“Stock prices are likely to be among the prices that are relatively vulnerable to purely social movements because there is no accepted theory by which to understand the worth of stocks....investors have no model or at best a very incomplete model of behavior of prices, dividend, or earnings, of speculative assets.” SocialMovementTheoryBehaviorModelsInvestingAcceptedVulnerableAssetsInvestorsEarningIncompleteDividendsSocial MovementsStock Price Author:Robert J. Shiller
“While the apostles of the new so-called "behavioral" theory present ample evidence of how often human beings make irrational financial decisions, it remains to be seen whether these decisions lead to predictable errors that create systematic mispricings upon which rational investors can readily and economically capitalize.” HumansHuman BeingsDecisionTheoryEvidenceRemainsErrorsInvestingFinancialRationalInvestorsIrrationalApostlesPredictableSystematic Author:John C. Bogle
“The efficient market theory is one of the better models in the sense that it can be taken as true for every purpose I can think of. For investment purposes, there are very few investors that shouldn't behave as if markets are totally efficient.” IfsThinkingI CanPurposeTakenTheoryModelsInvestmentInvestingBehaveInvestorsEfficientEfficient Markets Author:Eugene Fama
“Market-cap based indexing will never be driven from its deserved perch as core and deserved king of the investment world. It is what we should all own in theory and it has delivered low-cost equity returns to a great mass of investors... the now and forever king-of-the-hill.” WorldShouldForeverTheoryReturnKingsCostMassLowsInvestmentInvestingDrivenCoreHillsInvestorsEquityCapsIndexing Author:Cliff Asness
“One of the best predictors of policy around is Thomas Ferguson's investment theory of politics, as he calls it - very outstanding political economist - which essentially - I mean, to say it in a sentence, he describes elections as occasions in which groups of investors coalesce and invest to control the state.” MeanStatesPoliticalGroupsPolicyTheoryElectionInvestmentSentencesOccasionsInvestorsEconomistOutstandingFerguson Author:Noam Chomsky
“As value investors, our business is to buy bargains that financial market theory says do not exist. We've delivered great returns to our clients for a quarter century-a dollar invested at inception in our largest fund is now worth over 94 dollars, a 20% net compound return. We have achieved this not by incurring high risk as financial theory would suggest, but by deliberately avoiding or hedging the risks that we identified.” ValuesRiskCenturyTheoryReturnDollarsFinancialFundInvestorsQuartersClientsAvoidingBargainsCompoundsFinancial MarketsInceptionHigh RiskIncurringHedging Author:Seth Klarman
“The unhappy theory of business ethics is this: you have a fiduciary responsibility to maximize profit. Period. To do anything other than that is to cheat your investors. And in a competitive world, you don't have much wiggle room here.” WorldRoomsResponsibilityTheoryPeriodsEthicsProfitUnhappyInvestorsCheatBusiness EthicsFiduciary Author:Seth Godin