Customer Quote by Eugene Fama
“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 of the market, and they don't respond to the actions of active managers.”
About This Quote
Source Book: Efficient Frontier Theory, 1991
Active investing seeks to outperform the market, but gains often offset losses elsewhere, making it a zero‑sum contest with passive strategies.
In simple terms: Active investing is a zero‑sum game.
Key Takeaway
Consider passive approaches for steady returns.
Themes
finance
competition
strategy
Mood
analytical
critical
Type
financial
educational
When to use this quote
- portfolio building
- retirement planning
- asset allocation
Key Concepts
market efficiency
risk‑adjusted return
Questions to Reflect On
- Is active always zero‑sum?
- When can passive beat active?
A Different Perspective
Passive may underperform in niche markets.
