I think indexing is great. It’s what most people should do and probably will do. No more alpha, beta, gamma, fibonacci, theta or earnings calls to worry about.
BUT, as niche as it may sound, do-it-yourself investing is bigger than ever.
For those that like being in the batters box swinging…some fun facts that give me goosebumps:
1. Last year Robinhood did $30 billion in trade executions. In 2015 they did $2 billion. Read closely you will see I was quoted in the ‘failing‘ New York Times.
2. Bitcoin was a bubble too at $1,100 a few years ago. Now not a peep from the bubble callers as Bitcoin crosses $1,200 today.
3. The best performing stocks of the last 10 years were all easy to discover and buy if you check the all-time high list even once a month. If you had a pulse, Netflix and Amazon were on your radar.
I love this from Ivanhoff:
What do all of the above stocks have in common, other than being able to grow their earnings and sales in an impressive manner? They spend a lot of time on the 52-week highs list and set up multiple times.
The U.S. stock market indexes bottomed on March 9th, 2009. A couple days later, two stocks broke out to new all-time highs. Both of them went up more than 10x after their breakouts. One was Green Mountain Coffee Roasters, which was acquired in 2015. The other one was Netflix. Netflix went up 44X in the past decade and today it is a 62-billion dollar company. In 2000, Blockbuster refused to buy Netflix for $50 million, because “it was a very small niche business”.
4. Some pretty regular people were seed investors in Uber and Snapchat. Indirectly even I did.
How great a sport is active investing when you can have shitty eyes, no strength, no speed, a bad diet, and yet have a long career.
I would argue that the more people index today, the greater the swing back one day we will see towards active.
Go Vanguard go.
Also published on Medium.