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.

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.

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.

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.

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.

... 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!