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by jtcond13
3258 days ago
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The 'rise of passive investors' creates more opportunities for activist investors to discover overvalued/undervalued stocks. Index funds aren't affecting the prices of individual stocks. So long as the opportunity exists to make money buy buying/shorting stocks, someone will be buying/shorting stocks. Moreover, executive compensation is still overwhelmingly set via earnings-per-share targets in a fairly transparent manner. If there's a conspiracy afoot to miss targets to benefit an industry sector, the authors haven't identified it. I like the Matt Levine treatment of this question ('Are Index Funds Communist?'): https://www.bloomberg.com/view/articles/2016-08-24/are-index... |
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