I wonder what role ETF investors play (I am one of them). Paying in every month and leaving it there for 20+ years ensures that money continues to flow into the market to companies that are already at the top*. Won’t that create a dangerous bubble in the long term?
*Example: I wouldn’t invest in Tesla if I were stop picking, but Tesla is included in various indices. Same with some regions.
Why do we have to have this conversation every 10 minutes. It is just not true. Currency volatility is microscopic over the long term compared with stock volatility.
You will always find a period where one or the other performed better, just a statistical normality.
But you are here for the long term and then it looks like this:
Shame I didn’t start in 2009..
Nice article.
And now passive investing has removed price discovery from the equity markets…
Most of my big gains come from small caps that are not even present in the holy grail or represent 0.00x % of their holding so a 2000% gain means like close to nothing. But the companies that have their growth in the past are bought like crazy.
I wonder what will happen when the religion (the holy grail) start to fall apart. Only a very few companies need to run bad (and they will) for all the youngsters leaving their church, dropping the holy grail. AFAIK it is not sector diversified which is a big risk too.
We are at market highs with almost 2 decades without real problems in the stock market. What do you think will happen when half the money saved in their whole life will disappear from the youngsters broker statement?
Quiet please, tonight is St. NVDA (happens four times a year).
It’s creating the bubble now. It will reverse when inflows turn into outflows e.g. when people retire.
Maybe FIRE adherents will be at an advantage as they will get out earlier.
Since demographics are trashed now, we can’t keep it going as a pyramid scheme as the base is shrinking (fewer kids/workers).
Burry, though he’s smarter and richer than most, appears to be a classic case of a one trick pony.
I’ll wait for other more knowledgeable people to tell us what’s the cutoff for passive investing removing price discovery from equity markets, and don’t have the time to look at Ben Felix’s relevant video, but I remember the tl:dr version being “the moment passive investing causes real inefficiencies in the market they’d be near instantly exploited by active investors, and efficiency will return, and we’re far from it anyway”.
Going back to my point above, I can’t help but wonder if Burry just longs for a crash so he can come up and say “told you so, like I did in 2008”,
I am not so sure that is true. Because how would that happen with overpriced and over represented companies in the holy grail? Short sales not a common strategy and carry additional risks.
Look at Tesla. It is still a very big part of many ETF but individual investors in those ETF probably would not buy it. But they buy it in their ETF and therefor the price finding is troubled.
Dunno, that’s why I am referring to authority, weak argument, I am aware! Would need to see growth of passive investing via US pensions (401(k)) in the recent years - I’d expect it to be big and having grown rapidly since covid, a good signal of bubbling and over exuberance indeed - vs active investing, and do a counterfactual for a scenario where that money was invested actively or used to buy crap on Temu. And still, it’s a chicken and egg situation: exuberance wouldn’t exist if we weren’t in a very long tech bull run…
Exactly because I have no answers, or appetite to take the steering wheel, I just ride along like so many others.
edit: couldn’t read the article due to paywall.
Isn’t the worry in the article about liquidity? (I think the non collapse of bund funds in 2020 should be reassuring).
Because my portfolio gains this year got eaten by USD depreciation
Just view it in USD terms and you will feel better 
If you care for “this year” you probably should not be in the stock market at all.
But even “this year”:
USD/CHF YTD -10.76%
SPX YTD +9.93%
my momentum strategy YTD +12.06%
my dividend strategy YTD +10.84%
That is a storm in a glass of water, even for such a bad year like this. With dividends probably the SP500 even had a positive return.
For any longer period stocks do even better and currency does not matter.
What matters is the risk/return profile of your investment…
Did everyone capture this? Not sure if this „new“ tariff is for services or goods. But seems like now White House is trying to take over tax sovereignty on digital services and dictate what other countries can or cannot do. Interesting to see export controls on Chips/ other technologies would be part of leverage. I wonder when will EU wake up to digital sovereignty and if it’s already too late
“I put all Countries with Digital Taxes, Legislation, Rules, or Regulations on notice that unless these discriminatory actions are removed, I, as President of the United States, will impose substantial additional Tariffs on that Country’s Exports to the U.S.A., and institute Export restrictions on our Highly Protected Technology and Chips,” he wrote.
Let’s replace everything with European tech, that does not rely on US tech, and certainly not even on open source software supported by US companies. Run on European hardware manufactured on the European continent.
Our sovereignty is at stake, let’s do that NOW (capital letters trump style).
Also we may replace European with Swiss for another story.
Also switch the forum to schwiitzerdütsch-first, we have to avoid US language (tariff may apply soon).
Aaaand… it’s a boo. (After hour price is in the dark red… at +30%-sthg level for the quarter 
)
Really not that bad, predictions were 6.5% up or down, now it’s clearly in a plateau, will bounce back.
Well if you look at quarterly performance, still insane, stock and company.
How long will it to last, well…
Nvda is now a major concern for every index investor. 
But this time is different. (I’m out).
Right, having paid attention to their earnings over the last 2-3 years it’s evident they were quickly going into a plateau in terms of growth. I think a gradual plateauing is not at all a bad thing. Of course the market which…in the midnight hour she cried more more more…will likely not see it this way
Agree, I am thinking to put this month’s contribution and most going forward into building a Swiss position.
How do you mean?
