17 Incredible Merton Miller Quotes

Merton Miller was an American economist, having shared the Nobel Memorial Prize in Economic Science in 1990. Spending most of his academic career at the University of Chicago’s Booth School of Business, Miller’s work contributed to the basis of the ‘Modigliani-Miller Financial Theory.’ Here is a look at some of the most memorable Merton Miller quotes ever recorded.

“Any pension fund manager who doesn’t have the vast majority-and I mean 70% or 80% of his or her portfolio-in passive investments is guilty of malfeasance, nonfeasance or some other kind of bad feasance!”

“Arbitrage proof has since been widely used throughout finance and economics.”

“As an economics undergraduate, I also worked on a part-time basis in Cambridge, Massachusetts, for a company that was advising customers about portfolio decisions, writing reports.”

“But in practice, if often comes down to not suffering a loss as big as the huge gain you made a while ago.”

“Diversification is your buddy.”

“Everybody has some information. The function of the markets is to aggregate that information, evaluate it and get it incorporated into prices.”


“Everyone recognizes that’s a joke because obviously the number and shape of the pieces doesn’t affect the size of the pizza. And similarly, the stocks, bonds, warrants, etc., issued don’t affect the aggregate value of the firm.”

“I favour passive investing for most investors, because markets are amazingly successful devices for incorporating information into stock prices.”

“I had some of the students in my finance class actually do some empirical work on capital structures, to see if we could find any obvious patterns in the data, but we couldn’t see any.”

“I should mention that I am a member of the board of directors of Dimensional Fund Advisors.”

“If there’s 10,000 people looking at the stocks and trying to pick winners, one in 10,000 is going to score, by chance alone, a great coup, and that’s all that’s going on.”

“Junk bonds prove there’s nothing magical in a Aaa bond rating.”

“Most people might just as well buy a share of the whole market, which pools all the information, than delude themselves into thinking they know something the market doesn’t.”

“My expertise was in public finance, particularly corporate taxation, since I had worked at the US Treasury.”

“To beat the market you’ll have to invest serious bucks to dig up information no one else has yet.”

“What counts is what you do with your money, not where it came from.”

“You only need to make one big score in finance to be a hero forever.”

Here is one video related to Merton Miller and featuring Harry Markowitz, the father of Modern Portfolio Theory.

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