Could a Ph.D. program have changed the history of junk bonds in the US?

I first heard about Michael Milken in 1970 from Professor James Walter, who accepted me into Wharton’s finance Ph.D. program. Having completed his Wharton MBA, Milken was honored to co-author an academic paper with Walter. The subject: how a diversified portfolio of high-yield/high-risk bonds, aka “fallen angels” or “junk bonds,” could provide superior returns to investment-grade bonds.

Instead of accepting Walter’s invitation into Wharton’s Ph.D. program and becoming my classmate, Milken decided to implement his junk bond findings on Wall Street. The rest is history.

Besides making Drexel Burham Lambert one of the most powerful investment banking firms, Milken became the “King of Junk…