The Passive Storm

<p>This week, Sean and Dan breakdown their thoughts on investing actively vs. passively. </p> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">00:00</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> Introduction and Discussion on Investing Preferences</span></div> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">12:46</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> Passive Investing: Investing in Diversified Portfolios</span></div> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">26:47</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> Active vs. Passive Investing</span></div> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">27:44</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> The Benefits of Passive Investing</span></div> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">30:10</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> The Importance of a Healthy Cash Position</span></div> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">32:18</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> Active Investing in Specific Industries or Market Opportunities</span></div> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">36:00</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> The Magnetism of Active Investing</span></div> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">43:09</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> The Potential Risks of a Purely Passive Market</span></div> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">46:46</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> The Possibility of Outperforming the Market with Active Investing</span></div> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">52:10</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> The Potential Drawbacks of Passive Investing</span></div> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">56:35</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> The Impact of Passive Investing on the Market</span></div> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">01:04:19</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> The Challenges of Outperforming the Market as an Active Manager</span></div> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">01:06:11</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> The Emergence of Alternative ETFs</span></div> <div class="MuiBox-root css-4cps79 e1de0imv0"><span class= "MuiTypography-root MuiTypography-helper css-v8n4dg e1de0imv0">01:13:05</span> <span class= "MuiTypography-root MuiTypography-bodyMedium css-1lit4es e1de0imv0"> Debating the Effectiveness and Sustainability of Passive Investing</span></div> <p>Here's some of the material we consumed to help prep for this episode, for those who want to dig deeper:</p> <p>AQR Capital Management. (2018, April). <em>Active and passive investing — the long-run evidence</em>. Alternative Thinking. https://www.aqr.com/-/media/AQR/Documents/Alternative-Thinking/Alt-Thinking-2Q18-Active-vs-Passive-Investing.pdf</p> <p>Faber, M., & Asness, C. (2024, April 5). <em>Episode #527: Cliff Asness - Timely & Timeless Investment Wisdom</em>. Meb Faber Research - Stock Market and Investing Blog. https://mebfaber.com/2024/04/05/cliff-asness/</p> <p>Faber, M., & Bessembinder, H. (2024, May 3). <em>Episode #532: Hendrik Bessembinder - do stocks outperform T-bills?</em>. Meb Faber Research - Stock Market and Investing Blog. https://mebfaber.com/2024/05/03/hendrik-bessembinder/</p> <p>Faber, M., & French, K. (2024, May 1). <em>Episode #530: Professor Kenneth French on risk, return, and rationality</em>. Meb Faber Research - Stock Market and Investing Blog. https://mebfaber.com/2024/04/19/kenneth-french/</p> <p>Gabaix, X., & Koijen, R. S. (2021). In search of the origins of financial fluctuations: The inelastic markets hypothesis. <em>National Bureau of Economic Research</em>, <em>28967</em>. https://doi.org/10.3386/w28967</p> <p>Hoffstein, C., & Green, M. (2022, May 29). <em>S05E01: Michael Green - The active impact of passive investing</em>. Flirting with Models. https://www.flirtingwithmodels.com/2022/05/29/s05e01-the-active-impact-of-passive-investing/</p> <p>Mandelbrot, B., Hudson, R. L., & Olazabal, J. (2019). <em>The misbehavior of markets: A fractal view of financial turbulence</em>. Hachette Audio.</p> <p>Ritholtz, B., & Einhorn, D. (2024, February 8). <em>Masters in Business: David Einhorn</em>. Bloomberg.com. https://www.bloomberg.com/news/audio/2024-02-08/masters-in-business-david-einhorn-podcast</p> <p>Taleb, N. N. (2016). <em>Fooled by randomness</em>. Random House.</p> <div> </div> <p> </p>