Dimensional Stories: Empirical Work
DFA founder David Booth likes to say, “it’s about ideas,” and we certainly don’t know of another fund company that has been more about ideas than Dimensional Fund Advisors. And not just any ideas, but the best thinking coming out of academic research in the science of economics. As a consequence of that focus, the company has, from the beginning, filled its board of directors and advisory committees with top thinkers in the field. We don’t know of another fund company that has recruited so many Nobel Laureates, including such luminaries as Eugene Fama, Myron Scholes, Merton Miller, and Robert Merton.
As Dimensional embarks on its 25th year of working with financial advisors, they shared with us a series of Dimensional Stories, two minute videos featuring Nobel Laureate Eugene Fama and/or David Booth speaking on the themes and insights that influence Dimensional’s way of investing. Over the next few months, we will be sharing these Dimensional Stories videos as we feel they give insights into the thinking of an important strategic partner, one which adds enormously to our clients’ investment success.
The first of this series, Empirical Work, features Professor Fama describing the intellectual satisfaction of conducting empirical research and how ground-breaking concepts usually do not begin as “big ideas”. He says:
“The way it works is, you start with a little idea, and it just keeps growing. If you’re pretty good at it, you just keep expanding it around the edges, and it evolves into a—maybe a big idea eventually.”