In my last blog, I focused on David G. Booth, one of the founding partners of Dimensional Funds. Today I will focus on his partner, Mr. Rex Andrew Sinquefield and his early years.
When I started writing these blogs, it seemed to me from my preliminary research that so much of whom DFA is and what makes them so special stems from the unique backgrounds of each of the founding partners. I have been especially intrigued with Mr. Sinquefield.
To me, Mr. Sinquefield embodies the true American dream. He has a real life rags to riches story that continues to unfold. I am amazed at how he overcame the obstacles of his childhood and used these experiences for the good. His could not have been the easiest of childhoods. Rex was born in St. Louis, Missouri in 1945. At the age of 5, his father died. His mother fell into difficult financial times and as result, from the age of 8-14, Rex and his brother Jerry went to live at St. Vincent Home for Children in St. Louis, Missouri. Rex is quoted as saying that the orphanage was “a good family, a big extended family. It was a regimented orphanage. There, I developed a sense of responsibility and a work ethic.” To this day, Mr. Sinquefield remains an active supporter of St. Vincent where he serves on the Board of Trustees. It is quoted that the most admirable character about him is that “he never forgot his roots and has compassion for the orphans that St. Vincent serves today.” It goes further to declare: “How many wealthy people in this modern world will go back to serve honorably the orphanage where they grew? He has the worldly possessions but is full of compassion. He shares his wealth with the indigent and the needy.”
After leaving St. Vincent, Rex was reunited with his mother and older sisters. He remained in St. Louis where he graduated from Bishop DuBourg High School in 1962. In 1964, he enrolled in seminary, but left feeling that he “wasn’t settled yet” and ended up attending St. Louis University where he graduated in 1967 with a B.S. in Business. Rex was also drafted and sent to Fort Riley, Kansas for two years. Rex ultimately “landed in a place where his life’s profession was found” by attending the University of Chicago. He is quoted as saying, “I went to the University of Chicago for an MBA. There, I got my first heavy duty exposure to the notions of efficient markets, the notion capital markets really do work well. They’re informationally efficient. That influenced quickly what I wanted to do.” During his time at the University of Chicago, Rex studied and researched historical stock market returns and the emergent new academic field of index funds. “These theories have influenced the way investing has operated ever since”, Rex noted. He goes further to say: “I was in a fortunate position to start and operate the world’s first S&P index fund. That was an idea I had in business school. I wasn’t the only one who had that idea. For those of us who were hard core students of financial economics at the time-this is 1970-72-the idea of building a market portfolio was probably a very good strategy, but was nonexistent in the real world. It was quite a challenge to persuade those on the outside that this model made a lot of sense. It was a battle of ideas.”
Wow…am I really understanding this correctly? Rex Sinquefield was the first one to start and operate the world’s first S&P index fund?!! Well, since the purpose of this series of blogs is to understand why Dimensional Funds is different, I would list this one as a big difference. Their insight, creativity, and financial trend setting are some of the many things that separate them from other funds.
In my next blog, I will continue with Rex’s story and focus on the creation of Dimensional Fund Advisors and his time there.
- Sharon Kinter, Associate Financial Planner and Budget Coach, 09-July-2011