Merton Miller Quotations

Diversification is your buddy.

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

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

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.

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.

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

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

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.