Investing – Quotes

Risk is good. Not

Risk is good. Not properly managing your risk is a dangerous leap. Evel Knievel

There are jobs to be created on both sides of the climate argument. Whether we are investing in oil or sun, coal or wind, gas or algae, the economy will be stimulated by the investment. The economy, unlike each of us, is not swayed by ideology. Evangeline Lilly

There is safety in

There is safety in numbers. Euripides

I don’t think the

I don’t think the Federal Reserve has any role in how high rates are right now. I don’t understand why everyone is paying attention to this tapering. The Fed is using one kind of bond to buy another kind of bond. What’s the big deal, and why is anyone taking the Fed seriously? Eugene Fama

The distribution of the

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

People would be a

People would be a lot more skeptical if they understood that there is an incredible amount of chance in the results that you observe for active managers. So the distribution of outcomes is enormously wide – but that’s exactly what you’d expect by chance with lots of active managers who hold imperfectly diversified portfolios. The … Read more

The efficient market theory

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

Active management is a

Active management is a zero-sum game before cost, and the winners have to win at the expense of the losers. Eugene Fama

I can’t figure out

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

Markets are efficient, but

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