Efficient Market Quotes & Sayings

I recognized that information was, in many respects, like a public good, and it was this insight that made it clear to me that it was unlikely that the private market would provide efficient resource allocations whenever information was endogenous. — Joseph Stiglitz

When I started eBay, it was a hobby, an experiment to see if people could use the Internet to be empowered through access to an efficient market. I actually wasn't thinking about it in terms of a social impact. — Pierre Omidyar

Still, I figure we shouldn't' discourage fans of actively managed funds. With all their buying and selling, active investors ensure the market is reasonably efficient. That makes it possible for the rest of us to do the sensible thing, which is to index. Want to join me in this parasitic behavior? To build a well-diversified portfolio, you might stash 70 percent of your stock portfolio into a Wilshire 5000-index fund and the remaining 30 percent in an international-index fund. — Paul Samuelson

If I subscribed to the efficient market theory I would still be delivering papers — Warren Buffett

Economic activity, especially the activity of a market economy, cannot be conducted in an institutional, juridical or political vacuum. On the contrary, it presupposes sure guarantees of individual freedom and private property, as well as a stable currency and efficient public services. — Pope John Paul II

Ben's Mr. Market allegory may seem out-of-date in today's investment world, in which most professionals and academicians talk of efficient markets, dynamic hedging and betas. Their interest in such matters is understandable, since techniques shrouded in mystery clearly have value to the purveyor of investment advice. After all, what witch doctor has ever achieved fame and fortune by simply advising 'Take two aspirins'? — Warren Buffett

Back in the 1980s, the original stated purpose of the mortgage-backed bond had been to redistribute the risk associated with home mortgage lending. Home mortgage loans could find their way to the bond market investors willing to pay the most for them. The interest rate paid by the homeowner would thus fall. The goal of the innovation, in short, was to make the financial markets more efficient. Now, somehow, the same innovative spirit was being put to the opposite purpose: to hide the risk by complicating it. The market was paying Goldman Sachs bond traders to make the market less efficient. — Michael Lewis

The possibility that stock value in aggregate can become irrationally high is contrary to the hard-form "efficient market" theory that many of you once learned as gospel from your mistaken professors of yore. Your mistaken professors were too much influenced by "rational man" models of human behavior from economics and too little by "foolish man" models from psychology and real-world experience. — Charlie Munger

I have a theory about men like you, Jack."
That seemed to lighten his mood. He slid me an amused glance. "What is your theory, Ella?"
"It's about why you haven't committed to anyone yet. It's really a matter of efficient market dynamics. Most of the women you date are basically the same. You show them a good time, and then it's on to the next, leaving them to wonder why it didn't last. They don't realize that no one ever outperforms the market by offering the same thing everyone else is offering, no matter how well packaged. So the only thing that's going to change your situation is when something random and unexpected occurs. Something you haven't seen on the market before. Which is why you're going to end up with a woman who's completely different from what you and everyone else expects you to go for."
I saw him smile.
"What do you think?"
"I think you could talk the ears off a chicken," he said.
-Ella & Jack — Lisa Kleypas

The market is incredibly inefficient and capable on rare occasions of being utterly dysfunctional. And people have a really hard time getting their brain around that fact. They want to believe that it's approximately efficient almost all the time, and it simply isn't true. — Jeremy Grantham

It is something of a miracle that individual selfish decisions (in a market economy) must lead to a collectively efficient outcome. — Steven Landsburg

Observing that the market was FREQUENTLY efficient, EMT Adherents went on to conclude incorrectly that it was ALWAYS efficient. The difference between these propositions is night and day. — Warren Buffett

I have a name for people who went to the extreme efficient market theory-which is "bonkers". It was an intellectually consistent theory that enabled them to do pretty mathematics. So I understand its seductiveness to people with large mathematical gifts. It just had a difficulty in that the fundamental assumption did not tie properly to reality. — Charlie Munger

This book does not agree with this view. It cannot be assumed that efficient asset allocation will result if investment decisions are made by the investing equivalent of kelp and plankton of the marine food chain - uneducated passive reactors whose goal in investing is to outperform a market consistently. — Martin J. Whitman

America used to be a uniquely productive, low-cost place to do business. We had efficient infrastructure. We had limited regulation. We believed in the market. — Michael Porter

It would appear that, on the level of individual nations and of international relations, the free market is the most efficient instrument for utilizing resources and effectively responding to needs. — Pope John Paul II

Barge traffic on the Mississippi River represents the most efficient, most cost-effective, most environmentally sound means of transporting commodity goods from this region of the country to market. — Leonard Boswell

The way to improve productivity is not to bring in experts to talk about inputs - seed, equipment and materials, pesticides or water supply. The way to start is to provide an assured market, a fair price, and a system through which rural producers can market their produce which is reasonably efficient and can transfer to them the maximum share of the consumers' money. If such a structure is erected, the producers will then seek the inputs and materials they need to increase their production and productivity. — Verghese Kurien

With your Social Security number in the wind, whoever finds it - or, more likely, whoever buys it on one of the many black-market information exchanges on the deep web - holds the keys to every part of your life. What that means - plain and simple - is that you're going to need an efficient way to keep one eye over your shoulder, all the time. — Adam Levin

Under the tenets of behavioral finance, markets are not always efficient. It is human behavior that moves markets and not the universal information shared by market participants. — Gary Antonacci

There is no reason why, with the huge potential for market out there in the world for fuel-efficient vehicles, we can't be the cutting edge for change. — Jennifer Granholm

So long as the Constitution is not amended beyond recognition, so long as elections are held regularly and fairly and the ethos of secularism broadly prevails, so long as citizens can speak and write in the language of their choosing, so long as there is an integrated market and a moderately efficient civil service and army, and - lest I forget - so long as Hindi films are watched and their songs sung, India will survive — Ramachandra Guha

We do not have free market capitalism in America; we have crony capitalism. There is a huge difference between free market capitalism that democratizes a country and makes us more efficient and prosperous and corporate crony capitalism. — Robert F. Kennedy Jr.

What the efficient market hypothesis doesn't account for is that people are not always rational. Just ask any divorce lawyer. — Coreen T. Sol

City planning finds its validation in the intuitive recognition that a burgeoning market society can not be trusted to produce spontaneously a habitable, sanitary, or even efficient city, much less a beautiful one. — Murray Bookchin

Haitian rice farmers are quite efficient, but they can't compete with U.S. agribusiness that relies on a huge government subsidy, thanks to Ronald Reagan's free market enthusiasms. — Noam Chomsky

The sort of the most efficient way for online dating marketplace to evolve and, in fact, any marketplace to evolve is to have one really big market where people can enter and exit as they please, where people have really advanced search, sort, and filtering technology. — Sam Yagan

The sad truth is that it is precisely those who disagree most with the hypothesis of efficient market pricing of stocks, those who pooh-pooh beta analysis and all that, who are least able to understand the analysis needed to test that hypothesis. — Paul Samuelson

In the end, all new schools, public or private, snobby or not, add value to the education market, making it bigger and more efficient, in the same way that Zuckerberg added wealth to the economy even for non-Facebook fans. — Amity Shlaes

Value investing is predicated on the efficient market hypothesis being wrong. — Seth Klarman

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. — Eugene Fama

The market is a mechanism for sorting the efficient from the inefficient, it is not a substitute for responsibility. — Charles Handy

Be greedy when others are fearful and fearful when others are greedy.' Easier said than done for the vast majority of stock traders ... On every stock trade there is someone who wants to sell and someone who wants to buy, at least at a particular price ... the person who is selling thinks that she is getting out just in time while the person buying thinks that he is about to make good money.
... The truth is that the market doesn't really reflect some magical perfect valuation of a stock under the efficient market hypothesis. It reflects the mass consensus of how actual individual investors value the stock. It is the sum total of everyone's hopes and fears ... — M.E. Thomas

The thing about markets, and I think the thing people don't understand about that, is markets are not kind, but they're very efficient. So when the marketplace determines an inefficiency in the system, it corrects that, and a market system that's left alone will reward good behavior and punish bad behavior. — Randy Neugebauer

The free market is not only a more efficient decision maker than even the wisest central planning body, but even more important, the free market keeps economic power widely dispersed. — Milton Friedman

A home that nourishes life embraces the little moments and appreciates the rhythmic seasons of life, including the time necessary to cook real food from scratch...It doesn't have to take too much time, however, with efficient menu planning and wisely planned trips to the grocery store and farmers' market.
The payoffs are astronomical - better health, good stewardship of our environment, and setting a good example for our children are just a few of the benefits. It also fosters an appreciation of the ebbs and flows of seasons because you'll be using fresh ingredients that are more readily available (and of higher quality) when they are in season. If you feel too busy to cook from scratch, then I argue that you're too busy, period. Reevaluate your priorities and commitments. If you want to live a healthy, long life and to pass the same luxury on to your children, then you MUST take the time to cook real food — Tsh Oxenreider

The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient. — Warren Buffett

If you thought the advent of the Internet, the spread of cheap and efficient information technology, and the growing fragmentation of the consumer market were all going to help smaller companies thrive at the expense of the slow-moving giants of the Fortune 500, apparently you were wrong. — James Surowiecki

Capitalism is astonishingly efficient at generating new wealth, but it operates beneficently only
when the market is shaped by moral forces coming from both the law and the culture-derived ultimately from religion. — Charles W. Colson

We make two assumptions that are vital to the arguments in this book: There are active managers that can beat the market (i.e., the market is not completely efficient). Superior active managers can be identified. — Meb Faber

The defender of the dogmas of modern finance and efficient markets started a fund that took advantage of market inefficiencies! It is as if the Pope converted to Islam. — Nassim Nicholas Taleb

There is no other proposition in economics that has more solid empirical evidence supporting it than the Efficient Market Hypothesis ... In the literature of finance, accounting, and the economics of uncertainty, the EMH is accepted as a fact of life. — Michael Jensen

I am not well qualified to criticize the theory of rational expectations and the efficient market hypothesis because as a market participant I considered them so unrealistic that I never bothered to study them. — George Soros

Berkshire's whole record has been achieved without paying one ounce of attention to the efficient market theory in its hard form. And not one ounce of attention to the descendants of that idea, which came out of academic economics and went into corporate finance and morphed into such obscenities as the capital asset pricing model, which we also paid no attention to. I think you'd have to believe in the tooth fairy to believe that you could easily outperform the market by seven-percentage points per annum just by investing in high volatility stocks. — Charlie Munger

The efficient market hypothesis (EMH) explains this phenomenon: current market prices reflect the total knowledge and expectations of all investors, and it is highly unlikely that one investor can know more than the market does collectively. For — Larry E. Swedroe

The truth is that the market doesn't really reflect some magical perfect valuation of a stock under the efficient market hypothesis. It reflects the mass consensus of how actual individual investors value the stock. It is the sum total of everyone's hopes and fears about what a company is capable of doing. — M.E. Thomas

In an efficient market, at any point in time, the actual price of a security will be a good estimate of its intrinsic value. — Eugene Fama