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Yep, true. My point is just that indexing has nothing to do with Amazon's meteoric rise. Nor does it make the market less efficient or any other such nonsense.
by darawk 8y ago
Yep, true. My point is just that indexing has nothing to do with Amazon's meteoric rise. Nor does it make the market less efficient or any other such nonsense.
- toss1 8y agoYes, I'd guess the effect in the single-digit percentages, and being in the index didn't help GE not get dumped. Interesting question about market inefficiencies. Again, while they're not zero, I'd guesstimate them to be in the minor percentages... If Amazon suddenly adjusts their R&D spend to show the massive profit of which they're capable, or does a massive increase to go after a new market, I'd expect it to go up or down massively more than the index and drag the index along. In that respect, the index may play a dampening effect, as people invested in index funds just go along for the general index ride instead of jumping on/off the AMZN bandwagon.
- darawk 8y agoYa, if I had to guess at an effect I think that'd be it too. It ought to dampen hysteria, by keeping retail investors out of the market for the most part.