So all the author is saying is that giving a "black box" a lot of money, and letting it opaquely invest however it wants, will be a winning investment strategy in the future, even though right now it isn't working out so well.
That's the best description of a hedge fund that I've heard. Likewise, I don't see how that will ever be a winning investment strategy. You'd be better off with just an index ETF.
"Winning" is the wrong mode of thought. It's risk/reward. Index funds are low risk low reward, by design. Hedge funds are high risk high reward.
Put another way, Startups are just narrowly defined hedge funds. You can be adverse in investing in a risky startup and still be bullish about startups in general.
Except that the "high reward" part has been missing in the past several years. Hedge funds have been mostly under-performing (compared to the overall market).
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That's the best description of a hedge fund that I've heard. Likewise, I don't see how that will ever be a winning investment strategy. You'd be better off with just an index ETF.
"Winning" is the wrong mode of thought. It's risk/reward. Index funds are low risk low reward, by design. Hedge funds are high risk high reward.
Put another way, Startups are just narrowly defined hedge funds. You can be adverse in investing in a risky startup and still be bullish about startups in general.
Except that the "high reward" part has been missing in the past several years. Hedge funds have been mostly under-performing (compared to the overall market).
s/Startups/VC Funds
Also, VC Funds are Narrowly defined PE Funds, which are in turn Narrowly defined Hedge Funds [1], which in turn are narrowly defined Money Managers.
[1]a "hedge fu8nd" should be able to mimic a PE Fund if it chose to do so
As individuals we are much better off with passive indices.
In a down market, an index ETF loses money.