Robert Haugen
Encyclopedia
Robert Arthur Haugen (born June 26, 1942, in Chicago
, Illinois
) is a renowned professor of theoretical finance. He is currently retired from academics and is the president of Haugen Custom Financial Systems.
Haugen obtained his B.S. degree from the business school at the University of Illinois at Urbana-Champaign
. Haugen proceeded to obtain an M.S. and then a PhD in finance at the University of Illinois at Urbana-Champaign
.
. While at the University of Wisconsin–Madison, he published a paper in real estate discrimination
that became widely used in the academic world. He also became involved in the Finance Society. Haugen's first major book, coauthored by two colleagues, Amir Barnea and Lemma Senbet, was Agency Problems and Financial Contracting published in 1984. In this book he explained how personal compensation issues affected financial deals.
Haugen went on to accept a new position at the University of Illinois at Urbana-Champaign
. While there, he was working on two books. He was also working on another short book with his co-author Josef Lakonishok, about the "January effect
" in the stock market
. Research seemed to show that, on average, all of a portfolio
’s abnormal return (that is, returns in excess of that predicted under an equilibrium pricing model, like the CAPM) was made in January, especially during the first two weeks of the month.
He went on to a new position at the University of California at Riverside, but soon left and joined the University of California at Irvine. Haugen continued on his research, and his relationship with NISA (National Investment Services of America). He also lectured internationally on Modern Finance, including the Amsterdam Institute of Finance
, where he taught for 10 years. Haugen served on the Board of Directors for a variety of concerns.
He published the first academic article documenting the nature and power of the expected return factor model in The Journal of Financial Economics in 1996. He explains the model in his text The Inefficient Stock Market—What Pays Off and Why. Using a computerized application of his model, he created Haugen Custom Financial Systems, a company that provides institutional clients with expected returns for 8000 stocks worldwide. Over 80 billion dollars are managed using his quantitative methodology.
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
, Illinois
Illinois
Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...
) is a renowned professor of theoretical finance. He is currently retired from academics and is the president of Haugen Custom Financial Systems.
Haugen obtained his B.S. degree from the business school at the University of Illinois at Urbana-Champaign
University of Illinois at Urbana-Champaign
The University of Illinois at Urbana–Champaign is a large public research-intensive university in the state of Illinois, United States. It is the flagship campus of the University of Illinois system...
. Haugen proceeded to obtain an M.S. and then a PhD in finance at the University of Illinois at Urbana-Champaign
University of Illinois at Urbana-Champaign
The University of Illinois at Urbana–Champaign is a large public research-intensive university in the state of Illinois, United States. It is the flagship campus of the University of Illinois system...
.
Career
After graduating, Haugen accepted an offer as a professor at University of Wisconsin–MadisonUniversity of Wisconsin–Madison
The University of Wisconsin–Madison is a public research university located in Madison, Wisconsin, United States. Founded in 1848, UW–Madison is the flagship campus of the University of Wisconsin System. It became a land-grant institution in 1866...
. While at the University of Wisconsin–Madison, he published a paper in real estate discrimination
Redlining
Redlining is the practice of denying, or increasing the cost of services such as banking, insurance, access to jobs, access to health care, or even supermarkets to residents in certain, often racially determined, areas. The term "redlining" was coined in the late 1960s by John McKnight, a...
that became widely used in the academic world. He also became involved in the Finance Society. Haugen's first major book, coauthored by two colleagues, Amir Barnea and Lemma Senbet, was Agency Problems and Financial Contracting published in 1984. In this book he explained how personal compensation issues affected financial deals.
Haugen went on to accept a new position at the University of Illinois at Urbana-Champaign
University of Illinois at Urbana-Champaign
The University of Illinois at Urbana–Champaign is a large public research-intensive university in the state of Illinois, United States. It is the flagship campus of the University of Illinois system...
. While there, he was working on two books. He was also working on another short book with his co-author Josef Lakonishok, about the "January effect
January effect
The January effect is a calendar-related anomaly in the financial market where financial security prices increase in the month of January. This creates an opportunity for investors to buy stock for lower prices before January and sell them after their value increases.Therefore, the main...
" in the stock market
Stock market
A stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market was estimated at about $36.6 trillion...
. Research seemed to show that, on average, all of a portfolio
Portfolio (finance)
Portfolio is a financial term denoting a collection of investments held by an investment company, hedge fund, financial institution or individual.-Definition:The term portfolio refers to any collection of financial assets such as stocks, bonds and cash...
’s abnormal return (that is, returns in excess of that predicted under an equilibrium pricing model, like the CAPM) was made in January, especially during the first two weeks of the month.
He went on to a new position at the University of California at Riverside, but soon left and joined the University of California at Irvine. Haugen continued on his research, and his relationship with NISA (National Investment Services of America). He also lectured internationally on Modern Finance, including the Amsterdam Institute of Finance
Amsterdam Institute of Finance
The Amsterdam Institute of Finance, or AIF, is a financial training and education institute in the Netherlands with a focus on global programs. The AIF, which operates as a non-profit foundation, was founded in 1990 as a joint venture between government officials and the Dutch financial...
, where he taught for 10 years. Haugen served on the Board of Directors for a variety of concerns.
He published the first academic article documenting the nature and power of the expected return factor model in The Journal of Financial Economics in 1996. He explains the model in his text The Inefficient Stock Market—What Pays Off and Why. Using a computerized application of his model, he created Haugen Custom Financial Systems, a company that provides institutional clients with expected returns for 8000 stocks worldwide. Over 80 billion dollars are managed using his quantitative methodology.
Selected publications
- Agency Problems and Financial Contracting
- The New Finance
- Modern Investment Theory (1st edition), 1984
- The Incredible January Effect: The Stock Market's Unsolved Mystery (co-authored with Josef Lakonoshuk), 1992
- Beast on Wall Street, 1998
- The Inefficient Stock Market—What Pays Off and Why,1999, Prentice Hall, ISBN 0-13-917164-9
- The New Finance: Overreaction, Complexity and Uniqueness (3rd Edition), 2003