S8 , Wednesday, July 28, 2010 ......

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MYRON J. GORDON, 89 8 PROFESSOR OF FINANCE MAURY CHAYKIN, 61 U of T prof’s stock-market formula grew into important tool for investors Hatched at MIT in 1959, the Gordon Equation now used as a model for sophisticated computerized variations

BY FRANK EDWARDS

yron J. Gordon – known as Mike to most of his Mfamily and colleagues – was a professor of finance who created a simple formula to calculate the fair value of a stock in 1959. Maury Chaykin in a scene from Einstein had E=MC2. the HBO series Entourage. Gordon had P=D/(k-g) CLAUDETTE BARIUS/HBO/AP (Price P equals dividend val- ue D divided by (expected re- CANADIAN ACTOR’S CAREER turn k minus growth g.) SPANNED 35 YEARS For a Harvard-trained econo- Maury Chaykin, one of Canada’s mist, it was an interesting most versatile and beloved char- mathematical exercise that al- acter actors, has died at 61 in lowed investors to incorporate the value of future dividends . and growth rates into invest- Chaykin was most recently ment decisions. But it is un- seen in the hit TV comedy Less likely that Gordon was aware Than Kind. that his formula would build Film director Atom Egoyan, in an important bridge between five of whose films Chaykin ap- the real world of business and peared, said he was “devastat- the theoretical world of aca- deme. ed” by the news of his passing. While its usefulness was “He was an incredible privilege readily apparent to stock bro- to work with – so full of possi- kers, the Gordon Growth Mo- bilities, anger, range, humour, del also proved to Wall Street life, contradiction.” that there was practical re- Indeed, what often made search to be mined in the ivory Chaykin’s acting so interesting towers of university business schools. Today, half a century to watch was a sense of unpre- later, sophisticated computer- dictability about how his char- ized variations of the model acter would respond in any drive pricing decisions in the situation. He always seemed to world’s capital markets and be able to find a novel twist – can also be used to interpret with a look, or body language what prevailing stock prices suggest about the direction of or a line reading. the economy. Born in , N.Y., to an Financial historian and Ohio American father and Canadian University professor emeritus mother, Chaykin studied drama Stephen Buser marvels at the in and Buffalo and simple genius of the formula. moved to Toronto in the “Right now we take it for mid-1970s. His résumé references granted. We say, ‘Sure that’s nothing.’ But at the time it was more than 150 roles in film and a big deal ... a very impressive television, testimony to his abili- and convenient tool that sum- ty to create memorable, idiosyn- marized a very important is- cratic characters even in the sue and made it accessible to a smallest of parts. lot of people. It was a pretty Among his more memorable easy formula in a world before creations were detective Nero hand-held computers.” While others might have Wolfe in the TV series of the coasted along on the adulation same name; the mad Major of the business world, Gordon Farnbrough in Kevin Costner’s continued to follow his restless Myron Gordon, seen in 1964, provided a bridge between the worlds of business and academe. Dances With Wolves; the rock curiosity wherever it led, help- musician Desmond Howl in ing to build the foundation of all corporations worth $1-mil- Whale Music, for which he won University of Toronto’s Rot- lion to file public financial a Genie award; and as union man School of Management " statements. He spoke out along the way. He was as much a social against foreign ownership, boss Hal Banks in the TV film He became expert in valuing complaining that pharmaceut- Canada’s Sweetheart: The Saga communication and power theorist and a social ical branch plants did little of Hal C. Banks. utilities and, as a consumer ad- activist as he was a more than marketing and lob- More recently, Chaykin ap- vocate, fought hard against the bying. finance specialist. peared in the hit HBO series En- privatization of electrical util- When the Conservative gov- tourage as Harvey Weingard, a ities. He set up academic ex- Abraham Rotstein ernment in tried to change programs with Chinese sell Hydro One in Canada’s character based on film mogul universities for the Canadian largest public share offering, ; and as Sam International Development Gordon joined forces with the Blecher, a driving instructor in Agency and followed the eco- “His office was filled with Canadian Union of Public Em- Mark McKinney’s Less Than nomic development of China neatly stacked papers and he ployees as a strategist to prove Kind. with keen interest, offering ad- would take my work and add it that the sale would be disas- Chaykin leaves his wife, ac- vice and guidance to his coun- to a pile, promising to get to it trous. In 2002, a lower court tress Susannah Hoffmann, and terparts there. soon. And an hour and a half blocked the IPO and by the “He was as much a social the- later when I got home to Ham- time it was overruled, the gov- their daughter, Rose. orist and a social activist as he ilton, he would be on the ernment had changed its A full obituary will follow. was a finance specialist,” says phone ready to discuss the mind. 66 Michael Posner his long-time friend Abraham problem. He took a real inter- It was a long fight but Gor- Rotstein, emeritus professor of est in his PhD students.” don never missed an opportu- economics and political sci- Gordon at the University of Toronto in 1982. Academically famous, Gor- nity to make his argument. I REMEMBER 8 GEORGE ence at U of T. “You don’t don was soft spoken, modest In the 1990s, he and energy STEINBRENNER usually get people proficient at ding date by two days so Gor- ment, which had just started a and insatiably curious, with in- consultant John Wilson hap- analyzing finance taking much don went AWOL in the middle doctoral program. One of his terests far beyond finance. pened upon a Law Society fo- John Uren of Powell River, B.C., interest in broader social is- of the week to marry her. new colleagues was Paul Hal- Says Halpern: “He was pub- rum on the privatization of remembers George Steinbrenner, sues. But he was always inter- After his military discharge pern, now a professor emeri- lishing in a lot of different Hydro One. When they real- who died on July 13. ested in where societies were in 1946, he pursued a doctorate tus at Rotman. areas and that was unusual. ... ized that no one was speaking ...... going...” at Harvard University while “He was a big name, a well- He was an excellent co-author. against the plan, Wilson sug- Being a long-time Boston Red Myron Jules Gordon, econo- teaching in Pittsburgh at what known person international- When I was young and inno- gested they voice their oppos- mist, financial theorist and is now Carnegie Mellon Uni- ly,” he recalls. “He was a very cent, he would tell me, ‘There’s ition during the question and Sox fan, I wasn’t a big fan of consumer activist, died on July versity. He later taught at Mas- interesting man with strong too much math! Nah, you answer session. But Gordon the Yankees or Mr. Steinbrenner. 5 in Summit, N.J., at the age of sachusetts Institute of opinions and great intuition. don’t need that stuff.’ ” took another tack. But also as a thoroughbred 89 after several years of ill Technology for 10 years, which Most financial professors were At home, David Gordon says “Myron wasn’t on the agen- horse racing fan I was aware of health and a series of strokes. was where he developed his on the right of the political his father was “just a regular da. They hadn’t bothered to his successful Kinsmen Stable He was born on Oct. 15, 1920, revolutionary investment spectrum, but you couldn’t say guy” who loved theatre, the ask him,” says Wilson. “I and of his attempt in the the son of Jewish immigrants equation. that about Mike. He didn’t be- Blue Jays, and board games. watched him stand up and he who had arrived separately He then taught at the Univer- lieve that markets alone can “My friends never knew he was worked his way from the floor mid-1980s to revive horse racing from Odessa, Ukraine, as chil- sity of Rochester for eight solve all the problems.” famous.” up to the speaker’s podium. and Tampa Bay Downs racetrack dren and then met and mar- years, moving his wife and The school gained additional A few years after Gordon’s Usually professors at U of T are in his own backyard. He spent a ried in New York. Gordon grew their two sons, Joe and David, status when Gordon was elect- mandatory retirement in 1985, pretty reserved in public, but lot of money refurbishing the fa- up an only child in Brooklyn in 1962. He and his wife be- ed president of the American Gould organized a conference he knew just how far to go to cility. and Washington Heights. His came involved in the anti-war Finance Association in 1975, an in the wilderness splendour of provide the other side of the Each winter I left my South father, Jack, was an entrepre- and civil-rights movements. honour that goes to leading Northern Ontario’s Minaki argument. Carolina base to meet up with neur and salesman who lived They also became active in the business scholars. He also edit- Lodge. Colleagues and docto- “He wasn’t a timid fellow, but by his wits; his mother, Eva, Unitarian Church. ed several financial journals ral graduates arrived from he didn’t insult people. There Canadian friends in Florida to at- played piano and shared her In 1968, Gordon served as lo- through his career and was across the continent to present were no ad hominem attacks. tend some spring-training love of books with her son. cal campaign manager for made a Fellow of the Royal So- papers and honour their men- Everything was about the is- games. One year on my way At 16, Gordon enrolled in Democratic presidential hope- ciety of Canada in 1993. U of T tor. sue.” down I stopped by Tampa Bay journalism at the University of ful Eugene McCarthy. Well- awarded him an honorary doc- “It was a love-in,” says Hal- Recalling their years working Downs to see the changes. Wisconsin but soon switched known activists such as come- torate in 2005. pern. “It was so enjoyable to be together at Gordon’s kitchen By accident I ran into Mr. faculties after developing a dian Dick Gregory were Upon his arrival in Toronto, with him in that setting. Those table to prevent the brownouts Steinbrenner walking through passion for economics. He frequent visitors to the Gordon his first doctoral student was tributes don’t happen for a lot and skyrocketing energy costs graduated in 1941, the year Ja- home. Son David Gordon, a Lawrence Gould, now a fi- of people.” plaguing California, Wilson ex- the stands. I introduced myself pan bombed Pearl Harbor, and New York derivatives trader for nance professor at the Univer- Upon retirement, Gordon pressed admiration for Gor- and told him what a great job worked in Washington, D.C., HSBC, remembers carrying a sity of . and his wife threw their efforts don’s political astuteness and he was doing. He was, as al- for a few months before join- peace sign with his parents at “He was working on his Cost into an exchange program be- drive. But he’s worried now ways, smartly dressed and very ing the U.S. Army as a 2nd lieu- campus rallies. of Capital book when we met, tween Canadian and Chinese about who will take up the genial to a total stranger. tenant. While posted to an “By 1970, they were ready to exploring different ways to universities. They helped visit- fight. Next day it happened that the artillery unit in Hawaii, he move,” he recalls. “And they measure risk,” says Gould. “He ing students settle in Toronto “He loved his work and he took on the name Mike. It was fell in love with Canada right was an extraordinary man and travelled to China fre- did it full tilt. ... He’s not re- game my friends and I attended there that he met a young YM- away. It was a kinder, gentler who had a tireless energy for quently to teach and attend placeable. We don’t have was the Boston Red Sox and CA worker, Helen Elizabeth version of the United States. ... investigating economic issues. conferences. Gordon was fasci- anyone of that calibre any New York Yankee clash, in Lake- (Betty) Taylor, the daughter of They soon became active in And he had tremendous in- nated by China’s economy and more.” land. We had box seats. Early in Baptist missionaries who Canadian politics and worked sights ... and could deal with wrote many papers on it. Gordon moved back to the the game, Mr. Steinbrenner worked in China and Ohio. with the NDP.” His parents many complex issues at once.” In Canada, he blended his United States in 2004, a few walked by and said, ‘Hello After being transferred to eventually became Canadian Gould taught at McMaster views on the need for profita- years after Betty died. John.’ Imagine my surprise and Oklahoma in 1945, Gordon citizens. University in Hamilton and bility with demands for corpo- He leaves his two sons, Joe proposed by mail. His bride’s Gordon’s arrival at U of T would regularly drive to To- rate responsibility and and David, and three grand- that of my friends. journey to the army base took brought international atten- ronto for conferences with his government regulation. He daughters. Suddenly George wasn’t such so long, she missed the wed- tion to the Faculty of Manage- thesis adviser. called for legislation requiring 66 Special to The Globe and Mail a villain after all.

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