Our philosophy


“In investing, rely on the ordinary virtues that intelligent, balanced human beings have relied on for centuries: common sense, thrift, realistic expectations, patience, and perseverance.” - John Bogle from Common Sense on Mutual Funds

“Take, for example, the stock-market crash of October 19, 1987, during which the S&P 500 lost 23% in a single day. Since the daily standard deviation (SD) of this index is almost exactly 1%, it was a 23 SD event” - Almost Normal: Of Fat Tails, Mean Reversion, and Survival by William J. Bernstein

This time it's different are among the most costly four words in market history.” - John Templeton, March 1994

"The LTCM risk model told them that the loss they incurred on one day at the end of August 1998 should have occurred once every 80 trillion years. It happened again the following week." - Sir Howard Davies, Chairman of the UK 's FSA

"Events that models only predicted would happen once in 10,000 years happened every day for three days" - Mathew Rothman, global head of quantitative strategies for Lehman Brothers Holdings Inc., commenting in the Wall Street Journal of Aug. 11, 2007 on the week's events

“Today the only people who don't think markets work are the North Koreans, the Cubans, and the stock pickers.” - Rex Sinquefield

“We do stress tests all the time on all of our portfolios,” Kovacevich said. “We share those stress tests with our regulators. It is absolutely asinine that somebody would announce we’re going to do stress tests for banks and we’ll give you the answer in 12 weeks.” March 16, 2009 (Bloomberg) -- Wells Fargo & Co. Chairman Richard Kovacevich 

“The idea that when people see prices falling they will stop buying those cheaper goods or cheaper food does not make much sense. And aiming for 2 percent inflation every year means that after a decade prices are more than 25 percent higher, and the price level doubles every generation. That is not price stability, yet they call it price stability. I just do not understand central banks wanting a little inflation.” - Paul Volcker, former Fed chairman

"monetary levers are latently instruments of taxation" - Sir Paul Tucker, a fellow at the Harvard Kennedy School and chair of the Systemic Risk Council. Previously, he was Deputy Governor at the Bank of England

“We can never recapture the purchasing power of the dollar that has been lost. - William McChesney Martin, the longest-serving Fed chairman, in August 1955

“I can calculate the motions of the heavenly bodies, but not the madness of people” - Sir Isaac Newton on losing £20 000 in the collapse of the South Sea Company in 1720 

"It's hard to make a case to someone wealthy that you can manage their money well when you've just lost $37 billion yourself," said Dirk Hoffmann-Becking, an analyst at Bernstein Research, on UBS (WSJ, April 4, 2008; C1)

 "Effective January 27, 2006, Western Union will discontinue all Telegram and Commercial Messaging services. We regret any inconvenience this may cause you, and we thank you for your loyal patronage." – Western Union 

"Fannie and Freddie ... donate heavily to politicians who can shield them from regulation. This election the GSEs have given more than $800,000 to congressmen and senators who oversee legislation that affects them. They have also snapped up dozens of retiring lawmakers and staff as lobbyists and pay them lucrative salaries... Over the past decade, the GSEs spent at least $171 million on lobbying, which combined would make Fannie and Freddie the third-biggest lobby. This has fostered a network of co-conspirators..." - Karl Rove in July 17, 2008, WSJ

“Few men have virtue to withstand the highest bidder.” - George Washington

"Mr. Geithner, who was closely involved with the AIG bailout, offers no change ... His latest scheme is called the Public-Private Partnership Investment Program. But there is actually very little private skin in this game: It gives a handful of wealthy financiers huge nonrecourse loans to enable them to purchase toxic assets that the market supposedly won't buy at a "fair" price. As the housing crisis has shown, providing subsidized nonrecourse loans creates asset bubbles, not true price discovery. And bribing buyers to ramp up prices smacks of market manipulation." Amar Bhide

"When it becomes serious, you have to lie." Jean-Claude Junker on ethics, evidently

"I'm not aware of any overbearing sales culture." - Tim Sloan, then CFO now CEO of Wells Fargo

“It is difficult to get a man to understand something when his salary depends on his not understanding it.” - Upton Sinclair from the Introduction to Sinclair Lewis’ Main Street

It is better to be roughly right than precisely wrong.” - John Maynard Keynes

" 'What's so special about Platinum [Equity]?' asked Judge Drain. 'They're just guys in suits. Why can't the other guys in suits just pay more?' " Judge Robert Drain ordering Delphi to hold an auction and allow bids to challenge the government-brokered sale in connection with GM's bankruptcy p. A7 WSJ June 12, 2009

"To lay with one hand the power of the government on the property of the citizen, and with the other to bestow it upon favored individuals to aid private enterprises and build up private fortunes, is none the less a robbery because it is done under the forms of law and is called taxation." Supreme Court Judge Samuel F. Miller writing for the majority in Loan Association v. Topeka, 1874

"In the long history of subsidizing and regulating industries, the usual outcome has been gross inefficiency and the demand for more subsidies." - John Cochrane 

"This spring . . . the Paris-based International Energy Agency (IEA) of the Organization for Economic Cooperation and Development (OECD) reported for the first time that the peak of world oil production is in sight. Even taking into account the best efforts of the explorationists and the discovery of new fields in frontier areas like the Caspian Sea . . . sometime between 2010 and 2020 the gush of oil from wells around the world will peak at 80 million barrels per day, then begin a steady, inevitable decline, the report says." From Science magazine’s “The Next Oil Crisis Looms Large—and Perhaps Close,” Aug. 21, 1998

“If [Donald Trump] were elected, I would expect a protracted recession to begin within 18 months. The damage would in all likelihood be felt far beyond the United States.” -Lawrence Summers, Washington Post, June 6, 2016

“U.S. Is World’s Most Competitive Economy for First Time in a Decade” - Wall Street Journal headline, Oct. 16, 2018

"It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong." - Thomas Sowell

"Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone." - Claude Frédéric Bastiat

"MR. [- - - ] asked about the sensitivity of the efficient frontier to the co-variance matrix or return assumptions. MR. [ : : : ] replied that it is incredibly sensitive. MR. [- - - ] said the efficient frontier can change dramatically with just minute changes to correlations. MR. [- - - ] said that Mr. [ : : : ] has demonstrated that [consultant] is bringing qualitative and quantitative approaches to the asset allocation process, and the Board needs to understand ... Investing really is part art and part science. He said at the next meeting the Board will get to see how small changes to the correlations will dramatically change the efficient frontier. The Board needs to weigh its asset allocation decision on certain mathematical models and what the trustees think about the markets, relative to the ... Fund's goals and objectives. MR. [ : : : ] reiterated that [consultant] has always been upfront about there being a tremendous amount of reverse engineering in developing all the capital market projections. [consultant] cannot allow the outcome to be wild and crazy, relative to institutional practices generally. For example, without modifications, the model would put 30%-40% in absolute return and real estate."ALASKA PERMANENT FUND CORPORATION, extracts from the minutes of the Regular Meeting of the Board of Trustees, February 18-19, 2009

"on the basis of historical experience, the risk to the government from a potential default on GSE debt is effectively zero"  Implications of the new Fannie Mae and Freddie Mac Risk-Based Capital Standard by Robert & Peter Orszag and Joseph Stiglitz, 2002

"I don't know why anybody believes the Fed's forecast. They didn't see the biggest recession in the postwar era coming."  Paul Kasriel, Chief Economist, Northern Trust Company, as in WSJ - February 13, 2012

"another thing I must point out is that you cannot prove a vague theory wrong. [...] Also, if the process of computing the consequences is indefinite, then with a little skill any experimental result can be made to look like the expected consequences." - Richard Feynman [1964]

" a lot of our rules were written for people and not necessarily computers" - SEC Commissioner Kara Stein, April 4, 2014

"I don't make jokes. I just watch the government and report the facts." - Will Rogers

"Several years ago... a manager of a soverign wealth fund asked me how they could identify the best alt[ernative asset] funds. My response was to look for the ones that are closed." - Gus Sauter, former CIO Vanguard

"Our results indicate that volatility could be far more difficult to estimate and forecast than is generally believed." How persistent is stock return volatility?

"The markets can remain irrational longer than you can remain solvent." John Maynard Keynes

“a hundred times a day I remind myself that my inner and outer life depend on the labors of other men, living and dead, and that I must exert myself to give the same measure as I have received and am still receiving.” - Albert Einstein