What i took away from it: Don’t try to diversify too much to the point where you are investing in things your not sure of. Stick with a few things that you understand well and why you are investing.
+Jonathan What many call diversification is nothing more than throwing as many bits of mud as possible in the hope that some stick in the wall. Good diversification means limited levels that are distributed enough that they do not disappear. Hence the reason why Benjamin Graham believe in hold a certain amount of Bonds in a portfolio.
I took away from it 3 things: you absolutely do want to diversity by putting your money in an index fund. Only try to invest in single stocks if you are warren buffett or Charlie Munger. Do not let some dumbass investment advisor tell you that you need to pay them 1 percent annual fee when they can't do better than a fully diversified index fund.
"I'm right and they're wrong" sounds so different coming from a 90's year old man than a 20-something year old. His story about "grandfather" telling him about his experiences resonates with me, I was fortunate enough to have 3 great-grandmothers and 3 sets of grandparents to hear stories from as a grew up. Many of those lessons still influence my decision making today. Something I have learned: Not everything that is new is better.
It's important to note that investing in indexes / just going with the market is a perfectly viable way to invest for most people. Most of us like to think we understand whatever our area of expertise is but realistically we don't understand it as well as we think we do. Diversification will lead to average results but its also safer which is honestly what most of us need.
@@fanelemabaso2514 both obviously - you can't make money if you lose money... First objective is to avoid anything that will likely lose money. Then from the remainder, select the best idea to make money.
Not financial advice here but following from Nassim Taleb's work it might be rational to try to put most of one's portfolio into index funds and allocate a smaller portion to those, "domain expert picks" that one finds worthwhile. You get the upside if those stocks do well but you still get the sustained, low-risk gains that come from index investing.
Li Lu was able to grow Munger's 8 million dollars to $500 millions in 15 years (30% CAGR). Himalaya fund. Charlie Munger called Li Lu Chinese Warren Buffett. Li Lu is really a very low profile guy.
A wonderful investment idea is like stumbling on buried treasure. A wise man would plunder the find and keep his trap shut; Buffett and Munger never talk about the investments they're about to make. Buried treasure is hard to find. Unless, you're a snake oil salesman like Jim Cramer.
Daniel David ah yes, BUT buffetts genius is to tell everyone to buy an S&P500 index fund (while he owns huge positions in these companies) It is brilliant
Warren Buffett has mastered what patience looks like. He has stuck to the markets, having a long term view on the markets. This is what I'm struggling to do, trying to learn how to not react to market news about inflation and all. I have currently set aside about $553k to put in the market now that prices are down. Any ideas?
@Brilliantrans Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
Index funds.. Charlie even stated in this video 99% don’t beat indexing. That 1% that he is referring to that has the potential to beat the spy 500 over the longterm are investors like Charlie and Warren.
Can someone here explain me how he got to know and understand business terms, finances, etc. just before living law practice? I have also a law degree and i would love to have a similar path but i struggle to get started on the business things… Does someone have a tip?
Mr Munger has studied Math in his undergrad and then he studied Meteorology in his service career at Second World War- least to mention that he did very well in the law school too. Beside that he is also an avid reader. I think all these factor makes him a rational player in the market.
8:15 "They (money managers) just can't do what the profession is trying to do, which is get better than average results" Well, it would be pretty impressive if the average allocator got a better than average result
I think the market will crash the day they pass away. They have so much influence on the investors all around the world. I'm from Russia and Buffet and Munger are my role models.
On a basic level the market is a zero sum game where the average is established by the aggregate of ‘best ideas’ so the example is a bit nonsensical since a representative slice of the market isn’t going to be anything other than the average. There seems to be a reluctance for him to acknowledge that he ( and by extension Berkshire) are part of the same phenomenon where their stock picks aren’t adding enough value to beat the index.
The S&P 500 in 2008 was worth 1500 and today it is worth 3093 (13/11/2009) that amounts to an average rate of growth of 6.8%. Berkshire Hathaway in 2008 was worth $113,000 and is now worth 331,000 (13/11/2019) which amounts to a growth rate of 10.13%. They have massively out performed the market place. If you were buying after the crash you would have greater gains with the S&P but you would to be timing that growth to get such spectacular gains.
High IQ people find a need to partake in activities that require their intelligence to be actively utilised. the more you can do, the greater the urge you feel to participate.
Life is like a crap sandwich. The more bread you have the less crap you eat. Charlie has all bread and nobody dares to pull political correctness on him.
I think you have to learn to note that it's not what people say but what they do : Berkshire Hathaway is the most diversified conglomeration of companies out there. They own banks, railroad companies, aeroplane companies, tech shares - Apple (IBM before), candy and burger and carpet and real estate stores to name a few. So when Munger says, we stick to what we know, and yet Berkshire holds stocks in companies from A - Z then what's he's saying is a bunch of NONSENSE.
That is a consequence of two things. Firstly, Buffett doesn't have opportunities to sink serious portions of his capital into single companies; and secondly, it took nearly a century to build out his knowledge to the level that he can be invested that broadly. Look at the concentration as well, Berkshire is 90% insurance/finance, energy/BNSF, and consumer non-durables. If you look at Munger's DJCO portfolio, he owns 5 stocks--3 of which hold 95% of the total weight.
There are people who have had death experiences (been pronounced deceased) and then have actually come back to life, and they say that they felt a wonderful feeling of love or of God's love among other experiences they had. It looks like it is worth asking some questions about why we are living this life here, where we came from before it and where we are going after this life. There are some great and very relevant answers to know that God has given us in scripture, let me know if I can share and I hope to get back to anyone.
The trade market just like any other financial institution requires a lot of time and expertise to yield fruits. This videos go a long but with the amount of profit I've been Making I prefer the one on one lessons from an pro analyst. While learning and earning I've come to realize the benefits and necessity of having a pro analyst handling trades of newbies and struggling traders. Nothing can pay up for those years of skill mastering. Kudos Noud I'm making six figures this year.
Maybe that's where I went wrong trying out something I have no experience of, I've spent several thousands on the market without any profit. Please from one trader to another. How do I get to where you are? What's your strategy?
As a newbie I struggled with stock picking and entry points that cost me a lot till I partnered with a licensed, bloomberg acknowledged analyst and now I’m a dividend investor I invested in the s&p500,both through my TSP with the government, and through Fidelity in my 401k,cashed out 310k from the S&P.I invest with Mr Noud Mika too,He's my full service broker.I currently have a million in my tax deferred savings and around $1.1 million in my portfolio under speculation and management from Noud
You make it sound easy. I've been trading for a while and coming across licensed pros like this isn't easy you know. Most rich folks don't recommend their broker to others. I won't pass up this opportunity, If you could be so kind to share his contact, I'd love to have me trades placed by a pro
I come up with solutions to issues that people are currently facing on an ad hoc basis - that has produced great ideas, but the most important thing in many cases is just getting that important issue resolved. :) Nice video - Charlie and Warren are nice guys. :)
Different field cannot says means Suppose that accounts jobs, trading, manufacturing, supply out of station, Job,s , self industries ,cad/cam(design and programming all type mould at software's) Don't mind please
Index fund is a huge dangerous bubble that’s basically what he said!!! index fund is created to out preform average stock firm but their stock price is way above their potential value. It a bubble going to pop in the future!!!
...glossed over..."take it away from the Indians"...even though he talks very slow , you can tell he caught what he said because his speech slowed even more to regroup...western mindset at its best...the history books will say "made a good investment"...to control the narrative
He said they were trying to do too much, whereas Warren and Berkshire do less. Those at the investment counseling shop were trying to "study a million things"
It's got to feel natural. Many people will try and fail to be like Warren buffett because it doesn't come naturally to them. Be you. Be original and what happens will happen.
Tien Doan wrong! He was never born into an upperclass family. He just worked all his life and started investing at the age of 13. Quite some difference to all of us here I think!?
It depends how you use it. For example, in Kramer’s case. Personally, to create ideas or considerations, is why I tune in. Bloomberg more cold, therefore cannot be rationally creative, analogously with musak as opposed to my cnbc.
Buffett hasn't outperformed the market over the past 5 years (maybe more). In fact, Berkshire stock has been flat for over a decade in some periods. This is not to take away from Warren's success, but saying he's still outperforming the market is not valid. Naturally, his biggest constraint is Bershire's sheer size.
At the tail end he says that if everyone did it, index investing won't work. I know Michael Burry doesn't like them either. Does anyone know what he's talking about?
High level, indexing rides on the coattails of active managment. Imagine 99 active managers buying and selling, and you are the 100th who just buys the whole market. You have 99 people, granted some less intelligent than others, but still 99 people with huge teams and algorithms and research and often even insider knowledge, that are creating real price discovery through buying and selling. By buying the market you copy the collective of their strategey, but you pay no fees. Now, if everyone did this, i.e. 100 people indexed and bought the market, there is no real price discovery. This is what is happening now and will continue to happen. Price discovery is going to a smaller and smaller part of the market, and the rest is a big toxic bet on the whole lot with no concern for real fundamentals. Remember that all of life is a pendulum and it swings back and forth, sometimes over long periods of time. The pendulum has swung in indexing's favor for quite some time, but it will eventually swing back, in my opinion.
All these people who go to these High honor schools are NOT Creative they were put through a machine all their lives they dont know the real world/investing in companies
1:05 “They were ill-educated - that’s what happens when you go to Harvard or Wharton.”
This mans mind is sharp as a razor, even at 95.
Adam Chalkley they read a lot
because he uses his brain, and he never retired. Retiring is a death sentence, your mind and body will give up on you.
Love your comment, but please use proper grammar. Your statement should be written: This man's mind is as sharp as a razor, even at 95.
@@lamao4246 I’m not sure anyone really cares.
What i took away from it:
Don’t try to diversify too much to the point where you are investing in things your not sure of. Stick with a few things that you understand well and why you are investing.
nice summary!
+Jonathan
What many call diversification is nothing more than throwing as many bits of mud as possible in the hope that some stick in the wall.
Good diversification means limited levels that are distributed enough that they do not disappear. Hence the reason why Benjamin Graham believe in hold a certain amount of Bonds in a portfolio.
Only when you're stock picking. Diversification is still important.
Jonathan Smith great takeaway 👍🏽
I took away from it 3 things: you absolutely do want to diversity by putting your money in an index fund. Only try to invest in single stocks if you are warren buffett or Charlie Munger. Do not let some dumbass investment advisor tell you that you need to pay them 1 percent annual fee when they can't do better than a fully diversified index fund.
Jim Cramer left the chat
LOL
.
So far, he's made 10 burner accounts.
JB Smoov - 3:23 Jim Cramer dis = LVL.100
Not before incessantly pressing fake buttons while screaming nonsense then automatically losing half of his viewers as a result
Charlie is a savage: "I'm right and they're wrong"
King Kang f
More like “you’re smart and I’m right so eventually you’ll agree with me.”
Who would argue with him with his returns?
“Warren, think about it. You are smart and I’m right”
Patience = Win
Charlie You are a gift and a wonderful mentor. Thanks for what you have taught us.
Oh, no worries. YOu are welcome. I've just reviewed your own product videos, Larry.
@DannyDeVito You’re very ignorant. Charlie has taught and inspired thousands with his books & lectures!
"I'm right and they're wrong" sounds so different coming from a 90's year old man than a 20-something year old. His story about "grandfather" telling him about his experiences resonates with me, I was fortunate enough to have 3 great-grandmothers and 3 sets of grandparents to hear stories from as a grew up. Many of those lessons still influence my decision making today. Something I have learned: Not everything that is new is better.
Could you share some of their advice?
That’s a good thing to have. I had none of that. Def right it does sound completely different coming from this man at his age vs 20 something
Three sets?!?! How does that happen? Shouldn’t you only have two?
I've seen smaller shoulder pads on football players.
Lol
I’ve seen a smaller perch on owls
lmao
Don’t..don’t make light of that
Thanks now it’s hard to take the vid seriously without laughing 😂
Charlie Munger is a national treasure.
International🇿🇦
Jim Cramer on blast 🤣🤣🤣🤣
Might be smarter than the Oracle himself.
That last part is maybe the most valuable part
He is the most sharpest man, regardless of his age. Way to go Charlie. You and Warren are two people to learn from honest approaches.
Irregardless is not a word.
3:00 Pick your spots - the few things you're good at.
It's important to note that investing in indexes / just going with the market is a perfectly viable way to invest for most people. Most of us like to think we understand whatever our area of expertise is but realistically we don't understand it as well as we think we do. Diversification will lead to average results but its also safer which is honestly what most of us need.
Are you in the markets to make money or to not lose money?
@@fanelemabaso2514 both obviously - you can't make money if you lose money... First objective is to avoid anything that will likely lose money. Then from the remainder, select the best idea to make money.
Not financial advice here but following from Nassim Taleb's work it might be rational to try to put most of one's portfolio into index funds and allocate a smaller portion to those, "domain expert picks" that one finds worthwhile. You get the upside if those stocks do well but you still get the sustained, low-risk gains that come from index investing.
This is the trash talking side of brk. Fantastic! GOATs of the game
Great insight
Only Buy things that we know well and
Seize the opportunity since it might not come twice
You know you are old when your grandfather remember playing around with real Dinosaurs, fighting the indians and discovering new land in usa
The most brilliant man in investing world
Very smart man with a wealth of information to teach us. Anything his team has to say I’m all ears!
WHY would you cut out the explanation on the first part...???
This should be a lesson for all. At 95 retire don’t let the evil of money control yo life.
Li Lu was able to grow Munger's 8 million dollars to $500 millions in 15 years (30% CAGR). Himalaya fund. Charlie Munger called Li Lu Chinese Warren Buffett. Li Lu is really a very low profile guy.
I think it was a little different. Munger grew his own 10 million to 50 million investing in Tenneco, then Li Lu turned the 50 million into 500.
thanks for that, i was always trying to find him to get his ideas
I believe it was 10 to 80 from Tenneco, then off to Lilu it went.
Does anyone know what the requirements are to join these funds? I would love to have my money in, and have the other half in my own to learn along
@@commonsense6093 Yeah, I like the mindset, that is the mindset I am adopting too for my own investments, 5-10 year holds
A wonderful investment idea is like stumbling on buried treasure. A wise man would plunder the find and keep his trap shut; Buffett and Munger never talk about the investments they're about to make. Buried treasure is hard to find. Unless, you're a snake oil salesman like Jim Cramer.
Daniel David ah yes, BUT buffetts genius is to tell everyone to buy an S&P500 index fund (while he owns huge positions in these companies)
It is brilliant
KISS: Keep It Simple Stupid, i love his explanation.
Good common sense wisdom is mostly what it’s about.
To summerise: Know a little, a lot.
Edit: A lot of people know a lot, a little. Better to know a little, a lot.
Great anecdote by Mr Munger - thanks for sharing!
Warren Buffett has mastered what patience looks like. He has stuck to the markets, having a long term view on the markets. This is what I'm struggling to do, trying to learn how to not react to market news about inflation and all. I have currently set aside about $553k to put in the market now that prices are down. Any ideas?
@Brilliantrans I've been looking for advisors recently because the market news hasn't been very positive. who’s the person that is guiding you.?
@Brilliantrans Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
Index funds.. Charlie even stated in this video 99% don’t beat indexing. That 1% that he is referring to that has the potential to beat the spy 500 over the longterm are investors like Charlie and Warren.
Go full AMD.
“He fought the Indians for land”
What do you mean?
Value investing is the way to true fortune!
Gotta respect Charlie and his principles 👌
Investing Engineered not you again!!!!!
Combining short to reduce risk
Yep, that's indeed a generous amount.
Charlie cuts like a sharp cleaver.
I thought he was sitting in a chair.
1:20 "the tried, and failed utterly"
Just like your spelling. ;)
Can someone here explain me how he got to know and understand business terms, finances, etc. just before living law practice? I have also a law degree and i would love to have a similar path but i struggle to get started on the business things… Does someone have a tip?
Start small. Investment happens over time. The rest will come to you.
Mr Munger has studied Math in his undergrad and then he studied Meteorology in his service career at Second World War- least to mention that he did very well in the law school too. Beside that he is also an avid reader. I think all these factor makes him a rational player in the market.
Diversify across your area of competence!
Joseph Marinho that’s nice dude
8:15 "They (money managers) just can't do what the profession is trying to do, which is get better than average results"
Well, it would be pretty impressive if the average allocator got a better than average result
Where can i get the full video?
He sounds like he's 1,000 years old.
they’ve been buying time
I think the market will crash the day they pass away.
They have so much influence on the investors all around the world.
I'm from Russia and Buffet and Munger are my role models.
Brillant and wise. Very good use of time watching this. Thanks
Why won’t indexing work if everyone did it? Ref: last 2 minutes of video.
Because then the index would be overprice
Got my daily dose of munger and buffet
I fucking love Costco.
Most brilliant man I have ever seen
On a basic level the market is a zero sum game where the average is established by the aggregate of ‘best ideas’ so the example is a bit nonsensical since a representative slice of the market isn’t going to be anything other than the average. There seems to be a reluctance for him to acknowledge that he ( and by extension Berkshire) are part of the same phenomenon where their stock picks aren’t adding enough value to beat the index.
The S&P 500 in 2008 was worth 1500 and today it is worth 3093 (13/11/2009) that amounts to an average rate of growth of 6.8%.
Berkshire Hathaway in 2008 was worth $113,000 and is now worth 331,000 (13/11/2019) which amounts to a growth rate of 10.13%.
They have massively out performed the market place. If you were buying after the crash you would have greater gains with the S&P but you would to be timing that growth to get such spectacular gains.
High IQ people seem to find their way to non value added activities. Poker, trading, chess, and law come to mind.
interesting observation ..
That is because he’s Guly intelligent people often think that being clever is synonymous with having good judgement. It is not.
Law, lol, yeah right.
High IQ people find a need to partake in activities that require their intelligence to be actively utilised. the more you can do, the greater the urge you feel to participate.
"... and law" ---- Ha ha ha!
Life is like a crap sandwich.
The more bread you have the less crap you eat.
Charlie has all bread and nobody dares to pull political correctness on him.
Bryan Queen but now if you don’t have any bread you’ll be eating crumbs lol
wht about talking about
Come on man. Surely you've heard of the Golden Rule those with the gold make the rules.
@@sundevil3640 that was a disgusting proverb I was eating when I read that.
Dan Yxng it’s a pessimist POV
After discussion
Don't mind please
Fantastic wisdom.
Both Charlie and Warren sound alike.
I wonder how a "pick your second best stock" strategy would work?
What does he mean by the statement"Index investing if everybody did it.it wont work"?
No ,problems means like Jack
Don't mind please
He’s getting closer ! Cmon mr munger you got it !!
Warren is amazing
happy I care half man half amazing
So... regression to the mean?
Cold blooded
I think you have to learn to note that it's not what people say but what they do : Berkshire Hathaway is the most diversified conglomeration of companies out there. They own banks, railroad companies, aeroplane companies, tech shares - Apple (IBM before), candy and burger and carpet and real estate stores to name a few. So when Munger says, we stick to what we know, and yet Berkshire holds stocks in companies from A - Z then what's he's saying is a bunch of NONSENSE.
That is a consequence of two things. Firstly, Buffett doesn't have opportunities to sink serious portions of his capital into single companies; and secondly, it took nearly a century to build out his knowledge to the level that he can be invested that broadly. Look at the concentration as well, Berkshire is 90% insurance/finance, energy/BNSF, and consumer non-durables. If you look at Munger's DJCO portfolio, he owns 5 stocks--3 of which hold 95% of the total weight.
Well Charlie the jury is still out on Baba.
There are people who have had death experiences (been pronounced deceased) and then have actually come back to life, and they say that they felt a wonderful feeling of love or of God's love among other experiences they had. It looks like it is worth asking some questions about why we are living this life here, where we came from before it and where we are going after this life. There are some great and very relevant answers to know that God has given us in scripture, let me know if I can share and I hope to get back to anyone.
The trade market just like any other financial institution requires a lot of time and expertise to yield fruits. This videos go a long but with the amount of profit I've been Making I prefer the one on one lessons from an pro analyst. While learning and earning I've come to realize the benefits and necessity of having a pro analyst handling trades of newbies and struggling traders. Nothing can pay up for those years of skill mastering. Kudos Noud I'm making six figures this year.
Maybe that's where I went wrong trying out something I have no experience of, I've spent several thousands on the market without any profit. Please from one trader to another. How do I get to where you are? What's your strategy?
As a newbie I struggled with stock picking and entry points that cost me a lot till I partnered with a licensed, bloomberg acknowledged analyst and now I’m a dividend investor I invested in the s&p500,both through my TSP with the government, and through Fidelity in my 401k,cashed out 310k from the S&P.I invest with Mr Noud Mika too,He's my full service broker.I currently have a million in my tax deferred savings and around $1.1 million in my portfolio under speculation and management from Noud
You make it sound easy. I've been trading for a while and coming across licensed pros like this isn't easy you know. Most rich folks don't recommend their broker to others. I won't pass up this opportunity, If you could be so kind to share his contact, I'd love to have me trades placed by a pro
Mail Noud directly
@
Is everyone here a bot, or just the main guy haha
How comes He is worth 3 Billion when Mr Buffet is worth 85 Billion?
Buffet had more money before they become partner
I come up with solutions to issues that people are currently facing on an ad hoc basis - that has produced great ideas, but the most important thing in many cases is just getting that important issue resolved. :)
Nice video - Charlie and Warren are nice guys. :)
Great video!!! I just liked and subscribed.
I'm going out this week
Love this guy
Thanks for the wisdoms ❤❤
Different field cannot says means
Suppose that accounts jobs, trading, manufacturing, supply out of station,
Job,s , self industries ,cad/cam(design and programming all type mould at software's)
Don't mind please
Index fund is a huge dangerous bubble that’s basically what he said!!! index fund is created to out preform average stock firm but their stock price is way above their potential value. It a bubble going to pop in the future!!!
Nice
Still work
...glossed over..."take it away from the Indians"...even though he talks very slow , you can tell he caught what he said because his speech slowed even more to regroup...western mindset at its best...the history books will say "made a good investment"...to control the narrative
We never thought we could get really useful knowledge on all subjects, like Jim Cramer pretends...tends to have
Watch at 1.25x
Love you mr. Charlie munger
When is this event ?
Feb 2019
@@investmentknowledge2011 thank you you can never get enough of these !
So why did that strategy fail? He says everybody should know the answer so what is it?
He said they were trying to do too much, whereas Warren and Berkshire do less. Those at the investment counseling shop were trying to "study a million things"
um mareli Thank you for the answer but if these guys are so smart then why wouldn’t they be able to figure that out.
Buffet is under the table and giving voice. Mungner just shaking mouth
How can I be like Warren Buffett thanks
Spend most of your time reading and have deeper interest in businesses and think about businesses.
Be born into am upper class family
It's got to feel natural. Many people will try and fail to be like Warren buffett because it doesn't come naturally to them. Be you. Be original and what happens will happen.
@@ryanmonroe94 True.Be you.That's deep !
Tien Doan wrong! He was never born into an upperclass family. He just worked all his life and started investing at the age of 13. Quite some difference to all of us here I think!?
They don't outperform the market though. Bitcoin is bigger than them.
Charlie munger for president
Stuff that doesn't take 20 years of raising a child.
Thanks
Thank you
It depends how you use it. For example, in Kramer’s case. Personally, to create ideas or considerations, is why I tune in. Bloomberg more cold, therefore cannot be rationally creative, analogously with musak as opposed to my cnbc.
Guys, don’t try and beat the market. If you try, don’t risk more than 10% of your portfolio
He’s not even saying anything bro
Here isn't outperforming the market
These people tried for years until now: technology development speed is the speed limiting step. AI self learning!
Haha love it, keep is trying to find something can can't be found!
Less is more Charlie
Tyler Wolf "thinking fast and slow"
His comments at the end of the talk is so SPOT ON it’s not even funny. People are basically being fleeced!
This guy died half way through the speech..he just kept working through it
Buffett hasn't outperformed the market over the past 5 years (maybe more). In fact, Berkshire stock has been flat for over a decade in some periods. This is not to take away from Warren's success, but saying he's still outperforming the market is not valid. Naturally, his biggest constraint is Bershire's sheer size.
Edgar Torres when you look at the 10 year return for Berkshire and the 10 year return on the s&p 500 Berkshire has got a better return actually
It’s hard to outperform market when your capitalization becomes comparable to GDP of some countries
Sir
Before single person Send in India
Without media , some problems
discussion then clear
One,two days with in back
Don't mind please
At the tail end he says that if everyone did it, index investing won't work. I know Michael Burry doesn't like them either. Does anyone know what he's talking about?
High level, indexing rides on the coattails of active managment. Imagine 99 active managers buying and selling, and you are the 100th who just buys the whole market. You have 99 people, granted some less intelligent than others, but still 99 people with huge teams and algorithms and research and often even insider knowledge, that are creating real price discovery through buying and selling. By buying the market you copy the collective of their strategey, but you pay no fees.
Now, if everyone did this, i.e. 100 people indexed and bought the market, there is no real price discovery. This is what is happening now and will continue to happen. Price discovery is going to a smaller and smaller part of the market, and the rest is a big toxic bet on the whole lot with no concern for real fundamentals.
Remember that all of life is a pendulum and it swings back and forth, sometimes over long periods of time. The pendulum has swung in indexing's favor for quite some time, but it will eventually swing back, in my opinion.
Love Charlie.
All these people who go to these High honor schools are NOT Creative they were put through a machine all their lives they dont know the real world/investing in companies
Exactly the opposite is true. They are too creative