They need to rid themselves of this fatal conceit. This requires knowledge that nobody has. It emerges from society as a whole through prices.

quote:

Originally posted by jon-nyc:
They need to rid themselves of this fatal conceit. This requires knowledge that nobody has. It emerges from society as a whole through prices.

The only way that price discovery works is because everyone (or, at least, a substantial portion of everyone) thinks they can outsmart the market. If the entire world were buying index funds, and literally no one was doing active management, the price discovery function wouldn't work.