John Maynard Keynes? A. Gary Shilling? Harold R. Evensky? Apocryphal?
Dear Quote Investigator: The gyrations of financial markets can be startling. You may have unassailable information indicating that a stock is overpriced or underpriced, but you can still lose money because the market price may not accurately reflect the underlying verities for years. Here is a pertinent adage:
The market can remain irrational longer than you can remain solvent.
This saying is often attributed to the famous economist John Maynard Keynes, but I have never seen a solid citation. Would you please explore this topic?
Quote Investigator: In 1986 “The Advertiser” newspaper of Montgomery, Alabama reported on a presentation given by an influential financial advisor named Gary Shilling. Keynes was not mentioned when the aphorism was employed by Shilling. Emphasis added to excerpts by QI:[1]1986 December 3, The Advertiser (The Montgomery Advertiser), Economist Advises Change In Investment Strategy by Coke Ellington (Advertiser Business Editor), Quote Page 4B, Column 3, Montgomery, … Continue reading
A. Gary Shilling, twice named Wall Street’s top economist in a poll conducted by Institutional Investor magazine, told more than 100 guests in an AmSouth Bank meeting room that the investment situation has completely reversed itself . . .
He also warned that “markets can remain irrational a lot longer than you and I can remain solvent.”
The next earliest evidence for this saying appeared in a column by A. Gary Shilling in “Forbes” magazine in February 1993:[2] 1993 February 15, Forbes, Scoreboard by A. Gary Shilling, Page 236, Volume 151, Issue 4, Forbes Inc., New York. (ProQuest)
Above all, in 1993 remember this: Markets can remain irrational a lot longer than you and I can remain solvent.
Currently, Shilling is the leading candidate for coiner of this adage. John Maynard Keynes died 1946. He received credit for the adage by 1999. This long delay means the evidence supporting the Keynes attribution is very weak.
Here are additional selected citations in chronological order.
Continue reading The Market Can Remain Irrational Longer Than You Can Remain Solvent
References
| ↑1 | 1986 December 3, The Advertiser (The Montgomery Advertiser), Economist Advises Change In Investment Strategy by Coke Ellington (Advertiser Business Editor), Quote Page 4B, Column 3, Montgomery, Alabama. (Newspapers_com) |
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| ↑2 | 1993 February 15, Forbes, Scoreboard by A. Gary Shilling, Page 236, Volume 151, Issue 4, Forbes Inc., New York. (ProQuest) |