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… — Eugene Fama Copy Share Image
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… — Eugene Fama Copy Share Image
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… — Eugene Fama Copy Share Image
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… — Eugene Fama Copy Share Image
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 Copy Share Image
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 Copy Share Image
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… — Eugene Fama Copy Share Image
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… — Eugene Fama Copy Share Image
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… — Eugene Fama Copy Share Image
State constitutions typically provide that the state first has to service its debt, then make it pension payments, and then pay for services. What… — Eugene Fama Copy Share Image
The efficient market theory is one of the better models in the sense that it can be taken as true for every purpose I… — Eugene Fama Copy Share Image
People are always saying that prices are too high. When they turn out to be right, we anoint them. When they turn out to… — Eugene Fama Copy Share Image
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 Copy Share Image
