Category Archives: A. Gary Shilling

The Market Can Remain Irrational Longer Than You Can Remain Solvent

John Maynard Keynes? A. Gary Shilling? Harold R. Evensky? Apocryphal?

Dear Quote Investigator: The gyrations of financial markets can be startling. I am reminded of the following words of wisdom attributed to the economist John Maynard Keynes:

The market can remain irrational longer than you can remain solvent.

Supposedly Keynes said this after he performed a series of highly leveraged trades, and he was humbled by the market. But I have been unable to find any evidence of this maxim before the 1990s. Since you explored another Keynes saying in February I am hoping this one might interest you.

Quote Investigator: Master linguistics researcher Barry Popik and the volunteer editors of WikiQuote have located crucial citations for this quotation [BPRI][WQMK].

The earliest known evidence for this saying appeared in a column by A. Gary Shilling in Forbes magazine in February 1993. Keynes was not mentioned when the aphorism was employed by Shilling [AGSF]:

Above all, in 1993 remember this: Markets can remain irrational a lot longer than you and I can remain solvent.

The journalist Jason Zweig was working at Forbes in 1993, and he believes that he heard the expression “numerous times” before Shilling’s column appeared. He thinks the phrase was in use by the late 1980s [JZFJ]. So Shilling may not be the originator though his name is connected to the earliest and strongest written evidence.

Another remark that has been credited to Keynes for decades may have influenced the attribution of this statement:

There is nothing so disastrous as a rational investment policy in an irrational world.

There is a conceptual overlap between these two quotations, and they share the focal word “irrational.” The reassignment of the statement from Shillings to Keynes may have been facilitated by the existence of this earlier saying. This link leads to the previous blog post exploring this alternative comment.

Here are additional selected citations in chronological order.

Continue reading