AUSTIN, Texas — For research that altered the face of investing, Sheridan Titman, UT Austin McCombs School of Business professor and chair of finance, has received the Wharton-Jacobs Levy Prize for Quantitative Financial Innovation.
The award recognizes the impact of a 1993 Journal of Finance study on momentum investing by Titman and Narasimhan Jegadeesh, chair of finance at the Goizueta Business School at Emory University, “Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency.”
The paper marked a shift in investment thought, showing that strategies of buying recent stock winners and selling recent losers led to significant positive returns.
“Their work on momentum investing is as creative as it is rigorous,” said Erika James, dean of the Wharton School. “We honor them for improving our understanding of complex financial phenomena.”
The Jacobs Levy Equity Management Center for Quantitative Financial Research presents the award biennially for quantitative research that has contributed to a particular innovation in the practice of finance.
Titman holds the Walter W. McAllister Centennial Distinguished University Chair in Financial Services at the McCombs School.
“I’m so pleased but not at all surprised that Sheridan has garnered one of the finance discipline’s most prestigious awards,” said Lillian Mills, dean of the McCombs School. “He’s an incredibly prolific researcher whose impact to the field of finance is matched only by his impact on our students.”
The findings in Titman’s award-winning paper have been confirmed by many studies, some looking as far back as the 19th century. The research also led fund managers to adopt new strategies.
“Their work challenged the expanding view of the superiority of passive investment strategies and had an enormous impact on the world of investing,” said Craig MacKinlay, Wharton professor of finance and co-academic director of the Jacobs Levy Center.
The Wharton-Jacobs Levy Prize is endowed with a $2 million gift from the Wharton alumni principals and co-founders of Jacobs Levy Equity Management.