Harvey
Administrator
- Joined
- Jul 15, 2020
Can't convince me.
The conundrum of the market:
Never pay a stock picker as the TSM beats the vast majority of stock pickers, over time.
But without stock pickers, the market ceases to function.
Market Philosophy
- Thread starter JTG
- Start date
The conundrum of the market:
Never pay a stock picker as the TSM beats the vast majority of stock pickers, over time.
But without stock pickers, the market ceases to function.
DomB
Well-known member
- Joined
- Aug 25, 2020
Great point. I believe toward the end of his life, Bogle / father of modern index investing actually came out and admitted this eventually could be an issue, but index investing would need to be a really big piece of the market. I don't remember the point at which he thought it could happen vs. where we are now. Index investing has exploded in the past (20? 30?) years.
Harvey
Administrator
- Joined
- Jul 15, 2020
A quick google gives me a range on the percentage of total market held in index funds, showed me two results, one was 18% and the other was about 50%. What's the real number?
If it's really 18% my guess is no worries, for a while.
As an individual, what do you do? Not sure it's logical for me personally not to hold index funds, just because of a potential market malfunction.
If it's really 18% my guess is no worries, for a while.
As an individual, what do you do? Not sure it's logical for me personally not to hold index funds, just because of a potential market malfunction.
Harvey
Administrator
- Joined
- Jul 15, 2020
Thinking about this, the market DEPENDS on or REQUIRES the hubris
of the people who think they can be consistently be among the 5%. The market demands their existence.
DomB
Well-known member
- Joined
- Aug 25, 2020
Here's another take on it - the issue that index funds can vote their shares at annual meetings --- ie we have to trust them to vote correctly/they have a lot of power. I never really thought about that . . . .
Harvey
Administrator
- Joined
- Jul 15, 2020
I don't really care about this and won't respond to it (financially) in any way, but I thought it was interesting.
www.barrons.com
The Nasdaq Is Acting Strange. What That Means for Stocks.
The biggest divergence between the Dow and the Nasdaq came in the middle of the bear market that was caused by the bursting of the dot-com bubble.
www.barrons.com
x10003q
Well-known member
- Joined
- Jul 21, 2020
Interesting observation - but coming out of a year long pandemic might skew the hypothesis.I don't really care about this and won't respond to it (financially) in any way, but I thought it was interesting.
The Nasdaq Is Acting Strange. What That Means for Stocks.
The biggest divergence between the Dow and the Nasdaq came in the middle of the bear market that was caused by the bursting of the dot-com bubble.
There’s some blah blah blah but here ya go.
Stocks end higher as investors jump in after big sell-off
The Dow Jones Industrial Average was down 1,000 points Monday before a major rally in the afternoon.
www.kcentv.com
MC2
Well-known member
- Joined
- Jul 22, 2020
Either a buy-the-dip rally or a dead cat bounce… depending on your opinion of where the market is headed.
I think there is a lot of money on the sidelines and a lot of people ready to buy things (including stocks) when they believe that they are getting a bargain. (And I think stocks are a bargain right now…. Especially if corporate tax rates remain low).
