Say I owned a small restaurant that consistently brought in $14k/mo. Tired of managing it personally, I hire a manager, and give him a checklist of responsibil

Say I owned a small restaurant that consistently brought in $14k/mo. Tired of managing it personally, I hire a manager, and give him a checklist of responsibilities. Revenue plummets from +$14k to -$2k. I workshop it, coach the new guy, next month rolls by: -$2k again! I might give him another month or two, but sooner or later, I'm going to fire the guy and find someone else. All very rational and straight-forward. But now that most of the wagies have their pensions automatically piled into vanilla funds, this isn't how it works at all. Imagine that one of these vanilla funds now owns 100% of my restaurant. Even though they own 100% of it, the restaurant only makes up 0.1% of their portfolio. They aren't going to bother with troubleshooting anything. They will either hold on to it, and keep eating those losses, or they will sell it at a loss and move on--while dipshit manager keeps running the restaurant into the ground. One nice thing I'll say about a hedge fund is that I will occasionally see one jump-in and sort out such a mess, if only because they were the ones left holding the bag. The large stakeholders are the only ones making the market behave in a semi-rational manner. If it were up to the retail investors, it would be 100% propaganda and noise--the ouroboros--buying at 1000 P/E while huffing Zuck and Elon's farts.