Jul 13, 2016
Videos

The efficient markets hypothesis (EMH), developed by Eugene Fama in the 1960s, simply states that prices reflect all available information. Despite its simplicity, the EMH has been difficult to test and generated decades of debate. In this video, Gene and Richard Thaler, a founding father of behavioral economics, discuss whether markets are efficient. Despite some areas of discord, Thaler sums up an important point of agreement: “Stock markets, good or bad, are the best thing we got going. So, nobody’s devised a way of allocating resources that’s better.”

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May 10, 2016
Essays

Long/Short (LS) strategies buy one equity portfolio and short another. They are often sold as a way to add a premium with special diversification benefits that arise because the premium is not highly correlated with the rest of an investor’s equity portfolio. We provide examples to show how to evaluate these claims.

 
May 5, 2016
Essays

Portable alpha is the return from an active investment strategy that has no exposure to some index, such as the S&P 500 or the Russell 2000. It is often sold as a way to get the benefits of active management at lower cost. For the moment we leave aside whether there are benefits to active management and focus on the claim about costs.

 
Apr 21, 2015
Q&A

EFF/KRF: Our strategies for choosing papers are similar. Sometimes we don’t have a choice. If we agree to referee a paper or discuss it at a conference, we are certain to read it, and we read most of the papers our colleagues write.

 
Apr 13, 2015
Videos

David Booth, chairman and co-CEO of Dimensional Fund Advisors, has been working with Eugene Fama since the mid-1960s. David was a PhD student in Gene’s class and later asked Gene to become a board member when Dimensional got off the ground in 1981. Gene is the principal scholar whose groundbreaking work inspired the firm’s founding, continues to advise the firm on many of its strategies, and is also a frequent speaker at Dimensional conferences and seminars. In this video, they discuss Gene’s early influences, the history of modern finance, the longtime collaboration between Gene and Ken French, the philosophy underlying Dimensional’s approach to investing, financial advisors, the five-factor model, Gene’s Nobel prize, and more.

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Dec 2, 2014
Q&A

EFF/KRF: There is some confusion about the interpretation of the evidence in Fama and French (2014, “A Five-Factor Model of Expected Returns”) that HML is redundant for explaining average U.S. stock returns for 1963-2013.

 
Nov 17, 2014
Essays

KRF: Gene Fama has taught us a lot over the last 50 years. In this essay, I describe some of the things Gene has taught me about doing research, writing papers, and life in general.

 
May 22, 2014
Links

EFF: I was honored to be the recipient of the American Enterprise Institute's 2014 Irving Kristol Award at their annual dinner May 6. The institute has posted a video of the dinner, which includes an interview with me conducted by Paul Gigot of the Wall Street Journal at the 20 minute mark.

 
ABOUT FAMA AND FRENCH
Eugene F. Fama
The Robert R. McCormick Distinguished Service Professor of Finance at the University of Chicago Booth School of Business
Kenneth R. French
The Roth Family Distinguished Professor of Finance at the Tuck School of Business at Dartmouth College
This information is distributed for educational purposes and should not be considered investment advice or an offer of any security for sale. This article contains the opinions of the author but not necessarily Dimensional Fund Advisors and does not represent a recommendation of any particular security, strategy or investment product. Dimensional Fund Advisors is an investment advisor registered with the Securities and Exchange Commission. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. Past performance is not indicative of future results and no representation is made that the stated results will be replicated.

Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.