Quotes

Quotes by Paul Samuelson

(17)
(177) "Even fans of actively managed funds often concede that most other investors would be better off in index funds. But buoyed by abundant self-confidence, these folks aren't about to give up on actively managed funds themselves. A tad delusional? I think so. Picking the best-performing funds is 'like trying to predict the dice before you roll them down the craps table,' says an investment adviser in Boca Raton, FL. 'I can't do it. The public can't do it.'"
2007
(178) "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 (Dow Jones) Wilshire 5000-index fund and the remaining 30 percent in an international-index fund."
2007
(270) "There is something in people; you might even call it a little bit of a gambling instinct… I tell people investing should be dull. It shouldn't be exciting. Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas."
1999
- "The Ultimate Guide to Indexing," Bloomberg Personal Finance
(366) “There is only one place to make money in the mutual-fund business - as there is only one place for a temperate man in a saloon - behind the bar and not in front of it.”
- Mutual Fund Legislation of 1967
(181) "This message (that attempting to beat the market is futile) can never be sold on Wall Street because it is in effect telling stock analysts to drop dead."
(205) "It is not easy to get rich in Las Vegas, at Churchill Downs or at the local Merrill Lynch office."
1970
(327) "Even if this advice [to portfolio decision makers] to drop dead is good advice, it obviously is not counsel that will be eagerly followed. Few people will commit suicide without a push. And fewer still will pay good money to be told to do what is against human nature and self-interest to do."
1974
- "Challenge to Judgement" The Journal of Portfolio Management, Fall 1974, p. 17-19
(328) "Perhaps there really are managers who can outperform the market consistently - logic would suggest that they exist. But they are remarkably well-hidden"
1974
- "Challenge to Judgement" The Journal of Portfolio Management, Fall 1974, p. 17-19
(329) "The debate can be put in the form of the question: Resolved, that the best of money managers cannot be demonstrated to be able to deliver the goods of superior portfolio-selection performance. Any jury that reviews the evidence, and there is a great deal of relevant evidence, must at least come out with the Scottish verdict: Superior investment performance is unproved."
1974
- "Challenge to Judgement" The Journal of Portfolio Management, Fall 1974, p. 17-19
(330) "Anyone with special abilities earns a differential return on that flair, which we economists call a rent. Those few with extraordinary P.Q. (Performance Quotient) will not give away such rent to the Ford Foundation or the local bank trust department. They have too high an I.Q. for that."
1974
- "Challenge to Judgement" The Journal of Portfolio Management, Fall 1974, p. 17-19
(331) "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."
1974
- "Challenge to Judgement" The Journal of Portfolio Management, Fall 1974, p. 17-19
(332) "First, they [those who disagree with market efficiency] simply assert that it stands to common sense that greater effort to get facts and greater acumen in analyzing those facts will pay off in better performance somehow measured. (By this logic, cure for cancer must have been found by 1955)."
1974
- "Challenge to Judgement" The Journal of Portfolio Management, Fall 1974, p. 17-19
(333) "Second, they [those who disagree with market efficiency] always claim they know a man, a bank, or a fund that does do better. Alas, anecdotes are not science. And once Wharton School dissertations seek to quantify the performers, these have a tendency to evaporate into the air - or, at least, into statistically insignificant t-statistics."
1974
- "Challenge to Judgement" The Journal of Portfolio Management, Fall 1974, p. 17-19
(176) "Forsake search for needles that are so very small in haystacks that are so very large."
1989
- Samuelson, Paul. "The Judgment of Economic Science on Rational Portfolio Management Indexing, Timing, and Long–Horizon Effects." The Journal of Portfolio Management 16, no. 1 (Fall 1989): 4-12.
(174) "But a respect for evidence compels me to incline toward the hypothesis that most portfolio decision makers should go out of business - take up plumbing, teach Greek, or help produce the annual GNP by serving as corporate executives."
1974
- "Challenge to Judgement" The Journal of Portfolio Management, Fall 1974, p. 17-19
(179) "In every mutual fund prospectus, in every sales promotional folder, and in every mutual fund advertisement (albeit in print almost too small to read), the following warning appears: "Past performance is no guarantee of future results." Believe it!"
2007
- The Little Book of Common Sense Investing by John C. Bogle
(180) "Suppose it was demonstrated that one out of twenty alcoholics could learn to become a moderate social drinker. The experienced clinician would answer, 'Even if true, act as if it were false, for you will never identify that one in twenty, and in the attempt five in twenty will be ruined.' Investors should forsake the search for such tiny needles in huge haystacks."
2007