Victor Haghani interviews NYU professor Aswath Damodaran and its excellent… Here is a small piece:
“And let’s face it, most active investing is built on mean-reversion. It’s very lazy investing, there is no research that goes in. You just buy stocks with low PE ratios and high growth. Again, we have this vision of analysts as being people who dig for the truth – and that is still there. In fact, I would argue the payoff to doing research is probably greater with indexing than without it. I think there is this false vision of indexing becoming 100% of the market, and I refer people to the Grossman-Stiglitz Paradox proposed in their 1980 paper, On the Impossibility of Informationally Efficient Markets,2 which states that because information is costly to obtain, if the market were informationally efficient there’d be no compensation for obtaining the information needed to make it informationally efficient in the first place.That said, there is a potentially dark side to indexing. It has made momentum much stronger, because the nature of indexing is you pile on to whatever’s going up.”
The rest is here: https://elmfunds.com/aswath-damodaran-interview/
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