Passive Investing is Hurting Active Managers
David Einhorn, President of Greenlight Capital is whining about the millions of passive investors out there. They’re mucking up his returns! How dare they! (Greenlight) It is no longer going to pay 10 times earnings for a stock expecting earnings to get 15% better and receive a 13-times-earnings multiple allowing Greenlight to make 50% over a year and a half. That’s because with the rise of passive investing, “there’s nobody who is going to pay attention to notice the earnings were 15% better … if nobody notices, nobody’s there, nobody’s going to buy, nobody’s going to care,” Einhorn said. - via Marketwatch ...