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That's another common Matt Levine (the article author) theme that very large index funds are a weird form of insider trading. I subscribe to his email mailing
by VLM 4y ago
That's another common Matt Levine (the article author) theme that very large index funds are a weird form of insider trading.
I subscribe to his email mailing list which is literally his articles from the website without the infinite ads and requirement for registration and subscription.
- deleted 4y ago[deleted]
- crazygringo 4y agoIs there a good article of his to start with on that? I've never heard of that theme and I'm intrigued.
- HDThoreaun 4y agoCan't find it because he has so many articles but there was one that talks about how ESG makes sense from an index fund owning oil point of view because it's an excuse for the fund managers to basically coordinate collusion among the oil companies. If they all have the same shareholders then those shareholders can tell of them to produce less oil and the price will increase. The usual concern of defecting is taken care of because of the collusion. If one of the companies doesn't produce less the fund managers can vote them out for not being "ESG" enough.
- tedunangst 4y agohttps://ritholtz.com/2020/07/should-index-funds-be-illegal-2/ https://ritholtz.com/2020/07/should-index-funds-be-illegal-2...
- crazygringo 4y agoThanks. That's a fascinating idea. I've always found it odd that a person can buy stocks in both Microsoft and Google, for example, or both Coca-Cola and PepsiCo at the same time. For regular non-filthy-rich people it won't affect anything, but it is very interesting to think about with institutional investing. What does it mean when competitors have some level of shared ownership?