William J. Bernstein Quotes

40 Sourced Quotes

Wall Street is littered with the bones of those who knew just what to do, but could not bring themselves to do it.

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

William J. Bernstein
Journalism attracts people with exceptional linguistic talent, but I have found that very few have the mathematical sophistication to appreciate the difference between skill and luck.

William J. Bernstein
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.

William J. Bernstein
It is one thing to coolly design a portfolio strategy on a sheet of paper or computer monitor, and quite another to actually deploy it.

William J. Bernstein
It is often said that a monkey could run an index fund. Nothing could be further fro the truth. Precisely tracking an index requires a very high degree of market savvy, discipline and nerve.

William J. Bernstein
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.

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

William J. Bernstein
The advent of modern communication technology has simply facilitated the rapid dissemination of increasingly trivial information.

William J. Bernstein
When it comes to fund managers and market strategists, this year's hero usually turns into next year's zero.

William J. Bernstein
Ninety-nine percent of what you read about investing in magazines and newspapers, and 100% of what you hear on television is worse than useless.

William J. Bernstein
The deeper one delves, the worse things look for actively managed funds.

William J. Bernstein
It's bad enough that you have to take market risk. Only a fool takes on the additional risk of doing yet more damage by failing to diversify properly with his or her nest egg. Avoid the problem-buy a well-run index fund and own the whole market.

William J. Bernstein
The reason that 'guru' is such a popular word is because 'charlatan' is so hard to spell.

William J. Bernstein
99% of fund managers demonstrate no evidence of skill whatsoever.

William J. Bernstein
There are two kinds of investors, be they large or small: those who don't know where the market is headed and those who don't know what they don't know. Then again, there is a third type of investor: the investment professional, who indeed knows he doesn't know, but whose livelihood depends upon appearing to know.

William J. Bernstein
While it is probably a poor idea to own actively managed funds in general, it is truly a terrible idea to own them in taxable accounts... taxes are a drag on performance of up to 4 percentage points each year... many index funds allow your capital gains to grow largely undisturbed until you sell... For the taxable investor, indexing means never having to say you're sorry.

William J. Bernstein
The essence of effective portfolio construction is the use of a large number of poorly correlated assets.

William J. Bernstein
Mutual fund manager performance does not persist and the return of stock picking is zero.

William J. Bernstein
It's human nature to find patterns where there are none and to find skill where luck is a more likely explanation (particularly if you're the lucky manager).

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

William J. Bernstein
If markets were truly efficient, then you shouldn't be able to make any money rebalancing.

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

William J. Bernstein
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.

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

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

William J. Bernstein
Wealthy investors should realize that they are the cash cows of the investment industry, and that most of the exclusive investment vehicles available to them - separate accounts, hedge funds, limited partnerships, and the like - are designed to bleed them with commissions, transactional costs, and other fees.

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

William J. Bernstein
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.

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

William J. Bernstein