Masters in Business Rethinking Investing with Greenwich Associates' Charles Ellis
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Feb 21, 2025 Charles Ellis, a finance expert and founder of Greenwich Associates, shares his impressive journey in the investment world. He discusses his new book, 'Rethinking Investing,' and reflects on the evolution of investment strategies. The conversation delves into the importance of embracing passive investing and index funds to combat common investor underperformance driven by psychological factors. Ellis emphasizes the necessity of long-term thinking and adaptability in a rapidly changing marketplace, offering valuable insights for aspiring investors.
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Investing Landscape Shift
- The investment world has transformed drastically, with increased information availability, regulations, and computing power.
- This makes it harder for active investors to outperform the market.
Indexing's Rise
- Increased market efficiency and readily available information make it difficult for active investors to gain an edge.
- High fees further hinder active investors' performance, making indexing a more sensible approach.
Behavioral Biases in Investing
- Behavioral biases, like overconfidence, lead to investment mistakes.
- Daniel Kahneman's "Thinking Fast, Thinking Slow" provides valuable insights into these biases.
