William J. Bernstein Quotes

Most great financial innovators come from humble circumstances - nothing arouses fascination with financial assets quite like their absence.

In finance as in life, there is often a huge chasm between what is expected and what actually transpires.

Value stock returns are impossible to estimate using the traditional methods, because most of the excessive return arises from the slow improvement in valuations that occurs as doggy stocks become less doggy over time.

The worst possible time to invest is when the skies are the clearest.

The Gordon Equation is as close as being a physical law, like gravitation or planetary motion, as we will ever encounter in finance.

In fact, using entirely reasonable assumptions, you can make the Dow's discounted market value almost anything you want it to be.

And lest I offend art lovers, it should be pointed out that even an old master, bought from the the artist for $100 and sold 350 years later for $10,000,000, has returned only 3.34% per year.

Owning a portfolio of value stocks is the equivalent of wearing a Nehru jacket over a pair of bell bottom trousers.

When the barbarians are at the gates, interest rates rise and bond prices fall precipitously.

The rub here is that buying when prices are low is always a very scary proposition. The low prices that produce high future returns are not possible without catastrophe and risk.

At a very early stage in history we are encountering "survivorship bias" - the fact that only the best results tend to show up in the history books.

We tend to think of the stock and bond markets as relatively recent historical phenomena, but, in fact, there have been credit markets since human civilization first took root in the Fertile Crescent.

The brokerage and mutual fund business form a financial colossus that bestrides modern financial, and increasingly, social and political life.

The real reason that physicians are rotten investors is that it never occurs to them that finance is a science, just like medicine.