The David Rubenstein Show · Sep 24, 2026 · 24m · 12m saved
With David Booth, Founder and Chairman of Dimensional Fund Advisors
Dimensional Fund Advisors started in 1981 in a Brooklyn brownstone with four or five people, and it now manages a little over a trillion dollars.
A traditional index fund is built to track its benchmark as closely as it can. David Booth said Dimensional deliberately departs from the index a little, using human judgment in trading and in how it builds portfolios, because flexibility has economic value.
"They wouldn't give me the lines because they thought I was a bookie."
David Booth, Founder and Chairman of Dimensional Fund Advisors, on The David Rubenstein Show. He was Eugene Fama's research assistant at the University of Chicago, whose business school now carries his name, and he has just published a book, Stay Calm.
The full interview is covered here so you can skip it. 24 minutes of audio, 12 minutes of reading.
Here are the 17 lessons that matter.
Key Takeaways
The biggest mistake investors make is thinking they have to predict which stocks to buy and when to get in or out
Dimensional does not try to match an index exactly, because Booth said flexibility has economic value
Small stocks are risky one by one but compelling as a group, the idea Dimensional was founded on
The first nine years lagged the S&P 500, and he said the last 35 have been terrific
An AI stock picker would have to beat everyone else's AI, which Booth called unlikely
The firm runs better under its two co-CEOs than it would have with him still in charge
His father's $15,000 in a safe deposit box was what let his parents stay calm
He never set out to be the biggest firm, and told employees that trust is the product
1. Built To Apply The Science
David Rubenstein, the host, asked whether Booth imagined a trillion-dollar firm when he started in a Brooklyn brownstone in 1981.
"No, that was way beyond what we were thinking. We were just trying to survive." — David Booth
"The firm was built around the idea that finance had developed into a science in the 60s and 70s. And we wanted to figure out how to apply the science." — David Booth
Now chairman, not CEO
Booth was CEO and is now chairman. Two co-CEOs run the firm day to day, and he said he brings institutional memory and meets them regularly.
