John Maynard Keynes Quotes

The markets are moved by animal spirits, and not by reason.

History demonstrates that participants in financial markets are susceptible to waves of optimism. Excessive optimism shows the seeds of its own reversal in the form of imbalances that tend to grow over time.

If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.

You don't want too much fear in a market, because people will be blinded to some very good buying opportunities. You don't want too much complacency because people will be blinded to some risk.

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

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

…in a crisis of confidence and credit, psychology is the big factor.

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.

The lesson of 2008 is that ultimately our markets are driven by confidence.

Every now and then, markets behave like schoolchildren. They overreact, they run around like crazy.

When investing, pessimism is your friend, euphoria the enemy.

I've always been sceptical about the notion that the market is a person you can engage in an argument with, and that that person is an intelligent, rational, well-intentioned person: it is fantasy. We know that ... the market is subject to irrational optimism and pessimism, and is vindictive ... You're dealing with a crazy man ... Having got what he wants he will still kill you.

It's a funny thing, by the way, how people who love free markets are also quite sure that they know that investors are being irrational.

The investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage.

Mr. Market is kind of a drunken psycho. Some days he gets very enthused, some days he gets very depressed. And when he get really enthused you sell to him, and if he gets depressed, you buy from him. There's no moral taint attached to that.

Be fearful when there is greed and be greedy when there is fear.

It seems to me that at least as far as the financial markets are concerned, there is increasing evidence against rational expectations, even at the macro level.

Those who had been riding the upward wave decide now is the time to get out. Those who thought the increase would be forever find their illusion destroyed abruptly, and they, also, respond to the newly revealed reality by selling or trying to sell. And thus the rule, supported by the experience of centuries: the speculative episode always ends not with a whimper but with a bang.

The stockmarket is a semi-psychotic creature given to extremes of elation and despair.

Be fearful when the markets get greedy, be greedy when the markets get fearful.

Bubbles and crashes are textbook examples of collective decision making gone wrong. In a bubble, all of the conditions that make groups intelligent - independence, diversity, private judgement-disappear.

The Stock Exchange is something very different. There is no economy and no production of goods and services. There are only fantasies in which people from one hour to the next decide that this or that company is worth so many billions, more or less. It doesn't have a thing to do with reality or with the Swedish economy.

Remember that the stock market is manic-depressive.

To some extent, stocks are like Rembrandts. They sell based on what they've sold in the past. Bonds are much more rational. No-one thinks a bond's value will soar to the moon.