Alan Greenspan Quotes

I believe, in the stock market - that's one of my fields - that most people are irrational. And to be irrational, you can be irrational in so many different ways that, practically, the result is indeterminate.

Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed.

All market response results from a reduction of uncertainty.

The economy is a collection of emotions.

While neurological studies have tried to identify components responsible for fear and greed, the impact on finance is less clear.

Most investors give too much credence to the theory that prices are rational; they presume that a market collapse must have been justified by serious economic trouble.

The older I get, the less respect I have for the signals emitted by our vaunted speculative markets.

Financial markets have a tendency to go to excess.

Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.

Tastes and behavior are important in economics. Nobody denies that. But the question is: How much of behavior is irrational, and how much of the irrational behavior really affects prices? It turns out that's very difficult to answer.

As I have said before, the daily machinations of the stock market are like a tale told by an idiot, full of sound and fury, signifying nothing.

I've explained before the power psychology has on the markets.

I can measure the motion of bodies but I cannot measure human folly.

Wild swings in share prices have more to do with the "lemming- like" behaviour of institutional investors than with the aggregate returns of the company they own.

The possibility that stock value in aggregate can become irrationally high is contrary to the hard-form "efficient market" theory that many of you once learned as gospel from your mistaken professors of yore. Your mistaken professors were too much influenced by "rational man" models of human behavior from economics and too little by "foolish man" models from psychology and real-world experience.

Fear and euphoria are dominant forces, and fear is many multiples the size of euphoria. Bubbles go up very slowly as euphoria builds. Then fear hits, and it comes down very sharply. When I started to look at that, I was sort of intellectually shocked. Contagion is the critical phenomenon which causes the thing to fall apart.

I can calculate the motion of heavenly bodies, but not the madness of people.

I always found the appeal to the market gods a bit odd. Why would the market fix mistakes instead of aggravating them?

The market is incredibly inefficient and capable on rare occasions of being utterly dysfunctional. And people have a really hard time getting their brain around that fact. They want to believe that it's approximately efficient almost all the time, and it simply isn't true.

I would say that financial markets are very inefficient, and capable of extremes of being completely dysfunctional.

The main purpose of the stock market is to make fools of as many men as possible.

Markets as well as mobs respond to human emotions; markets as well as mobs can be inflamed to their own destruction.

Markets are self-regulating only because some brave investors are prepared to bet against the market trend.

Nowhere does history indulge in repetitions so often or so uniformly as in Wall Street.

I don’t know why the Stock Market does what it does.