To be clear, Malkiel is primarily against "active investing" in sense of pro traders charging commissions to do more active trading esp. in volatile times. I'm suggesting something more milquetoast: hold a few long positions to slightly distort a basic index/passive approach.
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.
Thanks. Twitter will use this to make your timeline better. UndoUndo
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I can see why you feel this way. I guess I have a quite dramatic difference of opinion. The analysts are, collectively, a gigantic meatspace ensemble model with a lot fo computing power. Departing from their projection is by definition a contrarian view, with attendant risk.
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But I would like to hear you flesh out why you believe this way of thinking makes sense even though it defies traditional investing wisdom. You would also need to address the very real issue of hindsight bias.
End of conversation
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