Graduate School of Business • Research with Mark Wolfson on how taxes affect business behavior • Research on the impact of benchmarks on investment performance • Thoughts on compound return and measuring risk; enthusiasm for using option markets to evaluate market risk [01:07:15-01:49:35] Reflections on the 2020 political situation, the COVID-19 pandemic, and constraints • What he visualizes when he thinks about the economy: prices, trust, and uncertainty; the fallacies of data analysis • Receiving the Nobel Prize and its impact • Long-Term Capital Management • Lomo Prieta earthquake; growth of Stanford’s campus • Philanthropy • Daughters and grandchildren |
| Transcript |
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| Finding Aid | |
| Location | https://purl.stanford.edu/qw719tg7029 |
| Location | SC0932 |
| Repository | Stanford University. Libraries. Department of Special Collections and University Archives |
Access conditions
- Use and reproduction
- The materials are open for research use and may be used freely for non-commercial purposes with an attribution. For commercial permission requests, please contact the Stanford University Archives (universityarchives@stanford.edu).
- Copyright
- Copyright © The Board of Trustees of the Leland Stanford Junior University. All rights reserved.
Collection
Stanford Historical Society Oral History Program interviews, 1999-2022
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