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:

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. (Merton Miller)
What counts is what you do with your money, not where it came from. View quote
Merton Miller
To beat the market you'll have to invest serious bucks to dig up information no one else has yet. View quote
Merton Miller
You only need to make one big score in finance to be a hero forever. View quote
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. View quote
Merton Miller
Of course. I favor passive investing for most investors, because markets are amazingly successful devices for incorporating information into stock prices. View quote
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. View quote
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. View quote
Merton Miller
Another is, if you take money out of your left pocket and put it in your right pocket, you're no richer. View quote
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. View quote
Merton Miller
Think of the firm as a gigantic tub of whole milk. The farmer can sell the whole milk as it is. Or he can separate out the cream, and sell it at a considerably higher price than the whole milk would bring. (Selling cream is the analog of a firm selling debt securities, which pay a contractual return.) But, of course, what the farmer would have left would be skim milk, with low butter-fat content, and that would sell for much less than whole milk. (Skim milk corresponds to the levered equity.) The Modigliani-Miller proposition says that if there were no cost of separation (and, of course, no government dairy support program), the cream plus the skim milk would bring the same price as the whole milk. (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. View quote
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. View quote
Merton Miller
My expertise was in public finance, particularly corporate taxation, since I had worked at the US Treasury. View quote
Merton Miller
Arbitrage proof has since been widely used throughout finance and economics. View quote
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. View quote
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. View quote
Merton Miller
I should mention that I am a member of the board of directors of Dimensional Fund Advisors. View quote
Merton Miller
Diversification is your buddy. View quote
Merton Miller
Junk bonds prove there's nothing magical in a Aaa bond rating. View quote
Merton Miller
For me, as an economist, it was frustrating to have no sense of a theory of corporate finance to tie all this material together. (Merton Miller)
My main interest, however, was in economics, not law. View quote
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. View quote
Merton Miller
I was born in Boston, Massachusetts on May 16, 1923, the only child of Joel and Sylvia Miller. View quote
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. View quote
Merton Miller