Bubble in Passive Investing?

[Xan]

"The Big Short’s Michael Burry Sees a Bubble in Passive Investing":

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

Thoughts?

[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/

[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.

[Xan]

Great article, Tyler.

[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...

[Xan]

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!

[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/