This is the dumbest stock market in history

Why your stock and bond index funds outsmart Wall Street’s best and brightest

Harvard University’s, for example, totals more than $50 billion, their dollar-denominated gains look impressive. But in percentage terms, their returns are mediocre — or worse.

What other pursuit in life is there where you can beat the best and the brightest by investing in index funds and doing nothing else for 20 years?

Mark Hulbert  MarketWatch Oct. 14, 2025

https://www.marketwatch.com/story/why-your-stock-and-bond-index-funds-outsmart-managers-of-college-endowments-db81876e

There is no doubt that this is the dumbest market in history, because at this point it is completely dominated by “passive” index investing — the very definition of dumb money, 

because indexers buy stocks without any regard to valuation. 

Index funds chase the crowd, but increasingly index funds are the crowd — which is both dumb and crazy. 

The total amount of assets managed by passive investors, typically index funds, now exceeds the total amount managed by active investors, who — for good or ill — actually look at things like balance sheets and income statements before investing in a stock. 

And the current data understate the dominance of passive, valuation-blind index investing because many of the supposed “active” investors are closet indexers,

 “Passive investing now dominates the allocation of investment capital,”  “Many academics believe that the passive share is far higher because many institutional investors are ‘closet indexers.’ ” 

This is not a controversial, or even a seriously debatable, claim.

What this means is that fewer and fewer people are actually making a market in stocks using their brains. Most, as indexers, are just blindly buying — assuming that somebody else is minding the store. 

This dumb stock market, built entirely on blind faith, wouldn’t matter so much if the numbers passed a sanity test. But they don’t. Not even close.

The S&P 500 index now trades for 26 times trailing per-share earnings, far above historic norms. It sells for 40 times the inflation-adjusted earnings of the past 10 years, the so-called CAPE

According to Tobin’s Q, the market is more than twice average valuations.

But what of AI? Won’t the artificial-intelligence boom somehow magic away these worries?   Nvidia is now valued at $4.7 trillion.  

 Brett Arends MarketWatch Oct. 10, 2025

https://www.marketwatch.com/story/this-is-the-dumbest-stock-market-in-history-815aaa05

Index funds keep blowing what looks like a bigger bubble in the giant tech stocks.

https://englundmacro.blogspot.com/2024/02/index-funds-keep-blowing-what-looks.html

Passive investors have 'fundamentally broken' the market, David Einhorn says

Indexfonder är en fara för aktiemarknaden och gör börsen till ”rena Solvalla”, enligt finansmannen Christer Gardell

Being wrong and alone is what gets asset managers fired.

https://englundmacro.blogspot.com/2024/02/passive-investors-have-fundamentally.html

Wall Street 10 oktober 2025

https://englundmacro.blogspot.com/2025/10/wall-street-10-oktober-2025.html