Gundlach shorts S&P 500, says passive investing is a 'myth'

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birdog
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Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by birdog » Tue May 09, 2017 7:16 am

https://finance.yahoo.com/news/gundlach ... 52048.html

Furthermore, he argued that pension funds are abandoning their fiduciary duty by opting for passive investments.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by WallStreetPhysician » Tue May 09, 2017 7:22 am

birdog wrote:https://finance.yahoo.com/news/gundlach ... 52048.html

Furthermore, he argued that pension funds are abandoning their fiduciary duty by opting for passive investments.
Saw that article on Yahoo! Finance. Bogleheads, they're getting desperate and are resorting to name-calling.

-WSP

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Theoretical » Tue May 09, 2017 7:32 am

I most like how he's short S&P and long EEM (gasp, another index), and with extra leverage 200 up/100 down! Also, S&P'a methodology is far more transparent than almost any active fund.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Jack FFR1846 » Tue May 09, 2017 7:34 am

The only line in the entire article that's worth reading:

Due to high costs and poor performance, actively managed funds have seen massive outflows and passively managed funds have seen massive inflows.
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by oldcomputerguy » Tue May 09, 2017 7:53 am

Can't say I'm impressed with his credentials as "the Bond King".
Wikipedia wrote:On March 9, 2011, Gundlach was quoted on CNBC that “Munis Are The New Subprime.” “You’ve got a history of low defaults, which is comforting. But that kind of sounds like what subprime sounded like back in 2006,” Gundlach said. Gundlach pointed out that even if defaults do not ultimately climb as high as critics like Meredith Whitney have warned, muni bonds will likely trade much lower. “Between here and the end game, lies the valley. And the valley is full of fear. I think the muni market is going to go down by at least, on the long end, something like 15 and 20 percent,” he said.

On March 10, 2011, Gundlach reportedly liquidated 55 percent of his personal holdings in municipal bonds. However, the decline he predicted did not occur and on the same day as his liquidation, the Bond Buyer Index closed at 106.151904, with this index closing at 119.886063 on December 30, 2011, the last day of trading in 2011, equivalent to an improvement of +12.9%. The index closed at 129.99416 on December 31, 2012.
https://en.wikipedia.org/wiki/Jeffrey_Gundlach

I guess this "Bond King" experience qualifies him as an expert on equity mutual fund composition and trading.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by jebmke » Tue May 09, 2017 7:54 am

This guy could take his contortionist act to Cirque du Soleil.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by livesoft » Tue May 09, 2017 7:57 am

Passive investing will still be a 'myth' until bogleheads.org stops having links to articles like this. That is, no one will be worried that they appear, but they also won't be passed on to anyone.
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by harvestbook » Tue May 09, 2017 8:13 am

This guy's trying to be the new Faber or Schiff.
On July 30, he said "Sell everything." (i.e., 230 S & P points ago. Also predicted $1,400 gold.)

http://www.reuters.com/article/us-funds ... SKCN1092BO

I know people need clicks, but nobody every calls out these charlatans for their past failures.
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by nisiprius » Tue May 09, 2017 8:14 am

(Shrug) Invest in his funds or don't invest in his funds, don't try to act on hints he chooses to disclose about his strategy. If he has secrets, he isn't giving them away for free, and if he does tell you to short the S&P 500, is he going to phone you and tell you when to stop shorting it?
Last edited by nisiprius on Tue May 09, 2017 8:24 am, edited 1 time in total.
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by nisiprius » Tue May 09, 2017 8:20 am

I shall now prove conclusively, through dispassionate cold emotionless reasoning, the superiority of passive investing. This is tough stuff, but it's a tough world.

Portrait of passive investors:
Image

Portrait of active investors:
Image

Quod erat demonstrandum, and neener-neener.
Last edited by nisiprius on Tue May 09, 2017 4:00 pm, edited 1 time in total.
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by birdog » Tue May 09, 2017 8:27 am

nisiprius wrote:I shall now prove conclusively, through dispassionate cold emotionless reasoning, the superiority of passive investing. This is tough stuff, but it's a tough world.
:thumbsup

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by djpeteski » Tue May 09, 2017 8:41 am

nisiprius wrote: Quod erat demonstrandum, and neener-neener.
That was awesome. :beer

To me, the underlying tone of the article is a lament of activist investors losing their clout. They find a company, buy some, convince a bunch of pension fund managers that they and their buddies can do better, and oust the company's current leadership over a proxy fight. If the pension fund managers go with passive investing, that whole model goes up in flames.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by CyclingDuo » Tue May 09, 2017 9:28 am

nisiprius wrote:I shall now prove conclusively, through dispassionate cold emotionless reasoning, the superiority of passive investing. This is tough stuff, but it's a tough world.
Excellent! :sharebeer

Why can't we "like" or recommend posts here at BH!!!

I'll credit Gundlach for at least being aware that fine art exists. It's nice that his liberal arts degree at least taught him something...
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Independent George » Tue May 09, 2017 9:50 am

There seems to be a lot of these articles being published right now, but they do bring up one valid point amidst the noise: much (if not most) of the money flowing into the indices are not Bogleheads, but people just trying to ride the hot hand. It is extremely likely that the same money is going to flow outwards in our next bear market, driving prices even lower than usual.

This is likely a very good thing for us buy-and-hold Bogleheads, but I think a LOT of people are going to get hurt by this. A lot of pension funds will get hurt by this, too, since they have institutional obligations which us small-timers don't. While I'm not about to liquidate my portfolio to open an Edward Jones account, I think there can be a real benefit to a good advisor who understands the risk tolerance of their clients, and who keeps people from panicking in bad times.

If you spend enough time here, I think it's easy to forget that most people aren't Bogleheads, even if they've got Vanguard accounts.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by zeugmite » Tue May 09, 2017 10:14 am

Is there fund flow data publicly available?

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by MJW » Tue May 09, 2017 10:17 am

nisiprius wrote:I shall now prove conclusively, through dispassionate cold emotionless reasoning, the superiority of passive investing. This is tough stuff, but it's a tough world.
I spent a good five minutes laughing at this.

I probably shouldn't have read it at work.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by TX_Man » Tue May 09, 2017 10:24 am

The SP500 will be up or down a certain percentage by the end of the year. Subtract the cost of the fees and that is where I will stand. The question is why would I spend more to pay some random guy to manage my account, when all the evidence points to no benefit?

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by avalpert » Tue May 09, 2017 10:45 am

Independent George wrote:There seems to be a lot of these articles being published right now, but they do bring up one valid point amidst the noise: much (if not most) of the money flowing into the indices are not Bogleheads, but people just trying to ride the hot hand. It is extremely likely that the same money is going to flow outwards in our next bear market, driving prices even lower than usual.
Why would you think the pattern of funds going into stocks as they go up and out of them when they fall will be different than 'usual' just because the vehicle being used are index funds instead of active funds?

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by nedsaid » Tue May 09, 2017 10:49 am

birdog wrote:https://finance.yahoo.com/news/gundlach ... 52048.html

Furthermore, he argued that pension funds are abandoning their fiduciary duty by opting for passive investments.
All I can say is "Wow, what a myth!"
A fool and his money are good for business.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Independent George » Tue May 09, 2017 11:23 am

avalpert wrote:Why would you think the pattern of funds going into stocks as they go up and out of them when they fall will be different than 'usual' just because the vehicle being used are index funds instead of active funds?
That's a good point; we really shouldn't expect the patterns to be any different. Still, though, if the new money is coming in through ETFs, then the inflows/outflows might happen faster than before; the volatility could be higher even if the net effect is more or less the same. It won't affect us, but it might result in greater panic for the average investor.

It's all hypotheticals at this point, and very far from the original point Gundlach was trying to make.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by afan » Tue May 09, 2017 11:25 am

If I were an active investor, a SUCCESSFUL active investor, who had consistently exploited passive investors I would not be complaining. I would be delighted that more people were pouring into passive funds. More easy money for me.

If this were my day job, the very last thing I would do would be to complain about it. What if someone were to listen to me and stop buying the S&P 500? That would be the end of my gravy train. To the extent I could I would encourage these suckers to invest even more in passive funds so I could extract more of their money.

Of course, if I were a failing active investor, consistently trailing the market and finding it harder to convince people to let me charge them for managing their money, THEN I would complain about passive investing. My only hope, short of finding another line of work, would be to find some poor fools who would hire me.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by afan » Tue May 09, 2017 11:29 am

The pattern of people buying stock when the market goes up and selling when it goes down will not change. But we might see a change in another flavor of performance chasing. The people who would rotate among the latest hot active funds might now look between active and passive, sending their money to whichever had done better recently. This means that they would go back to active if those funds collectively ever manage to turn in a hot streak. Otherwise, they may start chasing passive factor or sector funds. Still a waste of money but also bad news for people in the active management business.
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by blueblock » Tue May 09, 2017 11:32 am

Bogleheads: come for the financial advice, stay for depictions of Kronos devouring his children. :)

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Grt2bOutdoors » Tue May 09, 2017 11:34 am

He should stick to his knitting, focus on fixed income only.
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Theoretical » Tue May 09, 2017 11:46 am

oldcomputerguy wrote:Can't say I'm impressed with his credentials as "the Bond King".
Wikipedia wrote:On March 9, 2011, Gundlach was quoted on CNBC that “Munis Are The New Subprime.” “You’ve got a history of low defaults, which is comforting. But that kind of sounds like what subprime sounded like back in 2006,” Gundlach said. Gundlach pointed out that even if defaults do not ultimately climb as high as critics like Meredith Whitney have warned, muni bonds will likely trade much lower. “Between here and the end game, lies the valley. And the valley is full of fear. I think the muni market is going to go down by at least, on the long end, something like 15 and 20 percent,” he said.

On March 10, 2011, Gundlach reportedly liquidated 55 percent of his personal holdings in municipal bonds. However, the decline he predicted did not occur and on the same day as his liquidation, the Bond Buyer Index closed at 106.151904, with this index closing at 119.886063 on December 30, 2011, the last day of trading in 2011, equivalent to an improvement of +12.9%. The index closed at 129.99416 on December 31, 2012.
https://en.wikipedia.org/wiki/Jeffrey_Gundlach

I guess this "Bond King" experience qualifies him as an expert on equity mutual fund composition and trading.

Nobody knows nuthin'.
Being early is often just as hazardous as being wrong. But he's not out of bounds. Swedroe' firm has stopped buying bonds from 11 states due to pension obligations. Look at the yields on 20 year AAAs right now - they're 90% or more of the yield on corporates of similar maturity (when they have vastly lower historical default rates), which is way above what the usual taxable premium/municipal discount is (typically a bond holder in the 25% bracket is indifferent between a muni and an equivalent-yielding CD/treasury/corporate (in no income tax states). In fact, for 25% tax bracket denziens, the after tax yields are a lot closer to where BBB bonds are than AAAs and especially GSE bonds.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by inbox788 » Tue May 09, 2017 11:47 am

Thank you Mr. Gundlach. People worry that if indexing takes over, there will be no price discovery. Some people think it's 50% others say 80% or 90% before there's too much indexing. Well, if Mr. Gundlach sticks around shorting the SP500, indexing can go beyond 100% and there will still be someone out there selling it.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Whakamole » Tue May 09, 2017 11:49 am

When Zero Hedge mocks you for being consistently wrong, then you've really hit the bottom of the barrel.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Independent George » Tue May 09, 2017 12:32 pm

Ok, sometimes, you have to write things out and see it in print (or pixels) before you have to facepalm yourself.

I've been a Boglehead since 2007, but nevertheless, I, too, severely reduced my investments during the 2008 crash. It wasn't because I was panicked, but simply because I took a massive pay cut (which I still haven't recovered from) and had less money to invest.

How much of the money flows during boom-and-bust cycles comes from people getting caught up in the mania, versus people just having more money to invest when the market is high, and needing to take money out when the market is down? Yes, I know plenty of people who panicked, but I'm sure there were even more who behaved just as I did, for the same reasons. Nobody likes to talk about losing income. It's embarrassing, even when you know you're not alone.

Is there any research into that? How do the in/outflows break down?

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by boglephreak » Tue May 09, 2017 12:37 pm

i read the article, but dont understand why he says its a myth. is he saying that indexes like the S&P 500 arent really passive because a committee is picking the stocks?

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Boglegrappler » Tue May 09, 2017 12:44 pm

He's a bit worried that pension fund managers have decided that they're paying too much to offload their responsibilities.

That said, I think he's a pretty smart fellow. I pay attention to what he says.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Grt2bOutdoors » Tue May 09, 2017 12:55 pm

Independent George wrote:Ok, sometimes, you have to write things out and see it in print (or pixels) before you have to facepalm yourself.

I've been a Boglehead since 2007, but nevertheless, I, too, severely reduced my investments during the 2008 crash. It wasn't because I was panicked, but simply because I took a massive pay cut (which I still haven't recovered from) and had less money to invest.

How much of the money flows during boom-and-bust cycles comes from people getting caught up in the mania, versus people just having more money to invest when the market is high, and needing to take money out when the market is down? Yes, I know plenty of people who panicked, but I'm sure there were even more who behaved just as I did, for the same reasons. Nobody likes to talk about losing income. It's embarrassing, even when you know you're not alone.

Is there any research into that? How do the in/outflows break down?
Being fully invested, ie. no emergency fund or no cash on side, is not recommended. Understand predicament of losing income, however, had you had say 1 years worth of expenses on side, need to reduce investment would have been less. If you had invested in combo of tax deferred/taxable, reduction in taxable and/or reduction in account risk profile could have potentially mitigated reactionary behavior. Again, understand the reaction, it was truly a time of historic events.
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Grt2bOutdoors » Tue May 09, 2017 1:05 pm

Boglegrappler wrote:He's a bit worried that pension fund managers have decided that they're paying too much to offload their responsibilities.

That said, I think he's a pretty smart fellow. I pay attention to what he says.
I pay attention to POTUS, everyone else has an opinion much like they have a watch. We can all tell time, it's just the manner in which how and when they are saying the time.
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by nisiprius » Tue May 09, 2017 1:24 pm

boglephreak wrote:i read the article, but dont understand why he says its a myth. is he saying that indexes like the S&P 500 arent really passive because a committee is picking the stocks?
It's hard to say. He's just using anything he can to attack passive investing. Yes, he's saying something like that here:
“In essence, when pension funds are going to passive, so-called passive S&P investing, they’re hiring an unknown committee they have never met, never inquired into processes, never did any due diligence whatsoever. In essence, going institutional into passive S&P manager is abdicating your fiduciary duty.”
To which the obvious reply is, "good point, they should use a total market index and a total market index fund instead."

Actually, the whole "passive investing means an S&P 500 index fund, and the S&P 500 is chosen by committee" is so dishonest that anybody who uses it isn't going to have anything interesting for you to learn. And when he amps it to a shrill "abdicating your fiduciary duty" it becomes pure noise.

"Your think it's non-alcoholic beer, but actually it contains 0.5% alcohol by volume. Therefore, since it isn't completely non-alcoholic, it's the same thing as a boilermaker."

If someone were seriously concerned about the use of S&P 500 index funds by pension managers they would be saying something like this:

"A 2005 paper by Norohha and Singal concluded that due to arbitrage around index changes, investors in S&P 500-linked funds lose between 0.03% and 0.12% annually.' Pension managers who use S&P 500 index funds have a fiduciary duty to be aware of this effect, and allow for it when choosing a fund. Depending on expense ratios, it may be better to use a large-cap fund tracking an index with a rules-based selection criterion based only on cap size, with modern reconstitution features to resist front-running."
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by House Blend » Tue May 09, 2017 1:46 pm

oldcomputerguy wrote:Nobody knows nuthin'.
Those who are loudest know the least.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Pajamas » Tue May 09, 2017 3:35 pm


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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Dave55 » Tue May 09, 2017 4:08 pm

House Blend wrote:
oldcomputerguy wrote:Nobody knows nuthin'.
Those who are loudest know the least.

"Those who tell don't know, and, those who know don't tell"

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Raymond » Tue May 09, 2017 4:38 pm

blueblock wrote:Bogleheads: come for the financial advice, stay for depictions of Kronos devouring his children. :)
Thanks for the description - I thought it was Cyclops eating Odysseus's men.

But I was confused about the two-eyed (versus the one-eyed) monster :P

Birdog, thank you for starting this entertaining thread.

Nisiprius, could "The Kronos Fund" be another investment option in the Nisiprius Investments family?
"Ritter, Tod und Teufel"

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by DartThrower » Tue May 09, 2017 4:41 pm

Independent George wrote:There seems to be a lot of these articles being published right now, but they do bring up one valid point amidst the noise: much (if not most) of the money flowing into the indices are not Bogleheads, but people just trying to ride the hot hand. It is extremely likely that the same money is going to flow outwards in our next bear market, driving prices even lower than usual.

This is likely a very good thing for us buy-and-hold Bogleheads, but I think a LOT of people are going to get hurt by this. A lot of pension funds will get hurt by this, too, since they have institutional obligations which us small-timers don't. While I'm not about to liquidate my portfolio to open an Edward Jones account, I think there can be a real benefit to a good advisor who understands the risk tolerance of their clients, and who keeps people from panicking in bad times.

If you spend enough time here, I think it's easy to forget that most people aren't Bogleheads, even if they've got Vanguard accounts.
That's a great point. I always say it's not possible to have a bubble in common sense, but are people using the insight that index funds in general are superior to actively managed funds with similar objectives, to rationalize taking on more risk than appropriate? The index "story" is valid but nevertheless it is still a story in the sense Shiller uses. Is there a kind of optimism instilled by the indexing "story" that is causing investors to be overly exuberant regarding equities, or are investors just as excited by Vanguard's low cost safe/boring bond funds?
A Boglehead can stay the course longer than the market can stay irrational.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by dratkinson » Tue May 09, 2017 7:33 pm

If passive investing is now a "myth", then it must also be a myth that passive investors are "mindless idiotic parasitic robotic evil freeloading indexers" riding on the coattails of, and taking unfair advantage of, hardworking active managers.
See: http://www.google.com/search?q=freeloading+indexers

I'm certainly glad that's over.



I noticed article omitted one small editorial change that would have enhanced clarity, but ended article prematurely.
Jack FFR1846 wrote:The only line in the entire article that's worth reading:

Due to high costs and poor performance compared to passive funds, actively managed funds have seen massive outflows and passively managed funds have seen massive inflows.
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by htdrag11 » Tue May 09, 2017 7:53 pm

Between him and Warren Buffet, I trust the latter in investment ideas with a much longer track record.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Cosmo » Tue May 09, 2017 8:07 pm

birdog wrote:https://finance.yahoo.com/news/gundlach ... 52048.html

Furthermore, he argued that pension funds are abandoning their fiduciary duty by opting for passive investments.
And so what does Jeff do? Why he goes long in a PASSIVELY managed iShares MSCI Emerging Markets ETF (EEM). Furthermore, he is PASSIVELY shorting an index. Anyone see the irony in this?

Cosmo

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by nisiprius » Tue May 09, 2017 8:28 pm

oldcomputerguy wrote:Can't say I'm impressed with his credentials as "the Bond King".
Wikipedia wrote:On March 9, 2011, Gundlach was quoted on CNBC that “Munis Are The New Subprime.” “You’ve got a history of low defaults, which is comforting. But that kind of sounds like what subprime sounded like back in 2006,” Gundlach said. Gundlach pointed out that even if defaults do not ultimately climb as high as critics like Meredith Whitney have warned, muni bonds will likely trade much lower. “Between here and the end game, lies the valley. And the valley is full of fear. I think the muni market is going to go down by at least, on the long end, something like 15 and 20 percent,” he said.

On March 10, 2011, Gundlach reportedly liquidated 55 percent of his personal holdings in municipal bonds. However, the decline he predicted did not occur and on the same day as his liquidation, the Bond Buyer Index closed at 106.151904, with this index closing at 119.886063 on December 30, 2011, the last day of trading in 2011, equivalent to an improvement of +12.9%. The index closed at 129.99416 on December 31, 2012....
Amazingly, enough time has passed that I had completely forgotten Meredith Whitney and her confident statement in 2010 that
there is not a doubt in my mind you will see a spate of municipal bond defaults ... you could see 50 to 100 sizable defaults, more. This will amount to hundreds of billions of dollars worth of defaults.... It'll be something to worry about within the next 12 months.
For quite a while people were saying "she wasn't wrong, just early" even though her prediction had specified a time frame. Can we finally say she was wrong? At this point, even if there should be a municipal bond crisis, it won't be the one she was predicting about. And, yes, at the time, lots of others, apparently including Gundlach, were going along with her prediction.
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by PecuniaryPeccary » Wed May 10, 2017 5:52 pm

nisiprius wrote:Portrait of active investors:
Image
As a professor of Classics & Art History, this made my day! :P

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by oldzey » Wed May 10, 2017 6:39 pm

Image

Hehe nisi.
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by selftalk » Wed May 10, 2017 8:10 pm

John Bogle doesn`t know anyone who can consistently BEAT THE MARKET. In fact he said that he doesn`t know anyone that knows anyone that consistanly beats the market. Now do you think Gundlach can do it consistantly ? I don`t think so. Who cares what Gundlach thinks or does in the markets. Check his record out if you will. This writing is just more Wall Street hype to generate the good ole commissions.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by jcavana1 » Thu May 11, 2017 5:12 am

selftalk wrote:John Bogle doesn`t know anyone who can consistently BEAT THE MARKET. In fact he said that he doesn`t know anyone that knows anyone that consistanly beats the market.
Buffett??

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by oldcomputerguy » Thu May 11, 2017 5:20 am

jcavana1 wrote:
selftalk wrote:John Bogle doesn`t know anyone who can consistently BEAT THE MARKET. In fact he said that he doesn`t know anyone that knows anyone that consistanly beats the market.
Buffett??
Nope. Not even Warren Buffett.
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by metacritic » Thu May 11, 2017 5:46 am

An all-time great posting. Thank you!
nisiprius wrote:I shall now prove conclusively, through dispassionate cold emotionless reasoning, the superiority of passive investing. This is tough stuff, but it's a tough world.

Portrait of passive investors:
Image

Portrait of active investors:
Image

Quod erat demonstrandum, and neener-neener.

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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by Call_Me_Op » Thu May 11, 2017 6:38 am

Jack FFR1846 wrote:The only line in the entire article that's worth reading:

Due to high costs and poor performance, actively managed funds have seen massive outflows and passively managed funds have seen massive inflows.
:sharebeer
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Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Post by birdog » Fri May 12, 2017 6:40 am

Cosmo wrote:And so what does Jeff do? Why he goes long in a PASSIVELY managed iShares MSCI Emerging Markets ETF (EEM). Furthermore, he is PASSIVELY shorting an index. Anyone see the irony in this?
I've been trying to wrap my head around that as well.

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