One of the great coincidences in finance: In 1952 Harry Markowitz published "Portfolio Selection." It became the foundation of modern asset management. The idea is that you optimize a diversified basket of assets along an efficient frontier by claiming to know what the currently “efficient” part of the frontier is (even though no one actually knows which assets will perform most efficiently in the future). That same year a British actuary named Frank Redington published "Review of the Principles of Life-Office Valuations." It showed how institutions could immunize their liabilities by matching them with assets across time. It became the foundation of institutional asset-liability matching. Almost nobody outside of insurance and banking knows it. The interesting thing is institutions adopted Redington because matching assets to liabilities is just the sensible way to manage cash flows. Meanwhile the industry sold Markowitz to retail investors….