Also, general broad belief in passive investing seems to have slowly eroded over the last decade to the point where no serious pro investor I know seems to unqualified recommend it anymore. But Malkiel himself seems to think pandemic has changed nothinghttps://www.ai-cio.com/news/active-funds-still-losers-malkiel-says/ …
I did not miss that point. I understand how indices work and how analysts affect things. I'm saying investing more in a stock already represented in a cap-weighted way in an index is a way to bet that the market is efficient but *wrong*
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If a million analysts all share the same wrong assumption that is undermined, then the 2 billion hours of analysis they've put into driving the market to its current efficient "equilibrium" can be undermined by that one wrong assumption being recognized. Effort != value.
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Covid is the market equivalent of a cache invalidation or a branch prediction error. A lot of assumptions have been suddenly invalidated. A lot of intelligence encoded in the previous equilibrium have been undermined in ways that are still being processed.
End of conversation
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