Welcome To ‘The Age Of Fragility’

Enjoy your stay.


Did January 2018 Mark ‘Peak Retail Investors’?

Ahhh, retail investors.

Goldman: Passive Funds Appear To Be The ‘Primary Source Of Recent Volatility’

Proponents of passive investing are going to keep insisting that the epochal active-to-passive shift isn’t dangerous or otherwise prone to destabilizing markets. They’re going to take that narrative to the grave apparently.

BIS: Passive Bond Funds May Pose Threat To Financial Stability

“Unlike active investors, they cannot express their disagreement with the decisions of individual issuers by selling their holdings.”

‘Air Pockets’ And Risk Hiding In Plain Sight

I’m just guessing, but…

Epsilon Theory’s Latest: Wall Street’s Merry Pranks

“But for a universe of individual investors (and rather distressingly, probably some institutional investors, too), the message of empowerment is anything but. It’s a nudge into terrible portfolios, terrible costs and terrible outcomes. But hey, at least they got religion and implemented those terrible, far-too-actively-traded portfolios with ETFs!”

The Black Hole Revisited

Don’t get sucked in.

Jack Bogle Says Trading FANG Index Futures Makes A Lot Of Sense If You Like Being A ‘Crazy Loser’

“If you want to do such a crazy thing, it certainly makes it easy to do.”

When Will Expertise Matter Again? Spoiler Alert: During A Bear Market

“Should the markets begin to reverse, however, investor goals will turn to capital preservation and limiting losses.”

How Passive Flows Are Distorting Liquidity And Influencing Intraday Trading

“In addition, we hear things like… I don’t want to leave a footprint across the day for some High Frequency sniffing algo.”

‘Passive Is The New QE!’: One Bank Admits We’ve Entered A ‘Black Hole’

“…which have morphed into a type of Black Hole. Money goes in and stocks never come out (as least for now).”

Passive Should Never Laugh At Active

“When I see a passive manager making fun of a fundamental investor, I am perplexed. The passive manager’s very existence relies on fundamental investors keeping markets efficient.”

‘Passive’ Aggressive: Here Are The Stocks Most At Risk Of Being Dumped If Flows Reverse

So you know, feel free to throw some shade towards that assessment if that’s how you’re feelin’, but…

Goldman: Passive Shift Leads To Plunge In Float Available For Fundamental Investing

“The share of stock that might trade on fundamental views has dropped to 77% for S&P500 average stock from 95%” in the space of just 10 years.