Quotes on Beta

Alpha children wear grey. They work much harder than we do, because they're so frightfully clever. I'm awfully glad I'm a Beta, because I don't work so hard. And then we are much better than the Gammas and Deltas. Gammas are stupid. They all wear green, and Delta children wear khaki. Oh no, I don't want to play with Delta children. And Epsilons are still worse. They're too stupid to be able to read or write. Besides they wear black, which is such a beastly color. I'm so glad I'm a Beta.

Ben's Mr. Market allegory may seem out-of-date in today's investment world, in which most professionals and academicians talk of efficient markets, dynamic hedging and betas. Their interest in such matters is understandable, since techniques shrouded in mystery clearly have value to the purveyor of investment advice. After all, what witch doctor has ever achieved fame and fortune by simply advising 'Take two aspirins'?

Given enough eyeballs, all bugs are shallow (e.g., given a large enough beta-tester and co-developer base, almost every problem will be characterized quickly and the fix obvious to someone).

To invest successfully, you need not understand beta, efficient markets, modern portfolio theory, option pricing or emerging markets. You may, in fact, be better off knowing nothing of these. That, of course, is not the prevailing view at most business schools, whose finance curriculum tends to be dominated by such subjects. In our view, though, investment students need only two well-taught courses - How to Value a Business, and How to Think About Market Prices.

When I was 16 years old, I assembled a 2.3 million electron volt beta particle accelerator. I went to Westinghouse, I got 400 pounds of translator steel, 22 miles of copper wire, and I assembled a 6-kilowatt, 2.3 million electron accelerator in the garage.

Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often, though, investors forget to examine the assumptions behind the models. Beware of geeks bearing formulas.