In their latest episode of the VALUE: After Hours Podcast, Brewster, Taylor, and Carlisle discussed 80% Of The Stock Market Is Now On Autopilot. Here’s a excerpt from the episode:
Bill: I was reading Laughing Water’s letter the other day and he said that there’s J.P. Morgan stat that like, I don’t know, 80% of the market is just mechanical, which I think is interesting. Maybe you can give hope to the 2% of people [crosstalk] long-term value investors. [crosstalk] said something similar.
Tobias: Passive? Is passive?
Bill: I think mechanical. Yeah. I don’t know the definitions of passive versus active with computers. But this particular example was citing like a GICS code that misclassified a business and he’s like that 80% of the investors don’t even know what this business is, because GICS code is off.
Tobias: Shootout to Matt, he listens to this sometimes, he says.
Bill: There you go.
Jake: Hey, Matt.
Bill: Yeah, hello, sir.
Tobias: Yeah, that’s a little troubling if you believe in price discovery.
Bill: I believe in liquidity and flows in the short term.
Tobias: It’s a good thing, right? It creates the opportunity.
Jake: I’m saying, if you’re depending on others to tell you what your security is worth.
Bill: Oh, yeah, can’t do that.
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