Quotes & Sayings About Efficient Markets

Over the years, the U.S. economy has shown a remarkable ability to absorb shocks of all kinds, to recover, and to continue to grow. Flexible and efficient markets for labor and capital, an entrepreneurial tradition, and a general willingness to tolerate and even embrace technological and economic change all contribute to this resiliency. — Ben Bernanke

Markets are efficient, but there are different dimensions of risk and those lead to different dimensions of expected returns. That's what people should be concerned with in their investment decisions and not with whether they can pick stocks, pick winners and losers among the various managers delivering basically the same product. — Eugene Fama

I don't entirely reject the idea of efficient markets. It needs updating. — Andrew Lo

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 Market allegory may seem out-of-date in today's investment world, in which most professionals and academicians talk of efficient markets, dynamic hedging and betas.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

Markets are nimble and efficient, gathering the collective but disbursed intelligence of the economy's players and communicating up-to-the-minute realities of prices, product availability, etc. Government is typically cumbersome, plodding, and slow. — Joel Miller

Capitalism has taught us that markets are always more efficient than hierarchical managerial coordination. But in a situation where those three conditions aren't met, I can't outsource or partner with you because markets don't function in the absence of sufficient information. — Clayton Christensen

Financial markets need to become less, not more, efficient. — Ha-Joon Chang

Not exclusively, but the bulk of our local economy should be covered by local currencies, which is more efficient than having global currencies which lose connection with reality in the markets, shops and communities of the people. — David Korten

In sum, economists (and those who listened to them) became overconfident in their preferred models of the moment: markets are efficient, financial innovation improves the risk-return trade-off, self-regulation works best, and government intervention is ineffective and harmful. They forgot about the other models. There was too much Fama, too little Shiller. The economics of the profession may have been fine, but evidently there was trouble with its psychology and sociology. — Dani Rodrik

CFR's Renewing America initiative - from which this book arose - has focused on those areas of economic policy that are the most important for reinforcing America's competitive strengths. Education, corporate tax policy, and infrastructure, for example, are issues that historically have been considered largely matters of domestic policy. Yet in a highly competitive global economy, an educated workforce, a competitive tax structure, and an efficient transportation network are all crucial to attracting investment and delivering goods and services that can succeed in global markets. The line between domestic economic policy and foreign economic policy is in many cases now almost invisible. Building a more competitive economy for the future requires that our political leaders - not just in Congress and the White House but also in state and local governments - understand how their policy choices can affect the choices of companies that can now invest almost anywhere in the world. — Edward Alden

The only reason free markets have a ghost of a chance is that they are so much more efficient than any other form of organization. — Milton Friedman

Although efficient markets people still go around saying there is a "mountain" of evidence supporting their hypothesis, the truth of the matter is that it's a very old mountain that's now eroding rapidly into the sea. — Robert Haugen

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

What's so seductive about the efficient markets hypothesis is that it applies nine years out of ten. A lot of the time it works. But when it stops working, you blow up. — Niall Ferguson

In certain circumstances, financial markets can affect the so-called fundamentals which they are supposed to reflect. When that happens, markets enter into a state of dynamic disequilibrium and behave quite differently from what would be considered normal by the theory of efficient markets. Such boom/bust sequences do not arise very often, but when they do, they can be very disruptive, exactly because they affect the fundamentals of the economy. — George Soros

I have great, great confidence in our capital markets and in our financial institutions. Our financial institutions, banks and investment banks, are strong. Our capital markets are resilient. They're efficient. They're flexible. — Henry Paulson

Your normal Wall Street big-swinging Richard has enough of a lingering moral compass to at least tell himself that his wizardry benefits somebody or something besides himself. You know, his cleverness makes capital markets more efficient. It provides credit to productive enterprise. Whatever. — Tina Brown

I have noticed that everyone who has ever tried to tell me that markets are efficient is poor. — Larry Hite

If we don't like rent control, we ought to oppose it on political and social grounds - and not just by arguing that, thanks to smartphones and social networks, we can create new, more efficient markets for matching short-term renters with tenants. — Evgeny Morozov

Our purpose, as we face these challenges, remains clear - fair and orderly markets that allow for efficient capital formation, while protecting the interests of investors. — Arthur Levitt

More and more investors may be coming into markets everywhere but that doesn't mean that the markets are really getting more and more efficient, even in the United States. It does mean that there is more access for savvy investors who watch the money flows. — Andrew Lo

You know what term you don't hear anymore? Arbitrage. The markets have gotten too efficient. — Nelson Peltz

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

I'm from Berkeley, California, so I'm fully trained in socialism and all, but basically what they teach you there is markets are efficient and we can't beat them, so we might as well index. — Louis Navellier

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

Seven habits that help produce the anything-but-efficient markets that rule the world.
1. Think short term.
2. Be greedy.
3. Believe in the greater fool
4. Run with the herd.
5. Overgeneralize
6. Be trendy
7. Play with other people's money — Paul Krugman

I think markets will never be efficient because of human nature. — 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

Markets look a lot less efficient from the banks of the Hudsonthan the banks of the Charles. — Fischer Black

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