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Eugene Fama Quotes

born 1939 United States

Eugene Francis "Gene" Fama (born February 14, 1939) is an American economist and Nobel laureate in Economics with Lars Peter Hansen and Robert J. Shiller, known for his work on portfolio theory and asset pricing, both theoretical and empirical.

United States
Economists
Nobel laureates

Random Eugene Fama quote

4 quotes

The question is when is active management good? The answer is never.

Although size and book to market equity seem like ad hoc variables for explaining average stock returns, we have reason to expect that they proxy for common risk factors in returns.

Firms that have a high BE/ME (a low stock price relative to book value) tend to have low earnings on assets. Conversely, low BE/ME (a high stock price relative to book value) is associated with persistently high earnings.

If active managers win, it has to be at the expense of other active managers. And when you add them all up, the returns of active managers have to be literally zero, before costs. Then after costs, it's a big negative sign

Attribution

Quotes and notes from Wikiquote: Eugene Fama (page history), available under CC BY-SA 4.0.