"Interview with Eugene Fama" by John Cassidy in The New Yorker

Some books have a big impact on your life.  You tend to read them more than once.  You tend to read them again after a decade. 

For me, Louis Fischer’s Gandhi was one; Ramachandra Guha's India after Gandhi was another.  

“Finance Management and Policy” by James C Van Horne was a "big impact" book.

I subscribed to its value system fully and willingly. That the objective of an enterprise is to maximize shareholder wealth seemed rational (then and now).

Particularly appealing in the book was Eugene Fama’s assertion that the share price incorporates all known factors about the economic fundamentals of the stock (and therefore the enterprise).  For an aspiring young professional, Eugene Fama appeared insightful and reasonable then. With time and experience, that conviction is diluted. Exuberance and fear do have an impact on asset price; on occasions probably in excess.

Eugene Fama does not seem to have understood that yet; and disappointed me three days back in this interview with John Cassidy published in The New Yorker.  It was reasonless identity with an ideology in the face of a reality that differs significantly! Only the Papal inquisition of Galileo exceeds this in absurdity!

Finance shall await a better messiah with more heart than brain; and more reason than belief to explain why the price of an economic asset may not always reflect just the economic fundamentals and why investors should be wary about asset price bubbles!