About: This video is video #3 in a series of videos by Sensible Investing. Passive investing costs less, but produces a higher than average return after costs in the long term. Here’s how it works. Nobel Prize-winning economist William Sharpe describes his Capital Asset Pricing Model, the mathematical foundation of passive investing. Also includes an explanation of the Efficient Market Theory from Ken French, who developed the theory with Eugene Fama. Additional comment from Dan Goldie (The Investment Answer), Weston Wellington, Laurence Gosling (Investment Week), Ben Johnson (Morningstar), Tim Hale and Prof. Stephen Thomas.