MICHEL PIREU: Index trackers are a parasite in danger of killing the host
A mixture of active and passive investing will help protect you when returns start to weaken
From author Peter Bevelin: "In nature things are not always what they seem. An ant climbs to the top of a grass stem, falls down and tries again and again … until a sheep comes along and eats the grass (and the ant). Why does the ant persist in climbing the grass? How does the ant benefit? There is no benefit to the ant. Its behaviour was manipulated by a parasitic flat worm that needed to get into the gut of the sheep in order to reproduce. "By commandeering its intermediate ant host to climb to the tips of the grass blades, the parasite increased the ant’s chances of being eaten by a grazing animal. The benefit was to the reproductive success of the parasite, not the ant. Another parasite, Toxoplasma, can reproduce only in cats. It causes rats to lose their inherited fear of cats (cat scent) and thereby makes the rat more likely to end up as cat dinner." Which leads to this from Edward Croft at Stockopedia: "In a way, index investing is the ultimate piggyback ride on the coattails...
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