Michel Pireu Columnist

“I personally think that indexation, which has really been a 20-25-year phenomenon in terms of raising assets and becoming unquestionably the dominant investment strategy, is just about ready to come to its end,” says Murray Stahl, CEO of Horizon Kinetics. “And I say that because I think the index methodology is going to prove, at the end of the day, to be stenotic, narrowing to the point of failure.”

The problem is not that something horrific will befall the largest investments, though that can happen, of course. The problem is that some other group in the index will become desirable, but its exposure will have become negligible within the index as it gets crowded out. Hence, no matter how high the return of the negligible part of the index, it will have virtually no effect on the total index...

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