Quotes by Eugene Fama, Jr.

(77) "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." Mike Jensen in the Sixties and Mark Carhart in the Nineties both conducted exhaustive studies of professional investors. They each conclude that in general, a manager's fee, and not his skill, plays the biggest role in performance."
(72) "Ninety-seven percent of performance variation is due to asset class structure -- Study of 31 institutional pension funds during a range of six- to 12-year periods."
- Dimensional Fund Advisors' Conference, University of Chicago Graduate School of Business
(74) "History shows that in the long run a thoughtfully designed, diversified strategy of "passive" funds typically beats all but a few active managers. It's not easy to structure and maintain such a strategy. It requires some initial research and discipline to stay the course. But it's much easier than predicting which active managers will randomly beat this approach."
(85) "Investment planning is about structuring exposure to risk factors."
December 2001
- The Error Term