Merton Miller quotes

Merton Miller was an American economist renowned for his groundbreaking work in corporate finance and capital markets. His research, especially the Modigliani–Miller theorem, has profoundly influenced financial theory and practice. He was awarded the Nobel Prize in Economic Sciences for his contributions to the field. Here are 25 of his quotes:

What counts is what you do with your money, not where it came from.

Merton Miller

To beat the market you'll have to invest serious bucks to dig up information no one else has yet.

Merton Miller

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

Merton Miller

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.

Merton Miller

Of course. I favor passive investing for most investors, because markets are amazingly successful devices for incorporating information into stock prices.

Merton Miller

So everybody has some information. The function of the markets is to aggregate that information, evaluate it, and get it incorporated into prices.

Merton Miller

When I started worrying about stocks, it was the late 1930s and early 1940s and it didn't seem like a good way to make money then, either.

Merton Miller

Another is, if you take money out of your left pocket and put it in your right pocket, you're no richer.

Merton Miller

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

Merton Miller

What is the "cost of capital" to a, firm in a world in which funds are used to acquire assets whose yields are uncertain; and in which capital can be obtained by many different media, ranging from pure debt instruments, representing money-fixed claims, to pure equity issues, giving holders only the right to a pro-rata share in the uncertain venture? This question has vexed at least three classes of economists: (1) the corporation finance specialist concerned with the techniques of financing firms so as to ensure their survival and growth; (2) the managerial economist concerned with capital budgeting; and (3) the economic theorist concerned with explaining investment behavior at both the micro and macro levels.

Merton Miller

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.

Merton Miller

My expertise was in public finance, particularly corporate taxation, since I had worked at the US Treasury.

Merton Miller

Arbitrage proof has since been widely used throughout finance and economics.

Merton Miller

What happened after publication of our paper was that, for the next 40 years, people said, all right, we now know the answer to the capital structure question under ideal conditions.

Merton Miller

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.

Merton Miller

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

Merton Miller

Diversification is your buddy.

Merton Miller

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

Merton Miller

My main interest, however, was in economics, not law.

Merton Miller

I can't speak for them, of course, but I believe that most economists would accept the view that, while you sometimes can make a score by sheer luck, you can't do it constantly, unless you're willing to put the resources in.

Merton Miller

I was born in Boston, Massachusetts on May 16, 1923, the only child of Joel and Sylvia Miller.

Merton Miller

My research interests since then have shifted strongly towards the economic and regulatory problems of the financial services industry, and especially of the securities and options exchanges.

Merton Miller