#31: Rob Arnott On Engineering A Better Index
Superinvestors and the Art of Worldly Wisdom
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The Problems With Passive Investing
The more expensive an asset is, the more weight you want to have of it in your portfolio. The equally weighted stock market continued to go up for two years after the tech bubble burst. You can reverse engineer what the implied return expectations are using optimization mathematics. That means that when a stock doubles in price, your return expectation for that stock is higher than it was before it doubled.
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