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|User Info||ROFL! 5yr P/E/G of 17?!; entered at 2018-01-12 15:12:09|
I really like the concept of indexing, and the quickening elimination of the active managers. Efficient market hypothesis tells us that the price of a security represents all known news, etc., and opinions of those in the market. That, of course, only works when there is speculation. The speculators are getting crucified.|
Do active managers always beat the market? No, and they don't do it on average. But they serve a damned valuable role in the pricing of securities.
Now, we have "machine learning". Most of the money coming in is going into index funds, so the prices of the things in the indices goes up. The machines are probably learning this, never mind that you could train an ape to do it, and save a ****load of money on cloud time and physics PhDs who would otherwise be adding value somewhere else in the economy.
So if you want value, look outside the indices. If you want to make money, sit on the sidelines until the crash comes, and start buying under-leveraged companies with solid cashflows and dividends.