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Goldman: Passive Shift Leads To Plunge In Float Available For Fundamental Investing
One of the key criticisms of the epochal shift to passive investing revolves around the extent to which passive vehicles are funneling large amounts of money into markets indiscriminately.
While it is undoubtedly true that the proliferation of low-cost vehicles that allow investors to cheaply express a long-term view on the broad market is generally a positive development, you'd be naive not to acknowledge that there are consequences.
One of those consequences is that the price discovery mecha
This further supports implementing the strategy of focusing on the accumulation of fundamentally decent companies that have been dropped from indexes. Debt free and low debt names that have cut or suspended their dividend for “good” reason(s) are prime/rare examples.
TRH
Thanks for this insight. If true, the problem for “good” companies not in indexes is the old saying: Out of sight, out of mind. If no one thinks about you your price just won’t change much. A sage professor of mine once advised me: If you want to make money in the market you need to figure out something good about a stock, a secret that no one else knows, buy the stock, and then tell the secret to everyone you meet . If you don’t share your secret the stock will never go up.