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The small investor can now, for the first time, invest in common stocks and bonds in an efficient and convenient way. I am talking about people who d… - Paul Samuelson
" "The small investor can now, for the first time, invest in common stocks and bonds in an efficient and convenient way. I am talking about people who don't have $ 10 million; who don't want to take unnecessary gambles; who operate under no Napoleonic delusions of being able to pick winners that will quadruple their money; who begrudge every minute devoted to keeping tax and personal records, and wish to think about their investments only at New Year's and when preparing their tax returns. Disinterested experts in finance prescribe for such people as follows: 1. Depending on your tolerance for the irreducible risks involved in owning common stocks, decide what portion of your nest egg you wish to keep in common stocks: 0, 100, 30 or 70 per cent. No one can decide this for you. You must decide at what point you'll sleep best at night, and whether eventually stocks will provide a better inflation hedge than they have done these last dozen years. ( Many will settle for 50-50. ) 2. For what common stocks you do decide to own, follow the golden rules of prudence : Diversify broadly, hold down costly turnover, keep all fees (and book- keeping !) minimal. 3. The same rules (diversification, etc.) apply to your holdings of tax-free and ordinary bonds. If you have taxable income of $ 20,000 or more, probably the bulk of your bonds should be " municipals " -i.e., state and local issues that escape all Federal tax because Congress refuses to close this loophole. Less affluent people will probably do as well in local savings accounts as in anything else. Now you know what to do. How do you do it?
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About Paul Samuelson
Paul Anthony Samuelson (May 15, 1915 – December 13, 2009) was an American economist. He was the first American to win the Nobel Prize in Economics.
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Paul Anthony Samuelson
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Paul A. Samuelson
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Additional quotes by Paul Samuelson
Yes, Keynes was a genius. Yes, some of his ideas were inchoate and would not have lent themselves usefully to diagramming and symbolic manipulation. Yes, by the time of the Radcliffe committee many of his British admirers were still frozen in the Model T version of his system. And yes, Keynes resented excessive simplifying of his paradigms.
Nevertheless, in science it is not the incoherent, inchoate and ineffable that has a cash value. If that were so, Goethe would be a greater scientist than either Einstein or Newton. What matters is the Kuhnian paradigm that people who are not geniuses can use. That which so many scholars independently agreed upon cannot be independent of the text that Keynes wrote down for them to read. What is remarkable is not the cogency of the case that Leijonhufvud manages to muster, which is rather flimsy, but rather how strong was the latent demand in the 1970s for a work to debunk Keynesianism. Harry Johnson put the same point in a different way.
The vogue of vulgar and vague Coaseism, one hypothesizes, is strongest among libertarians and other devotees of laissez-faire who believe to find in it ammunition against regulation and voters' activism. Whether this hypothesis is close to or wide off the mark is of no importance. What does matter is how much deadweight-loss obtains in real life.
Well, I'd say, and this is probably a change from what I would have said when I was younger: Have a very healthy respect for the study of economic history, because that's the raw material out of which any of your conjectures or testings will come. And I think the recent period has illustrated that. The governor of the Bank of England seems to have forgotten or not known that there was no bank insurance in England, so when Northern Rock got a run, he was surprised. Well, he shouldn't have been.
But history doesn't tell its own story. You've got to bring to it all the statistical testings that are possible. And we have a lot more information now than we used to.
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