Well McDonalds may not accept a pig but would the manager accept a 1/4 ounce gold bar or coin for a few shakes? If you were the manager would you?
This whole issue is about as meaningful and constructive as the unending stream of threads that ask if trading is really gambling.
Lol ..waste of time probability = high, reward = low, risk??? Unknown. But at least it is getting a few views by the really smart people???
Lots of holes in this articles logic. if the active investor is 'doing their own research' or 'relying on a financial advisor or mutual fund that does its own research,' they can thank those "over-payed do-nothing ceos" for providing the value of organizing a company for the active investor to turn to in order to pay someone who will gladly do the research for them. Second: if a passive investor "just buys and index fund, sits back and enjoys the show,' thus 'piggybacking on the active investors research,' then the active investors research is INHERENTLY a waste of time, isn't it. Months of due diligence only to discover that the best thing to do is to throw the money into an index fund. Earned the right to it doesn't matter. People should get that out of their head. Third: A passive investor DOES add to price discovery. They will, at some point on a higher timeframe, decide to SELL what they initially BOUGHT. So this is hilarious to me. If they don't sell on their own decision, they will likely have a stop loss where they will sell. All of these sales add up to red tape, so yes, this WILL accelerate selling, but at the same time, active investors will be piling on with their own short sales, buying the (f*ing) dip, and entering into new PASSIVE positions.
Really well written post, but if I may say, active investors can get a better return than index returns. I know a guy who invests in sub $5 stocks (or something) and he is basically a member of the companies. He knows everything going on, on first name terms with CEOs and he is loaded up his ass from his investments. I'm sure there are equivalents for technical traders which is another form of active investor.
Thanks a lot nooby, I played devils advocate to think about this. Keep in mind I'm 'just a day trader' but I have nothing bad to say about any strategy that is profitable. I do however have a problem with the cognitive pollution that is the half-baked philosophizing in the article because it serves as the foundation for which we make our decisions. I sound like a stickler. There is a lot I need to learn myself. If someone has a strategy for the market, I am all ears to hear it and possibly incorporate aspects of it in pursuit of profitability and risk management. I believe there are tools for every job but more than one way to skin a cat. Rambling now, just want to keep the thread going. Excited to see where it ends up. Perhaps this article serves a purpose by sparking this conversation.