Active Quote by Eugene Fama
“Active management is a zero-sum game before cost, and the winners have to win at the expense of the losers.”
About This Quote
Source Paper: Journal of Financial Economics, 1970
Active management often transfers wealth from losers to winners, making it a zero‑sum competition after costs.
In simple terms: Active investing is a zero‑sum game.
Consider passive strategies for net gains.
Themes
Mood
Type
When to use this quote
- portfolio management
- retirement planning
- fund selection
- cost analysis
Key Concepts
Questions to Reflect On
- What conditions make active management worthwhile?
- How do fees impact net returns?
Passive may underperform in niche markets.