Eugene Fama
Eugene Fama
Eugene Francis "Gene" Famais an American economist and Nobel laureate in Economics, often referred to as "The Father of Finance", best known for his empirical work on portfolio theory, asset pricing and stock market behaviour...
NationalityAmerican
ProfessionEconomist
Date of Birth14 February 1939
CountryUnited States of America
bubble
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.
half people prices saying time turn
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.
believe
I don't believe anyone wants to hear what I have to say.
indication people unless
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.
argue extreme people views
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.
debt disappear economies function government likely might
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.
cover despite expected good managers means passive performers produce return skill sufficient top
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 only as good as a low-cost passive index fund. The other 97% can be expected to do worse.
caused debates economics explaining good great swings
Debates go on to this day about what caused the Great Depression. Economics is not very good at explaining swings in economic activity.
actual efficient estimate good intrinsic point price time
In an efficient market, at any point in time, the actual price of a security will be a good estimate of its intrinsic value.
bigger busted federal government order pay pension provide state whether
State constitutions typically provide that the state first has to service its debt, then make it pension payments, and then pay for services. What we don't know is whether that order will be enforced. And ultimately, the busted state is going to be looking to the federal government for a bailout. Think Greece, but on a much bigger scale.
prayer alphas managers
An investor doesn’t have a prayer of picking a manager that can deliver true alpha.
thinking attention investing
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?
matter return normal
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.
persistence risk answers
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.'