Words matter. These are the best Eugene Fama Quotes, and they’re great for sharing with your friends.
I’m an extreme libertarian, but I realize we’re in a democracy, and in a democracy, people can have views of all stripes, and there’s no reason to argue about it.
Debates go on to this day about what caused the Great Depression. Economics is not very good at explaining swings in economic activity.
Tastes and behavior are important in economics. Nobody denies that. But the question is: How much of behavior is irrational, and how much of the irrational behavior really affects prices? It turns out that’s very difficult to answer.
Market timing doesn’t work. If all the bubbles and all this mispricing really exist, how come so few people see it before it turns out that way?
Active investment is a zero-sum game. Passive managers don’t play the game. They buy something resembling the market as a whole, or some segment of the market, and they don’t respond to the actions of active managers.
If you go back to the late ’50s, there really was nothing called “academic finance.” Well, there was something being taught in business schools as finance, but it really had no strong research underpinnings.
I think bubbles are things people see with 20/20 hindsight. If you look at any particular period where prices go up and then they go down, you will always find people who predicted that they would go down. Those are the people you pay attention to.
People are always saying that prices are too high. When they turn out to be right, we anoint them. When they turn out to be wrong, we ignore them. They are typically right and wrong about half the time.
Economies typically do not function well in hyperinflation. The real value of government debt might disappear, but the economy is likely to disappear with it.
I buy the market through index funds. Since I’m getting older, I buy TIPS.
People think rationally that the world really is more risky. Imagine in 2008 that investors thought there was a 10% chance we’d have a depression. That would partly justify the drop in prices.
An investor doesn’t have a prayer of picking a manager that can deliver true alpha.
After 2008, my brand of finance got a bad rap.
There’s quite a bit of evidence that even professionals don’t show any ability to pick stocks or to predict market rollbacks. Most of the people we identify as skilled based on returns have probably just been lucky.
I don’t know what a credit bubble means. I don’t even know what a bubble means. These words have become popular. I don’t think they have any meaning.
I don’t believe anyone wants to hear what I have to say.
In my junior year in college, I was getting kind of tired of French. So, I took an economics course, and I loved it. The rest of my two years in college I spent in economics.
