conversations A Fireside Chat with Eugene F. Fama and David Booth Eugene F. Fama arrived at the then–Graduate School of Business by pure “serendipity,” as he puts it. A college senior on the cusp of graduation, the man who would go on to become the father of the efficient-market hypothesis discovered his application to Chicago’s PhD Program had never been received. Thankfully for the school—and for the history of finance—it was quickly rectified, and he’s been here ever since. That includes a special day in 2013, when he still showed up to teach on the morning he won the Nobel Prize in Economic Sciences. “I had never missed a class in all the years I’d been teaching,” said Fama, MBA ’63, PhD ’64, and the Robert R. McCormick Distinguished Service Professor of Finance. “I wasn’t going to start now.” He first crossed paths with David Booth, ’71, in the classroom, and Fama called him his “best student” at the time. It was Booth who took his mentor’s ideas—that stock prices reflect all relevant information, so beating the market consistently is nearly impossible—and applied them in the real world. In 1981 Booth and another alumnus, Rex Sinquefield, ’72, founded Dimensional Fund Advisors, which now manages $579 billion, mainly for institutions and individuals who invest through financial advisers. After he and Sinquefield started Dimensional, they put Fama on its management board and faculty members Merton Miller and Myron Scholes, MBA ’64, PhD ’69, on its mutual fund board, and all three men would go on to win Nobel Prizes. In 2008 David Booth gave a gift to the school valued at the time at $300 million, and the Graduate School of Business was renamed after him. “I wouldn’t have been anywhere without Chicago,” said Booth.