Читать книгу Active Investing in the Age of Disruption - Evan L. Jones - Страница 34

Investing in a contrary fashion to the current shorter-term trends and beliefs of the market is important to creating sustainable long-term outperformance and goes hand in hand with the ability to invest with a longer time horizon than the average investor. Investors cannot put capital behind a contrarian thesis if their thesis is not given the time to play out or if there is a high probability of a paradigm shift. The necessary time horizon to be compensated for being a contrarian has been analyzed in a number of ways, but three to five years has historically been enough time to comfortably invest behind a contrarian thesis.

The following cycle has been the challenge in the 2010s. Momentum investors have prospered and any form of value or fundamental investing has struggled. There will come a point where this cycle will break and investors will begin to lose money and start to demand earnings again. As of June 2019, we have still not reached that point.

The result of this cycle for an entire decade has been a massive increase in capital allocation to passive investing. Allocators have lost faith in active managers' ability to create alpha and become momentum oriented themselves by moving capital into various passive investing alternatives. This trend to passive investing is global in nature.