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How much passive investing is too much?

Warnings that index funds have broken the stock market all imply a threshold: a share of the market at which price discovery fails. Nobody making the argument names it. Owen Lamont, writing in the Financial Analysts Journal, argues that no such number exists short of complete passive ownership, and that what actually determines whether prices stay informative is who is left doing the trading. His case, the strongest peer-reviewed research against it, and what the performance

Robin Powell

A Ladbrokes betting slip beside a share certificate on a pub table, illustrating the difference between betting versus investing

Betting versus investing: why crowds win in one but not the other

Prediction markets and sports betting price outcomes almost as accurately as the stock market prices companies. A new Morgan Stanley report explains why that shared accuracy still leaves nearly every bettor poorer, and nearly every long-term investor richer.

TEBI

Aug 64 min read

A living room in the evening with a financial news broadcast playing on a wall-mounted television, a phone lying face-down on the sofa arm and a mug of tea on the side table

The 'biggest market anomaly ever found' — and why you still can't beat the market

A new working paper has documented the largest price inefficiency ever found in the stock market: a pure-news signal with a Sharpe ratio of 3.1, more than double any known factor. But the researchers used a frontier AI model, millions of news articles and institutional trading costs to find it — and the same evidence that shows markets are inefficient also shows why an ordinary investor still can't beat them.