He also had a profound effect on the investing world. In 1965, his paper published in Industrial Management Review found that market prices are the best estimate of value. Here are some of his words of wisdom regarding investing:
- "Investing should be dull. It shouldn't be exciting. Investing should be more like watching paint dry or grass grow. If you want excitement, take $800 and go to Las Vegas... It is not easy to get rich in Las Vegas, at Churchill Downs, or at the local Merrill Lynch office."
- "There are very few people or organizations who have any presumptive edge over a low-cost, no-load set of indices, particularly on a risk corrected basis. People used to say that you're settling for mediocrity. Isn't it interesting that the best brains on Wall Street can't achieve mediocrity?"
- "[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. Even if this advice to drop dead is good advice, it obviously is not counsel that will be eagerly followed. Few people will commit suicide without a push."
- "I don't believe we're converging on ever-improving forecasting accuracy."
- "You shouldn't spend much time on your investments. That will just tempt you to pull up your plants and see how the roots are doing, and that's very bad for the roots. It's also very bad for your sleep."
- Samuelson -- "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."
- Ross -- "The people on Wall Street simply can't imagine how they would make a living if they weren't trying to beat the market. But that's their problem, not yours. It's not your responsibility to provide livelihoods for stock analysts. What's rational on Wall Street isn't usually aligned with the best interests of you as an investor."