Posted 2/8/2024, 7:08:00 PM
Hedge Fund Manager Warns Broken Markets Fuelled by Passive Investing Boom
- Markets are "fundamentally broken" due to the rise of passive investing, argues hedge fund manager David Einhorn
- Passive investing causes distortions, with money flowing out of value stocks and into overvalued growth stocks
- This vicious cycle further penalizes active value investors, leading to forced selling and lower value stock prices
- Einhorn has adapted his investing strategy for this new environment, looking for deeper value opportunities
- The influx into passive funds has now surpassed active funds in terms of total assets, reaching a new milestone