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Retrospectives: John Maynard Keynes, Investment Innovator

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  • David Chambers
  • Elroy Dimson

Abstract

John Maynard Keynes made a major contribution to the development of professional investment management. Based on detailed archival research at King's College, Cambridge, we describe Keynes' investment philosophy, his investment performance, and the evolution of his investment approach as the manager of a large educational endowment. His portfolios were actively managed and unconventional. He was an investment innovator both in making a substantial allocation to the then new institutional asset class of common stocks as well as in championing value investing.

Suggested Citation

  • David Chambers & Elroy Dimson, 2013. "Retrospectives: John Maynard Keynes, Investment Innovator," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 213-228, Summer.
    • Handle: RePEc:aea:jecper:v:27:y:2013:i:3:p:213-28
    DOI: 10.1257/jep.27.3.213
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    References listed on IDEAS

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    5. Phelim Boyle & Lorenzo Garlappi & Raman Uppal & Tan Wang, 2012. "Keynes Meets Markowitz: The Trade-Off Between Familiarity and Diversification," Management Science, INFORMS, vol. 58(2), pages 253-272, February.
    6. Martijn Cremers & Antti Petajisto, 2006. "How Active is Your Fund Manager? A New Measure That Predicts Performance," Yale School of Management Working Papers amz2370, Yale School of Management, revised 01 May 2009.
    7. Robert J. Shiller, 2003. "From Efficient Markets Theory to Behavioral Finance," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 83-104, Winter.
    8. Acharya, Shanta & Dimson, Elroy, 2007. "Endowment Asset Management: Investment Strategies in Oxford and Cambridge," OUP Catalogue, Oxford University Press, number 9780199210916, Decembrie.
    9. J. E. Woods, 2013. "On Keynes as an investor," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 37(2), pages 423-442.
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    Citations

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    Cited by:

    1. Carlo Cristiano & Maria Cristina Marcuzzo & Eleonora Sanfilippo, 2018. "Taming the great depression: Keynes’s personal investments in the US stock market, 1931–1939," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(1), pages 13-40, April.
    2. Marcuzzo, Maria Cristina & Sanfilippo, Eleonora, 2022. "Keynes's personal investments in the London Stock Exchange and his views on the transformation of the British economy," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 512-526.
    3. Chambers, David & Esteves, Rui, 2014. "The first global emerging markets investor: Foreign & Colonial Investment Trust 1880–1913," Explorations in Economic History, Elsevier, vol. 52(C), pages 1-21.
    4. David Chambers & Elroy Dimson & Christophe Spaenjers, 0. "Art as an Asset: Evidence from Keynes the Collector," The Review of Asset Pricing Studies, Society for Financial Studies, vol. 10(3), pages 490-520.
    5. Accominotti, Olivier & Chambers, David, 2016. "If You're So Smart: John Maynard Keynes and Currency Speculation in the Interwar Years," The Journal of Economic History, Cambridge University Press, vol. 76(2), pages 342-386, June.
    6. Lehmann-Hasemeyer, Sibylle H. & Neumayer, Andreas, 2018. "The persistence of ownership inequality. Investors on the German stock exchanges, 1869 – 1945," Working Papers 8, German Research Foundation's Priority Programme 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour", Humboldt University Berlin.
    7. David A Bogle & Christopher Coyle & John D Turner, 2022. "Capital market development over the long run: the portfolios of UK life assurers over two centuries [Corporate ownership and control in Victorian Britain]," European Review of Economic History, European Historical Economics Society, vol. 26(3), pages 370-398.
    8. David Chambers & Elroy Dimson & Justin Foo, 2013. "Keynes, King's, and Endowment Asset Management," NBER Chapters, in: How the Financial Crisis and Great Recession Affected Higher Education, pages 127-150, National Bureau of Economic Research, Inc.
    9. David Chambers & Rasheed Saleuddin, 2020. "Commodity option pricing efficiency before Black, Scholes, and Merton," Economic History Review, Economic History Society, vol. 73(2), pages 540-564, May.
    10. Pies, Ingo, 2013. "Theoretische Grundlagen demokratischer Wirtschafts- und Gesellschaftspolitik: Der Beitrag von John Maynard Keynes," Discussion Papers 2013-16, Martin Luther University of Halle-Wittenberg, Chair of Economic Ethics.
    11. Christian Hecker, 2021. "How Should Responsible Investors Behave? Keynes’s Distinction Between Entrepreneurship and Speculation Revisited," Journal of Business Ethics, Springer, vol. 171(3), pages 459-473, July.
    12. Lehmann-Hasemeyer, Sibylle H. & Neumayer, Andreas, 2018. "The persistence of ownership inequality: Investors on the German stock exchanges, 1869-1945," Hohenheim Discussion Papers in Business, Economics and Social Sciences 20-2018, University of Hohenheim, Faculty of Business, Economics and Social Sciences.

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    More about this item

    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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