indexing to the sp500 is just one index out of many. what makes it special and the "default" is because size makes it a pillar of the economic system. it also intrinsically captures the philosophy of lettings your winners run vs rebalancing out of them once they "grow up".
and also because as you sell the price goes down. it is basically impossible to fully liquidate a company while maintaining its value based on current-price X # of shares. as soon rapid liquidation starts, everything after today no longer matters.https://twitter.com/a_yawning_cat/status/1367863043472822272?s=20 …
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because hope can exponentially inflate the perceived value of a company to incredible highs, marketcap can end up overweighing allocation to hope.
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a better strategy imo is to allocate and weight based on its REAL strength as a pillar of society/economic-system. this is different than value investing which mostly measures how much hope is being poured into a company.
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both momentum and value investing are both extreme stances just like political views. value investing is correct. you cannot build a future out of wishful thinking. momentum/trend-following is correct. hope is paradoxically what the future is made out of.
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