A new look at active vs passive (Michael Green)

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PascLeRasc · 2021-04 · Recommendation

You'd probably be interested in listening to this talk by Michael Green: [VIDEO] He goes into a lot of data around the idea that the market is "too passive", and he believes that we were already at that point last year before the pandemic.

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PascLeRasc · 2020-08 · Recommendation

Your argument is exactly what Michael Green talks about [1]. The talk I linked is from January of this year and he basically predicted the exact crash we saw in February. Individual stocks were going up and down tracking the S&P 500 exactly, based on no news or any kind of information, just that they were in the S&P index. The price of the stock did not reflect the company's financials or outlook. We're about to see this when Tesla gets added to the S&P 500 - funds will be required to purchase Tesla stock at any price. The reason that I'm personally an index fund skeptic is that I like to understand what I'm invested in. If you look through the S&P 500 members, there's dozens to hundreds of companies basically no one's ever heard of, and companies that I personally don't see a big future in. If index funds didn't exist, why would I take $100 of Fifth Third Bancorp or TechnipFMC when I could get $100 of Apple or Slack instead? The former is what you get when you invest in the S&P, while the latter are products I use everyday, and I feel that I understand how they make money. If you hang around investing subreddits long enough, it starts to feel like everyone's parroting the same 5 sentences about expense ratios and diversification, with no analysis or critical thought put into what the actual investments are. [1] [VIDEO]

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Fade_Dance · 2025-10 · Reference

You are being mindful of some real risks and concerns. That said, there's no reason to have to feel like you need to take a stab at it totally by yourself. Heck, that's what I'm doing in the day to day - putting together a few of these portfolios for people. There are certainly advisors and managers who know the academic side of this and can diversify away from concentration risks and such. There are also many great tools in the relatively recent future that have opened up for common investors to diversify smartly. You can get pure trend following wrapped up in an ETF. You can get 100% equity 100% bond wrapped up in an etf at half of the size, so you can fit Gold and Trend in a portfolio with no hassle (both are low return but great from a diversification standpoint, so most retail investors want to lever up a bit to get back to the standard SP500 return/variance profile). If you don't or can't find someone who can math it out for your individual case, it's also an option to just pull a few of the best proven individual ideas, such as "have some international diversification". ETFs are easy to grab here. Even 10-20% can pad out some of the US concentration and dollar exposure a bit. Smallcaps, like you said, are another way to shift away from the "size factor" dominated index weighted ETFs. The Nifty 50 bubble in the 60s was a major catastrophe, and history rhymes, so why not hedge a bit while still sticking to a proven investment framework? No financial advisor is going to l

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