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Eugene Fama Quotes

I don’t believe anyone wants to hear what I have to say Picture Quote #1

People don’t walk away from their homes unless they can’t make the payments. That’s an indication that we are in a recession Picture Quote #1

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 Picture Quote #1

Debates go on to this day about what caused the Great Depression. Economics is not very good at explaining swings in economic activity Picture Quote #1

After costs, only the top 3% of managers produce a return that indicates they have sufficient skill to just cover their costs, which means that going forward, and despite extraordinary past returns, even the top performers are expected to be only as good as a low-cost passive index fund. The other 97% can be expected to do worse Picture Quote #1

The distribution of the market is fat-tailed relative to the normal distribution... For passive investors, none of this matters, beyond being aware that outlier returns are more common than would be expected if return distributions were normal Picture Quote #1

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I can’t figure out why anyone invests in active management, so asking me about hedge funds is just an extreme version of the same question. Since I think everything is appropriately priced, my advice would be to avoid high fees. So you can forget about hedge funds Picture Quote #1

Markets are efficient, but there are different dimensions of risk and those lead to different dimensions of expected returns. That’s what people should be concerned with in their investment decisions and not with whether they can pick stocks, pick winners and losers among the various managers delivering basically the same product Picture Quote #1

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 Picture Quote #1

State constitutions typically provide that the state first has to service its debt, then make it pension payments, and then pay for services. What we don’t know is whether that order will be enforced. And ultimately, the busted state is going to be looking to the federal government for a bailout. Think Greece, but on a much bigger scale Picture Quote #1

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 Picture Quote #1

In an efficient market at any point in time the actual price of a security will be a good estimate of its intrinsic value Picture Quote #1

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I’d compare stock pickers to astrologers but I don’t want to bad mouth astrologers Picture Quote #1

I don’t even know what that means. People who get credit have to get it from somewhere. Does a credit bubble mean that people save too much during that period? 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 Picture Quote #1

An investor doesn’t have a prayer of picking a manager that can deliver true alpha Picture Quote #1

The efficient market theory is one of the better models in the sense that it can be taken as true for every purpose I can think of. For investment purposes, there are very few investors that shouldn’t behave as if markets are totally efficient Picture Quote #1

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Text Quotes

I don’t believe anyone wants to hear what I have to say (Eugene Fama Quotes) People don’t walk away from their homes unless they can’t make the payments. That’s an indication that we are in a recession (Eugene Fama Quotes) 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 (Eugene Fama Quotes) Debates go on to this day about what caused the Great Depression. Economics is not very good at explaining swings in economic activity (Eugene Fama Quotes) After costs, only the top 3% of managers produce a return that indicates they have sufficient skill to just cover their costs, which means that going forward, and despite extraordinary past returns, even the top performers are expected to be only as good as a low-cost passive index fund. The other 97% can be expected to do worse (Eugene Fama Quotes) The distribution of the market is fat-tailed relative to the normal distribution... For passive investors, none of this matters, beyond being aware that outlier returns are more common than would be expected if return distributions were normal (Eugene Fama Quotes) I can’t figure out why anyone invests in active management, so asking me about hedge funds is just an extreme version of the same question. Since I think everything is appropriately priced, my advice would be to avoid high fees. So you can forget about hedge funds (Eugene Fama Quotes) Markets are efficient, but there are different dimensions of risk and those lead to different dimensions of expected returns. That’s what people should be concerned with in their investment decisions and not with whether they can pick stocks, pick winners and losers among the various managers delivering basically the same product (Eugene Fama Quotes) 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. (Eugene Fama Quotes) State constitutions typically provide that the state first has to service its debt, then make it pension payments, and then pay for services. What we don’t know is whether that order will be enforced. And ultimately, the busted state is going to be looking to the federal government for a bailout. Think Greece, but on a much bigger scale. (Eugene Fama Quotes) 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. (Eugene Fama Quotes) In an efficient market at any point in time the actual price of a security will be a good estimate of its intrinsic value (Eugene Fama Quotes) I’d compare stock pickers to astrologers but I don’t want to bad mouth astrologers (Eugene Fama Quotes) I don’t even know what that means. People who get credit have to get it from somewhere. Does a credit bubble mean that people save too much during that period? 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 (Eugene Fama Quotes) An investor doesn’t have a prayer of picking a manager that can deliver true alpha (Eugene Fama Quotes) The efficient market theory is one of the better models in the sense that it can be taken as true for every purpose I can think of. For investment purposes, there are very few investors that shouldn’t behave as if markets are totally efficient (Eugene Fama Quotes)