Will Passive Investors Become Taleb’s Turkeys?

Will Passive Investors Become Taleb’s Turkeys? by Alex Barrow, Macro Ops

Over a third and growing quickly. That’s the share of the market that’s now comprised of blind sheep passive indexers.

That much passive money is nothing to sneeze at. Call me old-fashioned, but I was originally led to believe that the function and role of markets in a capitalist society was to direct capital to its most productive end — you know, Smith’s “Invisible Hands” and the productivity/profit link and all that jazz.

So what happens when instead of being deployed by thinking profit-driven investors… a growing portion of a nation’s savings are invested with the same diligence generally utilized by a co-worker choosing donuts for his...