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Bubble in Passive Investing?

Posted: Thu Aug 29, 2019 2:24 pm
by Xan
"The Big Short’s Michael Burry Sees a Bubble in Passive Investing":

https://www.bloomberg.com/news/articles ... -investing

Thoughts?

Re: Bubble in Passive Investing?

Posted: Thu Aug 29, 2019 2:27 pm
by Tyler
I really enjoyed Josh Brown's rebuttal. In short, passive investing is nothing new -- it's the historical norm.

"The Real Bubble Has Always Been in Active Management"

https://thereformedbroker.com/2019/08/2 ... anagement/

Re: Bubble in Passive Investing?

Posted: Thu Aug 29, 2019 2:34 pm
by Kriegsspiel
I'm not a passive investor! I let the good people at the Center for Research in Security Prices and FTSE Russell pick companies for me.

Re: Bubble in Passive Investing?

Posted: Thu Aug 29, 2019 4:42 pm
by Xan
Great article, Tyler.

Re: Bubble in Passive Investing?

Posted: Sat Aug 31, 2019 6:00 pm
by Smith1776
I'm quite conflicted on the issue because I quite like Michael Burry. However, I think that may be cognitive bias because I think I "know" him thanks to Christian Bale in the movie.

On the other hand, I did read up on him extensively after watching The Big Short. His insights into value investing and his old forum posts were quite great.

I don't buy the premise there's a bubble in passive investing, but I probably lend that viewpoint slightly more weight coming from him...

Re: Bubble in Passive Investing?

Posted: Sun Sep 01, 2019 4:13 pm
by Xan
Smith1776 wrote:
Sat Aug 31, 2019 6:00 pm
I'm quite conflicted on the issue because I quite like Michael Burry. However, I think that may be cognitive bias because I think I "know" him thanks to Christian Bale in the movie.

On the other hand, I did read up on him extensively after watching The Big Short. His insights into value investing and his old forum posts were quite great.

I don't buy the premise there's a bubble in passive investing, but I probably lend that viewpoint slightly more weight coming from him...
Past performance is no guarantee of future results!

Re: Bubble in Passive Investing?

Posted: Sun Sep 01, 2019 11:49 pm
by boglerdude
Nothing wrong with indexing, unless its something indirect like people thinking stocks are safe now because they cant lose it all on a single bankruptcy. And Im not sure PE measurements are adjusting for buybacks. There is a persistent human bias to not want to buy companies with bad press (value). But then, if everyone knows that, they'll overpay for value. Vanguard small value is PE 24, total market is 24.5. Value doesnt look like a bargain.

https://www.reddit.com/r/investing/comm ... bubble_in/