Eugene Fama Quotes

#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.

Eugene Fama

#2. I don't believe anyone wants to hear what I have to say.

Eugene Fama

#3. 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

#4. I'd compare stock pickers to astrologers but I don't want to bad mouth astrologers.

Eugene Fama

#5. 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

#6. 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

#7. An investor doesn't have a prayer of picking a manager that can deliver true alpha.

Eugene Fama

#8. 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

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

Eugene Fama

#10. 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

#11. 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

#12. After taking risk into account, do more managers than you'd see by chance outperform with persistence? Virtually every economist who studied this question answers with a resounding 'no.'

Eugene Fama

#13. 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

#14. 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

#15. 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

#16. I take the market-efficiency hypothesis to be the simple statement that security prices fully reflect all available information.

Eugene Fama

#17. 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