Eugene Fama Quotes

Eugene Fama
Eugene Fama
American Economist
Born: Feb 14, 1939
Any Buy Finance Good People Think
Related authors: Alan Greenspan Herbert A. Simon John Kenneth Galbraith Milton Friedman Paul A. Volcker Richard Thaler Robert Reich Thomas Sowell
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
Good Past Other Extraordinary Despite Top Worse Only Costs Performers Return Returns Cover Passive Expected Managers Going Just After Which Low-Cost Produce Skill Means Forward Even Fund Sufficient
The problem that people don't understand is that active managers, almost by definition, have to be poorly diversified. Otherwise, they're not really active. They have to make bets. What that means is there's a huge dispersion of outcomes that are totally consistent with just chance. There's no skill involved it. It's just good luck or bad luck. Eugene Fama
Good People Bad Luck Problem Luck Active Otherwise Good Luck Consistent Definition Bad Outcomes Totally Bets Diversified Almost Involved Make Understand Huge Managers Just Poorly Really Skill Means Chance
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
Service Government Will First Looking Pay Think State Scale Pension Constitutions Federal Federal Government Bailout Know Make Provide Ultimately Debt Greece Going Order Bigger Whether Then Much Enforced Payments Busted Services
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
Time Good Will Value Market Intrinsic Security Point Price Efficient Any Estimate Actual
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. Eugene Fama
People Predict Market Bit Evidence Ability Pick Most Identify Returns Been Stocks Any Quite Quite A Bit Just Skilled Show Lucky Even Professionals Based
An investor doesn't have a prayer of picking a manager that can deliver true alpha. Eugene Fama
Prayer Deliver Investor Picking True Alpha Manager
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
Saying Time People Half Too Out High About Prices Wrong Half The Time Always Them Turn Ignore Right Right And Wrong
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
People Walk Recession Unless Indication Make Payments Homes Away
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
Democracy People Extreme Libertarian Stripes About No Reason Argue Realize Views Reason
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. Eugene Fama
You People Will Pay Pay Attention Down Think Those Would Find See Prices Bubbles Attention Particular Look Period Hindsight Always Go Up Any Where Predicted Then Who Things
I buy the market through index funds. Since I'm getting older, I buy TIPS. Eugene Fama
Buy Getting Older Older Market Through Since Getting Tips Funds
After 2008, my brand of finance got a bad rap. Eugene Fama
Finance Rap Bad Bad Rap Got Brand After
The investors who generate big returns over five years, the guys they write books about, are supposed to keep winning, right? Well, they don't. Eugene Fama
Big Books About Guys Winning Write Generate Investors Over Supposed Well Returns Years Five Who Keep Right
The proposition is that prices reflect all available information, which in simple terms means since prices reflect all available information, there's no way to beat the market. Eugene Fama
Simple Reflect Market Way Beat Prices Proposition Since Terms Information Which Available Means
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. Eugene Fama
Tired Rest College Economics Year Took Spent Kind French Course Years Junior Junior Year Getting Loved Two
All the central banks are doing is substituting one form of debt with another form of debt. They're issuing short term debt and using it to buy long term debt. In finance, we tend to think that's a neutral activity, even though those stimulus programs are huge. Eugene Fama
Finance Buy Long Think Programs Those Though Tend Neutral Long-Term Term Another Doing Stimulus Huge Debt Short Banks Form Central Short-Term Using Even Activity

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