Passive Investing Is Worse for Society Than Marxism

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Xan
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Passive Investing Is Worse for Society Than Marxism

Post by Xan » Tue Aug 23, 2016 2:32 pm

In a note titled "The Silent Road to Serfdom: Why Passive Investing is Worse Than Marxism," a team led by Head of Global Quantitative and European Equity Strategy Inigo Fraser-Jenkins, says that politicians and regulators need to be cognizant of the social case for active management in the investment industry.
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https://finance.yahoo.com/news/bernstei ... 59790.html
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Kbg
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Re: Passive Investing Is Worse for Society Than Marxism

Post by Kbg » Tue Aug 23, 2016 3:00 pm

Says the guy whose business model is crumbling more rapidly everyday. Capital doesn't flow to any of the crap he mentions. It flows to where people perceive the highest returns are going to be. That's never going to change in a relatively free capitalist system. His problem is the market has made a call on the "average" hedge fund and now he wants government help. Honestly, at one level I can't blame his feelings. Whether a poor working class Trumpster or this guy, capitalism is great until you find yourself in its crosshairs. Truly value added active managers, Hedgies and VCs aren't going anywhere. The change is you actually have to be good/worth your fee now. Low return rates combined with their high overhead rates has simply put a big spotlight on them. Much easier to skim 2/20 when the interest rate for Corp bonds is 6% and riskier returns are double digits.

If you are a Joe/Barbara Sixpack investor, thank Jack Bogle and Vanguard every day even if you have no money with them.
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Re: Passive Investing Is Worse for Society Than Marxism

Post by sophie » Wed Aug 24, 2016 6:34 pm

;D ;D ;D ;D ;D

OK, I've got my breath back now. Let me sum up the message:

"We believe that active managers are better at picking productive companies. Never mind the decades of data that clearly show this isn't this case, and that we are carefully not mentioning. If you disagree with us, you must be a Communist. You should also ignore the giant conflict of interest that is involved here, i.e. that my livelihood depends entirely on your continuing to throw your hard-earned money at active managers."
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Re: Passive Investing Is Worse for Society Than Marxism

Post by MachineGhost » Wed Aug 24, 2016 7:29 pm

Facts Destroy Cult of Wall Street! News at Eleven!
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
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Kbg
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Re: Passive Investing Is Worse for Society Than Marxism

Post by Kbg » Wed Aug 24, 2016 8:07 pm

There is also the skill paradox going on. As more investors move to indexing and as active managers go out of business the guys/gals left are better and they are competing against the remaining "better" which makes it harder to be "better" than the "better" average. Everyone follow that?

:D
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Re: Passive Investing Is Worse for Society Than Marxism

Post by dualstow » Thu Sep 01, 2016 12:49 pm

Pay no attention to the man behind the curtain, but by all means continue to give him his 1.5% fee.
Gold has passed 1645/oz
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