Here We Go Again...."it's Time For Active Stock Picking"

Of course this one is a perenial in the financial press. After all who would read Barrons if it eschewed market timing and stock picking

Barrons August 5

UP AND DOWN WALL STREET

Is It Time to Return to Active Stock-Picking?

As the major market averages keep rising, some folks think it’s time to ditch the passive-investing trend.

But even Barrons in the text of the article has to acknowledge

“Passive investing is in danger of devouring capitalism,” Paul Singer wrote in the second-quarter letter to his Elliott Management hedge fund investors.

That recalls last year’s rather histrionic paper from Bernstein, “Why Passive Investing Is Worse Than Marxism.” The gist of both attacks on index funds is that, without active investors diligently working to allocate capital and to hold managements accountable, our economic system would be in peril.

“What may have been a clever idea in its infancy has grown into a blob that is destructive to the growth-creating and consensus-building prospects of free market capitalism,” Singer is quoted by Bloomberg News as having written.

To be sure, we at Barron’s extol the virtues of ferreting out superior investing ideas, as we seek to do each week in these pages and daily at Barrons.com. Yet for fiduciaries charged with managing millions and billions of institutional money, the cost of actively managing stocks hasn’t translated into superior results for the median investor, let alone those on the left side of the bell curve.