I did not throw out my education lightly, but what I was being taught was of no use in explaining what I saw around me. It was the Great Depression. Paul Samuelson More Quotes by Paul Samuelson More Quotes From Paul Samuelson We're a me-me-me generation. We're borrowing the savings of every nation in the world. We're ... piling up a big tab. Now, I may think we're too big to have a run on us. You may think that. But it's possible that God does not. Paul Samuelson doe running thinking An American economist of two generations ago, H. J. Davenport, who was the best friend Thorstein Veblen ever had (Veblen actually lived for a time in Davenport's coal cellar) once said: "There is no reason why theoretical economics should be a monopoly of the reactionaries." All my life I have tried to take this warning to heart, and I dare call it to your favorable attention. Paul Samuelson generations heart two Two factors explain our success. One, MIT's renaissance after World War II as a federally supported research resource. Two, the mathematical revolution in macro- and micro-economic theory and statistics. This was overdue and inevitable, MIT was the logical place for it to flourish. Paul Samuelson mit war two You could be disqualified for a job [at Harvard] if you were either smart or Jewish or Keynesian. So what chance did this smart, Jewish, Keynesian have? Paul Samuelson smart chance jobs 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 investing fans want 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. Paul Samuelson portfolios investing able 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. Paul Samuelson investing special giving Perhaps there really are managers who can outperform the market consistently - logic would suggest that they exist. But they are remarkably well-hidden. Paul Samuelson investing wells logic Forsake search for needles that are so very small in haystacks that are so very large. Paul Samuelson forsake needles investing The failure of market catallactics in no way denies the following truth: given sufficient knowledge the optimal decisions can always be found by scanning over all the attainable states of the world and selecting the one which according to the postulated ethical welfare function is best. The solution 'exists'; the problem is how to 'find' it. Paul Samuelson decision way world 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. Paul Samuelson suicide self people Marshall's crime is to pretend to handle imperfect competition with tools only applicable to perfect competition. Paul Samuelson competition tools perfect I don't care very much for the People Magazine approach to applied economics. Paul Samuelson magazines care people I spent the four years I was an undergraduate working on the beach. And it wasn't because I was lazy; it was because my freshman class would go to a hundred different employers and wouldn't get a nibble. Paul Samuelson class beach years 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.' Paul Samuelson self-confidence giving-up thinking Man does not live by GNP alone. Paul Samuelson economics doe men First, 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). Paul Samuelson common-sense cancer effort In this age of specialization, I sometimes think of myself as the last 'generalist' in economics, with interests that range from mathematical economics down to current financial journalism. My real interests are research and teaching. Paul Samuelson real teaching thinking Self-deception ultimately explains Japan's plight. The Japanese have never accepted that change is in their interest - and not merely a response to U.S. criticism. Paul Samuelson hype japan self Two-thirds of a century after [The Road to Serfdom] got written, hindsight confirms how inaccurate its innuendo about the future turned out to be. Paul Samuelson hindsight century two
