Indexing is pure cancer and it's why there are no safe sector in stocks any more due to systematic risk

Every retail investor is like "you can't outperform da market! so just buy index! super safu!! it will always go up , funds are safu !!"

Except this is exactly why the stock market has now much more systematic risk than before. It's like the financial crisis 2008, financial institutions knew some mortgages were garbage, so they "diversify", mixed them with better rated mortgages in CDOs, sell these safu CDOs to investors. We all know what happened next. CDOs became hot garbage, even though many of them were consisted mostly of "good" mortgages, but the trash mortgages dragged them down.

This is exactly what is happening now. Every braindead retail investors, rather than use their brain to pick stocks, they go the easy way and "diversify" and put money in index.

This means this bear market gonna be different. Look at MCD, WMT, they performed good during the 2008 financial crisis. This time, this wouldn't happen again. Because they gonna get dragged down with the index. When every one of these braindead zombies can't HODL much longer and decide to pull out of their beloved QQQ and SPY, every stock gonna bleed.

I find it funny how everyone here in this sub and all other financial subs including WSB still believe indexing is safu. The retail investors are really mostly just braindead idiots who cant think for themselves.

Indexing is toxic and is pure cancer to the current stock market. It punishes good stock picking and averages out everyone. It's socialized pumping/dumping. Every stocks move the same everyone gains the same and lose the same. It removes skill and experience from the market. It's an equalizer, born out of stupidity, fear, and greed.

Forget about safu sectors in this bear market. Nothing is safu any more. We are all going down.

Submitted November 25, 2018 at 12:31AM by nocehr https://ift.tt/2BweFNm