ETFs: A Triumph of the Slothful and A Guaranteed Disaster
ETFs are a poor excuse for real investing, they are a manifestation of a surrender to laziness and a bonus to wealth managers who don't do anything. but sponge off 12% of your NAV perpetually. They also guarantee their investors a 100% participation in the next market crash.
ETFs create large capital market misallocations, equally rewarding the strong and the weak .When you go to buy a suit ,do you buy every suit on the rack ? Nope, you look for that perfect suit that has the best quality, best value.and best look. Why do that when investing ?
Soon investors will realize the wastefulness of ETFs and get fed up with just average returns as the market averages revert back to a 4% annual return. They will realize that they are allocating over 95% of their capital to suits they would never wear and never want to wear and would never actively buy. Active management and deep research are worth the time spent and will be rewarded as it always has been and should be (particularly when applied to smallcaps where information inefficiencies and a higher relative cost for research prevails)
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