The wit and wisdom of Eugene Fama

…in hindsight, every price is wrong.

That’s Eugene Fama, from Fama vs. Thaler.  I enjoyed this part too:

Twenty years ago my criticism of behavioral finance was that it is really just a branch of efficient markets, because all they do is complain about the efficient-markets model. I’m probably the most important behavioral-finance person, because without me and the efficient-markets model, there is no behavioral finance. I still think there is no full-blown testable behavioral asset-pricing model.

I have more sympathies for behavioral finance than that, still the dialogue is worth reading in its entirety.  Judged as a debate, Thaler loses.

Hat tip goes to Allison Schrager.


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