I'm Chris Boebel.

As part of the MIT150 Infinite History project, we're talking

with Professor Andrew Lo.

Professor Lo is the Harris & Harris Group Professor of

Finance at the MIT Sloan School of Management and the

director of MIT's Laboratory for Financial Engineering.

His wide-ranging research interests include financial

asset pricing models, financial engineering and risk

management, trading technology, computer

algorithms and numerical methods, financial

visualization, hedge fund risk and return dynamics and risk

transparency, and evolutionary and neurobiological models of

individual risk preferences in financial markets.

His awards include-- to name just a few--

the Alfred P. Sloan Foundation Fellowship, the Paul A

Samuelson Award, a Guggenheim Fellowship, and multiple

awards for teaching excellence.

He is a former governor of the Boston Stock Exchange and

currently a research associate for the National Bureau of

Economic Research, a member of the NASD's Economic Advisory

Board, and founder and chief scientific officer of

Alphasimplex Group, LLC a quantitative investment

management company.

Professor Lo received a BA in economics from Yale University

in 1980 and a PhD in economics from Harvard in 1984.

Professor Lo, thanks very much for coming in

to talk to us today.

LO: Thanks for having me.

INTERVIEWER: So let's just start at the beginning.

Where were you born, and where did you grow up?

LO: I was born in Hong Kong.

And shortly after, I moved to Taiwan for about five years.

And then, when I was five years old, I came to the

United States.

And I grew up in New York City.

INTERVIEWER: Tell me a little bit about that transition from

a cultural perspective, that educational perspective.

LO: Well, it was a fantastic experience in many ways.

So I grew up in a single-parent

household in New York.

And my mother worked pretty hard to put the three of the

kids through school.

We went through public schools throughout, and the New York

City public school systems are among the best in the country.

Certainly, they were at the time, and so I feel I got a

great education, and met some really, really interesting

people during my time there.

INTERVIEWER: So you were an urban kid for most of your--

LO: I was.

We lived in Queens, and I commuted to the Bronx.

I went to the Bronx High School of Science.

I'm very proud of that.

I love that school, and I learned a great deal from my

classmates.

It was a lot of fun.

INTERVIEWER: So do you have very early

memories from Taiwan?

Or does your consciousness start in New York City?

LO: No, we have some memories.

I've got a number of things that I remember well from

those days: playing with fireworks was one of the

favorite activities in Taiwan, but for the most part, my

childhood was really in New York.

INTERVIEWER: So when did you start developing an interest

in economics, math?

I'm sort of interested in your entree to your field.

Were there early signs?

LO: Well, actually, starting in high school.

I had always been interested in science, of course.

In third grade, my third grade teacher, Mrs. Barbara

Ficalora, was wonderfully supportive, and made me the

class scientist.

And so I got an early introduction to doing

experiments.

It wasn't until high school that I became exposed to real

serious scientific reasoning, and also to the field of

economics through a course that I took in social studies,

where we read Heilbroner's Worldly Philosophers.

And that really changed my thinking about the idea that

you could apply interesting mathematical principles to

problems in economics.

INTERVIEWER: Bronx Science is obviously kind of a legendary

high school.

Can you talk a bit more about your experience there?

What were your career ambitions at that

point in your life?

And what kinds of things were you really

studying in high school?

LO: Well, for me, Bronx Science was a really

transformative experience, because, up until then, the

junior high school and elementary school that I went

to was really just local, kind of community schools, where

you had a wide mix of kids, some of whom are interested in

academics, but most of whom were probably not.

And so in that kind of environment, to be doing well

in school was to be a bit of an outcast.

It wasn't until I got to Bronx Science that it became cool to

actually do well in school and to be interested in academics.

So for me, it was really like an awakening.

I had tremendous friends and activities in Bronx Science

that I really couldn't have access to in any of the

schools that I went to before that.

Also, for me, it was a little bit of an interesting

experience in terms of the mathematics at Bronx Science.

Right around that time, Bronx Science instituted--

as all New York City high schools--

the so-called New Math.

And if you know the history of it, the New Math was an

absolute disaster from the perspective of the majority of

the students.

But for me, it was actually transformative as well,

because up until then, I had a particular learning issue, a

slight case of dyslexia that we didn't know

until much later on.

And so for the longest time, I had difficulty with

mathematical concepts, multiplication, and really

basic things that other kids had no issues with.

I had a hard time memorizing the multiplication table.

It wasn't until I got to Bronx Science that, because of the

curriculum in mathematics--

it was transformed from the basic algebra, geometry,

trigonometry to sets, rings, fields, abstract algebra--

that I turned from a C student to an A student in math, so

for me, that was really an important experience.

INTERVIEWER: That's kind of an amazing story.

LO: I was one of the lucky ones that benefited from the

unfortunate aspects of the New Math that was perpetrated on

New York City high school students.

INTERVIEWER: At least there was one.

So you mentioned your third grade teacher.

Were there other mentors, significant teachers,

experiences you had in high school or before that time

that really pushed you in a certain direction?

LO: Oh, a number.

One of the things that has always struck me is how

important teaching is, because a good teacher can have such a

positive influence on a student for the rest

of his or her life.

And similarly, a bad teacher can have tremendous negative

consequences for that student.

And so I've been very fortunate in that, during the

years, I've had some good teachers, many good teachers,

a few bad ones.

So I have a good understanding of what's involved.

And my third grade teacher, Mrs. Ficalora, stands out.

In high school, I had a number of teachers.

Bronx Science is filled with really extraordinary faculty.

In fact, we don't think of them as teachers.

We think of them as faculty.

Mrs. Mazen, my calculus teacher.

I learned more from her about calculus than I think most

college courses would teach their students.

So there are a number of very talented instructors that I

was very pleased and lucky to have.

INTERVIEWER: What were your career aspirations at that

point, just before college?

LO: Well in high school, I think that most of my friends

and I were interested in science and math.

So at the time, my presumption was that I would go into one

of those disciplines.

Being the youngest of three children, and having an older

brother and sister that were also academically inclined

made it relatively easy for me.

My brother is a mathematician at the Jet

Propulsion Lab at Caltech.

And my sister is a biologist at the University of

Pittsburgh.

So they both followed very academic careers.

And in my household, one had to get a PhD just to measure

up to the older siblings.

So from high school on, I was very much interested in

following some kind of a career path in academia,

although my interests were somewhat on the more applied

side, as opposed to purely theoretical kinds of issues.

INTERVIEWER: You mentioned a single-parent household.

Was your mother at all academically inclined?

Was it your mother that you were--

LO: Yeah, my mother was very much academically inclined,

from the perspective of what she valued.

She felt that the life of a scholar was among the most

important and prestigious.

She was a lawyer by training.

But she had--

as most, I think, Chinese families did-- a deep and

abiding respect for academic achievements.

And so it was pretty clear, from the kinds of things that

she talked about and the values that she held, that

developing new knowledge was really important to her and

ultimately to all of the children.

INTERVIEWER: So at that point in high school when you had to

really start seriously thinking

about the next steps--

going to college, what you might study--

tell me about that decision process.

You ultimately went to Yale.

And then talk a bit about your experience there.

LO: Well, I was a little confused about

what I wanted to do.

My sister went to MIT as an undergraduate.

My brother went to Caltech.

And so when I talked with my mother about where I ought to

go for college, she said, well, maybe you ought to think

a little bit more broadly about the kind of things that

you're interested in.

And so rather than pursuing a somewhat more technical career

path, I thought that maybe applying to a general liberal

arts college would be a good idea.

And I was thinking at that time that I might want to do a

combination of mathematics and biology.

I did a science project as a senior.

I was a Westinghouse Finalist.

Intel, I guess, now is what they call it.

And I was very much steeped in molecular biology at the time.

And so Yale seemed to have a good compromise in very strong

humanities, but also very good science programs.

So I ultimately decided that that would be, really, the

best compromise.

I visited the school, and I was really

enthralled with the campus.

New Haven wasn't so great.

But Yale, itself, was a wonderful

physical space for students.

And so it was a pretty easy decision, after I had gone

through and looked at all the various different

possibilities.

INTERVIEWER: You mentioned the Westinghouse Competition.

It's amazing how many of our interviewees have a story

about Westinghouse and participating in that.

LO: Well, it's a wonderful activity, and obviously not

for everybody, but at Bronx Science, most of the students

that I interacted with really got into it.

And we learned so much from it.

I still remember, to this day, every aspect of the

experiments that I conducted on the infective pathway of

bacteriophage T4.

And I actually corresponded with an MIT faculty, who, at

the time, I didn't know.

But Jonathan King actually had some strains of bacteriophage

that I was interested in and was very generous in sharing

it with me.

So it was a wonderful experience in getting me to

understand how research is conducted, and, really, what

the academic style of interactions might be.

INTERVIEWER: So you chose Yale.

You decided that that was the place for you.

Tell me a little bit about your time there, how your

academic and career interests developed, and just sort of