Terry Smith’s latest shareholder meeting offered a refreshing dose of straight talk for investors. His candid reflections cut through the usual market noise and provided some lessons worth remembering. Even top performers have off years, as Smith openly admitted when discussing Fundsmith’s recent performance: “Last year wasn’t our finest hour. … Read More
Terry Smith: The Rise of Passive Investing: A Market Distortion We Can’t Ignore
In the past few years, the financial world has witnessed an undeniable shift: the relentless rise of passive investing. As Terry Smith pointed out at the latest Fundsmith Annual Meeting, more than 50% of global assets under management now reside in so-called passive funds—index funds and ETFs. This phenomenon is … Read More
Tech Dominance Is Breaking the Market Cycle
During their recent episode, Taylor, Carlisle, and Michael Gayed discussed Tech Dominance Is Breaking the Market Cycle. Here’s an excerpt from the episode: Michael: No, no, that’s good, actually. So, let’s play with this. Jake: Confirm my priors, please. [laughter] Michael: Right. Misery loves company, especially in podcasts. Okay, let’s … Read More
Buy and Hold Forever? The Truth About Long-Term Investing Strategies
During their recent episode, Taylor, Carlisle, and Ian Cassel discussed Buy and Hold Forever? The Truth About Long-Term Investing Strategies. Here’s an excerpt from the episode: Tobias: It just didn’t sell. Ian: It was always several hundred, you know? Tobias: It was never sell. Jake: [crosstalk] math pretty good though, … Read More
Terry Smith: Passive Investing: The Self-Reinforcing Momentum Strategy
In his latest letter to shareholders, Terry Smith explained why passive funds are effectively momentum strategies that create a self-reinforcing cycle, driving up large-cap stocks. In late 2023, passive investments via index funds surpassed active funds in Assets Under Management (AUM), now exceeding 50%. During the Dotcom boom, only 10% … Read More
As Markets Become More Passive, Volatility Amplifies, And Markets Become More Unstable
https://www.youtube.com/watch?v=lTVE9ixrzgA?start=2264 During his recent interview with Tobias, Chris Cole of Artemis provides some great insights into the impact that passive investing has on market volatility and market instability, saying: Let’s imagine that we go out and I get incredibly drunk. I get crazy drunk, and I am a passive investor. … Read More
There Are Now More Indexes Than Stocks – Here’s Why
According to a recent Bloomberg article, the number of market indexes now exceeds the number of U.S. stocks. Here’s an excerpt from that article: