Perspectives

Finding Inspiration in a 50-Year Friendship

By Dave Butler, Co-Chief Executive Officer

Sep 27, 2019

2 Minute Read

For 50 years, Dimensional Founder David Booth and Nobel laureate Gene Fama have been changing how people think about investing. Co-CEO Dave Butler reflects on their remarkable friendship and the positive impact they’ve had on people’s lives.

First day of Fama's class, Gene says, "This is gonna be the most practical course "you'll ever take." And it turned out to be that way for me. I've had lots of students go out and start investment businesses, and none of them ever asked me to participate. David says, "Well do you wanna be involved in this? "We'd like to use the stuff that you've worked on." So that was a bit unusual. It worked out, though. David was a PhD student, and every year I take the best PhD students and I use them as my research assistants the following year. And he was very good at it. And then it came time to write a thesis, and he said, "Well, I see what you do. "Think it's great, but I don't wanna do it. "I wanna go out and work." I was at the University of Chicago, and my second year I worked for Fama, which was a great experience. It was great for all kinds of reasons. Great 'cause Gene is such a great person in addition to being one of the true giants in the field. And it was also great 'cause I realized that that wasn't what I wanted to do. I called Mac McQuown, who has been involved with Dimensional from the first day, just like I have. I told Mac, "I have this really smart student "who is well on his way to a PhD, "but he wants a real job now." He said, "Good, I'll hire him." Mac and David and I have been friends ever since. When you start a business, one of the first things you worry about is was there research out there that we didn't know about. Could be used against us. So my first phone call was to Gene Fama, and I called him up and said, "Look, here's what we wanna do." And we invited him to be a founding shareholder of the firm and on the board of directors. It's a lot of fun. There's no tension if you're working with a company that accepts your basic philosophy and your ideas. I mean, they wanna put in practice the stuff that you develop or developed in the past. Great, let's do it. Lots of people try to do that. I mean, I have former students doing it. You're different from them, and you pay me for it, so. That's the big difference in my opinion. You may have learned a lot from me about finance, but I've learned everything I know about business from you, so I think that interchange has been very fruitful on both sides. There was a lot of things going on, working with Fama. I mentioned how much help he gave me, but I think it's also just really helped me grow up. Here's this person that turns out to be really what I think as a hero. Above and beyond everything, he's been a lifetime friend of mine. He's one of the nicest human beings I know.

When David Booth first stepped into Gene Fama’s class at the University of Chicago, he expected to one day join him as an academic. That was David’s plan. On the first day of class, Professor Fama promised the students it would be the most practical course they ever took. Indeed, Gene’s course started David along the path to launching a firm that would pioneer the application of modern finance. It was also the start of a lifelong friendship and collaboration.

David and Gene would go on to achieve remarkable success. Gene would be recognized as a Nobel laureate in economic sciences. David would emerge as a leading businessman and philanthropist. Along the way, they have helped show the world what’s possible when people adopt a different way of thinking about capital markets and investing.

When I joined Dimensional 25 years ago, I made a commitment to learn through observation. Of the many colleagues and clients I have had the privilege of working with, David and Gene stand out in a number of ways. They have had a profound impact on how I go about my work and live my life.

From working alongside them, I’ve observed three keys to building positive, enduring relationships that can help people, teams, and organizations achieve more:;

1. Be willing to disrupt.

From day one, David and Gene have focused on the pursuit of truth, always looking to better understand capital markets and offer candid perspective on what is known and unknown. Their sole focus has been improving outcomes for investors—even when that has meant disrupting the status quo.

2. Be modest.

As an athlete, I was always impressed by the coaches, teammates, and opponents who led by example. No matter how much they had achieved, you never heard them talk about it. Their goal, each and every day, was to get better than the day before.

Dimensional’s culture starts with the example David and Gene have set. They’re not driven by ego. They’re driven by making a difference. Their competitiveness, grit, and focus have been beneficial to the industry, to our clients, and to our employees.

3. Love what you do.

David and Gene have never been content to rest on their laurels. In the 25 years I’ve worked with them, I don’t recall them ever having a bad day. They love their work. They love the people they work with. And they love the daily discipline of improving their craft.

Fifty years into it, their friendship is helping people around the world have a better investment experience. And this friendship continues to be a source of inspiration. We all want to be part of something bigger. We all want to be part of a worthy cause. And we all want to have great friendships that inspire us to be better.

Disclosures

Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

All expressions of opinion are subject to change. This article is distributed for informational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services.

Eugene Fama is a member of the Board of Directors of the general partner of, and provides consulting services to, Dimensional Fund Advisors LP.