Merton Miller quotes:

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.

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

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

My research interests since then have shifted strongly towards the economic and regulatory problems of the financial services industry, and especially of the securities and options exchanges.

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

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

Diversification is your buddy.

Another is, if you take money out of your left pocket and put it in your right pocket, you're no richer.

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

Junk bonds prove there's nothing magical in a Aaa bond rating.

... 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!

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. It's a game, it's a chance operation, and people think they are doing something purposeful... but they're really not.

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

My main interest, however, was in economics, not law.

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

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.

Of course. I favor passive investing for most investors, because markets are amazingly successful devices for incorporating information into stock prices.

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

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

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