--- title: "Meaning & Key Takeaway of: I have a name for people who went to the…" description: "\"I have a name for people who went to the extreme efficient market theory-which is \"bonkers\". It was an intellectually consistent theory that enabled th..." image: "https://sms4smile.com/quotes/i/534/charlie-munger-458_assumption_i-have-a-name-for-people-who-went-to-the_2512043.jpg" --- # I have a name for people who went to the extreme efficient… ![“I have a name for people who went to the extreme efficient market theory-which is "bonkers". It was an intellectually consistent theory that enabled them to do pretty mathematics. So I understand its seductiveness to people with large mathematical gifts. It just had a difficulty in that the…” quote by Charlie Munger](https://sms4smile.com/quotes/i/534/charlie-munger-458_assumption_i-have-a-name-for-people-who-went-to-the_2512043.jpg) [Download](https://sms4smile.com/quotes/i/534/charlie-munger-458_assumption_i-have-a-name-for-people-who-went-to-the_2512043.jpg) [Open image](https://sms4smile.com/quotes/i/534/charlie-munger-458_assumption_i-have-a-name-for-people-who-went-to-the_2512043.jpg) > “I have a name for people who went to the extreme efficient market theory-which is "bonkers". It was an intellectually consistent theory that enabled them to do pretty mathematics. So I understand its seductiveness to people with large mathematical gifts. It just had a difficulty in that the fundamental assumption did not tie properly to reality.” [Charlie Munger](https://sms4smile.com/quotes/author/charlie-munger/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. The efficient market theory is appealing to mathematically gifted people but fails because its core assumption doesn’t match reality. **In simple terms:** Theory sounds good but may be unrealistic. Key Takeaway Question assumptions against real‑world data. Themes critical thinking financial theory skepticism Mood analytical cautious Type critical philosophical When to use this quote - investment analysis - financial education - risk assessment Key Concepts Behavioral economics market efficiency Questions to Reflect On - How do you test a theory against reality? - When is it worth using an imperfect model? A Different Perspective The theory can still provide useful insights when applied cautiously. ★ ★ ★ ★ ★ No ratings yet [Assumption](https://sms4smile.com/quotes/about/assumption/) [Bonkers Intellectually](https://sms4smile.com/quotes/about/bonkers-intellectually-1165333/) [Consistent](https://sms4smile.com/quotes/about/consistent/) [Difficulty](https://sms4smile.com/quotes/about/difficulty/) [Efficient](https://sms4smile.com/quotes/about/efficient/) [Efficient Market](https://sms4smile.com/quotes/about/efficient-market-1165332/) [Efficient markets](https://sms4smile.com/quotes/about/efficient-markets/) [Extremes](https://sms4smile.com/quotes/about/extremes/) [Fundamentals](https://sms4smile.com/quotes/about/fundamentals/) [Investing](https://sms4smile.com/quotes/about/investing/) [Market Theory](https://sms4smile.com/quotes/about/market-theory-1165330/) [Mathematical](https://sms4smile.com/quotes/about/mathematical/) [Mathematics](https://sms4smile.com/quotes/about/mathematics/) [Names](https://sms4smile.com/quotes/about/names/) [People](https://sms4smile.com/quotes/about/people/) [Reality](https://sms4smile.com/quotes/about/reality/) [Theory](https://sms4smile.com/quotes/about/theory/) [Theory Bonkers](https://sms4smile.com/quotes/about/theory-bonkers-1165331/) [Ties](https://sms4smile.com/quotes/about/ties/) ## Related 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…](https://sms4smile.com/quotes/eugene-fama/the-efficient-market-theory-is-one-of-the-better-models-in-the-sense/) [Eugene Fama](https://sms4smile.com/quotes/author/eugene-fama/) > [Berkshire's whole record has been achieved without paying one ounce of attention to the efficient market theory in its hard form. 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