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A comment on Why is the stock market rallying when the economy is so bad?. Parent comment

Re:Why is the stock market rallying when the economy is so bad? by quickthrowman on Monday May 11, 2020 @09:43AM (#23142026)
How do you thinking the individual underlying shares of an equity index fund are valued? The performance of a company is analyzed, and market participants buy or sell shares and derivatives based on their analysis. You can make the argument that an over-reliance on indexing leads to less price discovery, but I don’t buy it.

The people shrieking the loudest about passive indexing are active fund managers.

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Re:Why is the stock market rallying when the economy is so bad? by softawre on Monday May 11, 2020 @11:08AM (#23142945)
Managed versus index is to me, open source versus closed source.

With managed funds, you have lots of participants out there eyeing the value of businesses. Everybody can make a buck by taking a peek.

With Index funds, we all have to trust that S&P is doing the right thing.

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Re:Why is the stock market rallying when the economy is so bad? by quickthrowman on Wednesday May 13, 2020 @11:11AM (#23167616)
> With Index funds, we all have to trust that S&P is doing the right thing.

No, you don’t. Here is the document that outlines how the S&P 500 is calculated: https://us.spindices.com/documents/methodologies/methodology...

> Managed versus index is to me, open source versus closed source.

This is also backwards, indices are transparent and open while managed funds are not.

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