“"Any graduate of the ___ Business School should be able to beat an index fund over the course of a market cycle."
Statements such as these are made with alarming frequency by investment professionals. In some cases, subtle and sophisticated reasoning may be involved. More often (alas), the conclusions can only be justified by assuming that the laws of arithmetic have been suspended for the convenience of those who choose to pursue careers as active managers.”

— William F. Sharpe

William F Sharpe, "The arithmetic of active management." Financial Analysts Journal 47.1 (1991): 7-9.

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William F. Sharpe 4

American economist 1934

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“Any graduate of the ___ Business School should be able to beat an index fund over the course of a market cycle.”

William F. Sharpe (1934) American economist

Statements such as these are made with alarming frequency by investment professionals. In some cases, subtle and sophisticated reasoning may be involved. More often (alas), the conclusions can only be justified by assuming that the laws of arithmetic have been suspended for the convenience of those who choose to pursue careers as active managers.
William F Sharpe, "The arithmetic of active management." Financial Analysts Journal 47.1 (1991): 7-9.

“The more active working directors become, the more closely involved they resemble the executives now responsible for providing business leadership. A full-time working director is merely another official who is also a director. Wide adoption of the proposal for professional directors, particularly if management is able to select the directors itself, may merely make general the situation now found in some companies in which only the executive group is represented on the board.”

Robert Aaron Gordon (1908–1978) American economist

Source: Business Leadership in the Large Corporation (1945), p. 346-7

“My practice as a scientist is atheistic. That is to say, when I set up an experiment I assume that no god, angel, or devil is going to interfere with its course; and this assumption has been justified by such success as I have achieved in my professional career. I should therefore be intellectually dishonest if I were not also atheistic in the affairs of the world.”

J. B. S. Haldane (1892–1964) Geneticist and evolutionary biologist

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“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 (1948) economist

Source: The Four Pillars of Investing (2002), Chapter 13, Defining Your Mix, p. 246.

“If we observe the performance of only those funds that remain active, we will tend to find that the average performance of the surviving funds exceeds that of the market.”

Robert Haugen (1942–2013) American economist

Source: The Inefficient Stock Market - What Pays Off And Why (1999), Chapter 6, Counterattack-The First Wave, p. 63 (See also: Survival bias)

“If you invested in a very low cost index fund — where you don’t put the money in at one time, but average in over 10 years — you’ll do better than 90% of people who start investing at the same time.”

Warren Buffett (1930) American business magnate, investor, and philanthropist

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“[T]he free market may be a good, bad or insufficient idea, but, in any case, it is just a crude commercial code. Now it is regularly equated with or given credit for or even precedence over the freedom of man. But the freedom of man is a moral statement on the human condition, both in the practical and in the humanist sense. To equate it with a school of business is to betray a certain confusion. An unconscious unease.”

John Ralston Saul (1947) Canadian author and essayist

Voltaire's Bastards (1992)

“We have come through a strange cycle in programming, starting with the creation of programming itself as a human activity. Executives with the tiniest smattering of knowledge assume that anyone can write a program, and only now are programmers beginning to win their battle for recognition as true professionals.”

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“In fact, the nation's biggest investment pools are the retirement funds of the large corporations and governmental bodies, such as the California Public Employees Retirement System (CALPERS), which manages an astounding $170 billion. These plans receive a level of professional management that even the nations wealthiest investors can only dream of.”

William J. Bernstein (1948) economist

Source: The Four Pillars of Investing (2002), Chapter 3, The Market Is Smarter Than You Are, p. 85.

“The Social System School: Closely related to the human behavior school and often confused or intertwined with it is one which might be labeled the social system school. This includes those researchers who look upon management as a social system, that is, a system of cultural interrelationships. Sometimes, as in the case of March and Simon, the system is limited to formal organizations, using the term "organization" as equivalent to enterprise, rather than the authority-activity concept used most often in management. In other cases, the approach is not to distinguish the formal organization, but rather to encompass any kind of system of human relationships.”

Harold Koontz (1909–1984)

Source: "The Management Theory Jungle," 1961, p. 179

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