Ask HN: What's a good tool for building a personal academic website? - <AUTHOR> I've been advised that I should make a personal webpage, and my institution does give me space for one.  What's a good tool for building the content?
I mostly just need to be able to list contact information, a picture, a publication list (God willing I'll have a publication one of these days), and random notes on whatever courses, teaching, and research I'm up to at the moment.
The constraint is that I know jack about hand-coding HTML, Javascript, or any of it.  Sorry.
Ideas? <comment><USER2> You may find what I did[1] in the same situation interesting. Although this was before I discovered the plethora of existing static site generators. I actually just rewrote my blog to use nanoc[2].

[1] [http://michael.mior.ca/2010/12/02/blog/designing-an- offline-...](http://michael.mior.ca/2010/12/02/blog/designing-an-offline- cms.html) [2] [http://nanoc.ws/](http://nanoc.ws/)

<comment><AUTHOR> I think nanoc or Hakyll are more what I want: simple, static site that directs cleanly to text, mathematics, and downloadable files. Thanks!

<comment><USER2> Yeah, I don't really like my solution much either anymore. You should be able to get nice equations via LaTeX in any static site generator with MathJax[1]

[1] [http://www.mathjax.org/](http://www.mathjax.org/)

<comment><AUTHOR> Actually, Hakyll lists itself as including Tex support.

<comment><USER2> Cool! I hadn't heard of Hakyll before, but maybe this is a good excuse for me to learn some Haskell. I'm quite happy with nanoc for the time being now. I found the other solutions I tried at the time to be a bit too complex.

<comment><AUTHOR> >maybe this is a good excuse for me to learn some Haskell

I'm already learning Coq, so this is kinda the thought that went through my mind.

</comment></comment></comment></comment></comment></comment><comment><USER3> Mhm. This one is a bit of a long shot, since it requires you to use emacs, but if that isn't a hurdle, have a look at org-mode.[1]

Org-mode has a pretty intuitive mark-up syntax and can export naturally to pdf (via LaTeX), odt and html (this is what you want)[2]. It uses a publishing module[3] with which you can also directly upload to a server via ssh/scp/sftp, and it allows you to specify extra files that should be uploaded with your main file (css, images etc). It deals neatly with internal and external links, internal links (inside or between your org-documents) are neatly converted for html. As a bonus, you can just stick your org-files into git/svn/bzr, i.e. a version control of your choice, since they are simple plaintext (though, again, it depends whether this is relevant for you).

[1]: [http://orgmode.org/](http://orgmode.org/)

[2]: [http://orgmode.org/manual/Exporting.html#Exporting](http://orgmode.org/manual/Exporting.html#Exporting)

[3]: [http://orgmode.org/manual/Publishing.html#Publishing](http://orgmode.org/manual/Publishing.html#Publishing)

</comment><comment><USER4> Strikingly or Square Space could be a good fit for what you need. You don't have to know how to code and can choose from layout options to customize features.

[https://www.strikingly.com/](https://www.strikingly.com/) [http://www.squarespace.com/](http://www.squarespace.com/)

They charge a monthly fee but would take care of hosting for you which saves you from having to buy a URL and host it somewhere. If you already own a URL you can point it there too.

</comment><comment><USER5> I actually thought about making this once - a CV generator that gives you a PDF and HTML files back, with a few themes to choose from. The idea would be that you can update it at any time through the system, and it would keep track of changes; maybe, eventually, this would feed into a network of sorts (think: who achieved my degree 6 years before I got it?).

Some word processors may be able to do this, but not to this level, certainly.

</comment><comment><USER6> I would use www.webflow.com to build your pages, and then take the output CSS, HTML and JS that it exports and upload that. You could probably make a static CSS and a static JS that works for all of your pages and then just reference that in all of the others.

</comment><comment><USER7> Some great options here though most require some technical skill. Striking.ly is a YC company helping people build really simple and beautiful websites with no code.

[http://striking.ly](http://striking.ly)

</comment><comment><USER8> Jekyll is nice for running a local blog that you can upload to a server as static HTML - [http://jekyllrb.com/](http://jekyllrb.com/)

</comment><comment><USER9> wordpress

about.me

onepagerapp.com

<comment><AUTHOR> I don't think I can put up a blog engine or a link to an external site. The point was more to produce files that I can actually place on an institutional server, in plain HTML, from which they will be served.</comment></comment>


"Always Connected" Windows on ARM machines coming this quarter - <AUTHOR> https://arstechnica.com/gadgets/2018/02/always-connected-windows-on-arm-machines-coming-this-quarter/ <comment><USER3> "Always Uncontrollable" might be a better term...

[https://docs.microsoft.com/en-us/windows- hardware/design/com...](https://docs.microsoft.com/en-us/windows- hardware/design/compatibility/systems#systemfundamentalsfirmwareuefisecureboot)

 _The firmware setup shall indicate if Secure Boot is turned on, and if it is operated in Standard or Custom Mode. The firmware setup must provide an option to return from Custom to Standard Mode which restores the factory defaults. On an ARM system, it is forbidden to enable Custom Mode. Only Standard Mode may be enabled_

 _Disabling Secure Boot must not be possible on ARM systems_

Edit: this mainly concerns the deeply-embedded "phone home" functionality that Win10 has, which from what I've read is nearly impossible to disable even if you have full administrative access. With a cell radio, firewalling might not be possible either.

<comment><USER4> ... combined with the longstanding security design flaw of integrated processor/baseband chips. I don't know what I dislike more - having a "secure boot" system that is designed to keep me out, or having (what the user considers) the main CPU essentially under the control of a public communication network to let others in - but "luckily" this way we don't have to choose!

<comment><USER3> The only hope is that someone finds a local vulnerability that can do the same thing as rooting Androids or jailbreaking iDevices, and that may happen if these become popular enough.

...although calling that "Administratoring" just doesn't have the same catchiness to it. ;-)

<comment><USER5> Breaking Windows, perhaps?

</comment></comment></comment></comment><comment><USER6> Windows 10S on ARM w/ built-in LTE? Depending on where the price levels off with these things, I think they could realistically carve a solid chunk out of the Android tablet market and the (non-education) Chromebook market

<comment><USER7> Not without Android apps supported. Or iOS apps.

<comment><USER8> Or, I would suppose, x86 and x64 apps. That's the main reason I run Windows; the mile-wide app compatibility.

Looks like at least 32bit x86 apps will run. [http://www.zdnet.com/article/windows-10-on-arm-it-will-be- mo...](http://www.zdnet.com/article/windows-10-on-arm-it-will-be-more-limited- and-heres-how-reveals-microsoft/)

<comment><USER6> They say x86 apps will run under emulation. I've got no clue how well that will work in practice, though.

Edit: found this ARM compatibility chart in the zdnet article

[https://zdnet3.cbsistatic.com/hub/i/r/2018/02/19/b2c823f6-76...](https://zdnet3.cbsistatic.com/hub/i/r/2018/02/19/b2c823f6-760a-4734-aac8-35defa44f44d/resize/770xauto/372e498c733686d87fb65096ee50fbd1/ascreen- shot-2018-02-19-at-11-37-54.png)

And I get that you use x64 Windows for the compatibility, but this isn't supposed to replace that Windows. This is a product for an entirely different market: the market for tablets and netbooks.

<comment><USER8> Understood. But for me at least I can enjoy the same functionality with my old Toughbook carrying a few extra batteries :-) (Yes I understand not everyone wants to do that.)

<comment><USER6> Oh, totally. I think these LTE ARM Windows devices are neat; I don't think they're for me, though.

</comment></comment></comment></comment></comment></comment><comment> dis-sys Intel threatened to sue for its x86 IP violation. The timing is just great for Qualcomm's board who is defending itself from Broadcom's acquisition - <USER2> something clearly not going to make a big profit but big enough to be sued by Intel, surely this is going to convince Broadcom to walk away.

</comment><comment><USER9> Windows S mode only allows appstore, no side loading. How are Windows app developers reacting to the 30% store tax? Are they raising prices for apps or skipping the appstore and ARM altogether?

<comment><USER10> They are ignoring it. No sane person is going to use windows s.

<comment><USER11> Other than some dev tools and some games, all my software comes from the MS Store.

It's also the best place to find touch & pen friendly apps that take full advantage of modern Windows 10 features, which are aimed at these devices.

Most people will do fine with Windows 10S.

<comment><USER10> > all my software comes from the MS Store.

Can you give me some examples? I only know of the netflix app which is even remotely useful.

The most important app for many people is the browser, and afaik firefox/chrome are not available on the store. Makes the OS a complete non- starter IMO.

</comment></comment></comment></comment><comment><USER12> More expensive than a low end intel notebook but also worse specs except battery most likely with a locked windows only bootloader No x64 emulation x86 emulation but doesnt support opengl beyond 1.1 some DRM systems don't work shell extensions are not supported (affects dropbox, 7zip etc)

Honestly basically everything went wrong. Don't buy this unless you only use windows store apps.

</comment><comment><USER13> I wonder why none makes decent ARM linux laptops. The market is ripe for disruption after Apple turned off developers with their latest Macbook Pro offerings.

<comment><USER14> I wish someone would. I've been an Apple evangelist for 20 years and I'm now in the awkward position of needing a new laptop for my professional life... and Apple doesn't make one that I want to purchase. Their Pro line has given up too many features in the name of gimmicky crap (the touch bar was DOA) and the MacBook Air line has given up too many features in the name of ever increasing thinness. It's beautiful, but I need a machine I can pay my bills with, not stare at longingly—these aren't mutually exclusive. Up until a couple years ago Apple had made the only laptops I even considered for over a decade.

Now I'm looking at surface books. Blerg.

</comment></comment><comment><USER15> Wow, paying money to have a large corporation invasively coerce me into agreeing to adopt obligations that only benefit them?

Where do I sign up?

</comment><comment><USER16> _In a significant shift in how Microsoft and partners will be positioning these new devices, the branding "Always Connected" will be used to refer to devices running Windows 10 on ARM._

Wow! That is probably the dumbest branding I've ever seen! "Always connected" sets off an alarm in my head thinking "I cannot use this without internet. This is full of DRM. This device is controlling me rather than the other way around". How is it always connected? What is connected? It's Win10 on ARM.

</comment><comment><USER17> > Surprisingly, Best Buy—arguably the most important brick-and-mortar computer > retailer in the US—isn't included in Qualcomm's list. If this absence is > accurate ...

Tsk, sounds like Intel abusing their market dominance again.

<comment><USER6> The way Arstechnica phrased that made me think that Best Buy was missing from a list of several other brick-and-mortar chains--Microsoft Stores are the ___only_ __brick-and-mortar stores in the USA that have been announced[1].

"Beginning this calendar quarter, these Always Connected PCs are expected to be available online and hitting store shelves at the following leading retailers:

* U.S.A – Amazon.com, Microsoft Stores"

[1] [https://www.qualcomm.com/news/releases/2018/02/21/qualcomm-a...](https://www.qualcomm.com/news/releases/2018/02/21/qualcomm- and-microsoft-collaborate-leading-retailers-distribute-always)</comment></comment>


32 cores of fast ARM in half-depth 1U case - <AUTHOR> http://www.baserock.com/

<comment><USER2> Calxeda has been building 16 core cards[1] for awhile now with about 18 fitting in a 1U-sized box[2], each card connected by 10GbE similar to this[3].

[1]: [http://www.calxeda.com/technology/products/energycards/quadn...](http://www.calxeda.com/technology/products/energycards/quadnode/)

[2]: [http://semiaccurate.com/2011/11/03/calxeda- launches-a-4-core...](http://semiaccurate.com/2011/11/03/calxeda- launches-a-4-core-arm-server-chip/)

[3]: [http://www.calxeda.com/wp- content/uploads/2012/06/EnergyCard...](http://www.calxeda.com/wp- content/uploads/2012/06/EnergyCard-Product-Brief-612.pdf)

<comment><USER3> Not to mention Tilera, who makes 36-core chips/cards [1], with 4 in a 1U box [2], with each processor with connected to each its four neighbors by a 250 Gb/s link.

[1] <http://tilera.com/products/processors/TILE-Gx_Family> [2] <http://tilera.com/products/platforms> [3] <http://www.tilera.com/technology>

<comment><USER4> But Tilera uses its own architecture, ARM on the other hand is nearly everywhere.

There were other companies like Tilera: Transputer, Connection Machine.......SiCortex was founded in 2003 with a similar idea and was shutting down by 2009

The problems with these architectures is cost: mass market tech like x86 and ARM offers more bang for your buck

</comment></comment></comment><comment><USER5> Not a 32 core computer. It's 8 4-core SoCs with independent storage connected by a 5 Gbps network switch. Not a useless machine (it's a cheap way to buy lots of DRAM bandwidth, I'll note), but not what the headline is selling as.

<comment><USER6> Did the headline change? The one I see now just says that it's 32 cores in a tiny box, not that it's one machine specifically.

<comment><USER5> I didn't say it was factually incorrect, I said (implied, I guess) it was misleading. You're seriously saying you read that and understood it meant 8 (!) distinct machines on one board?

<comment><USER6> I read it and understood it was a lot of cores in a small box. I presumed they weren't actually one machine, yes; but I didn't feel the headline was trying to imply anything either way.

</comment></comment></comment></comment><comment><USER7> Looks neat. It should have a redundant power supply though. With redundant power just one of these could be a good platform for deploying fault-tolerant services.

<comment><USER8> I think the point of this kind of server is to build the fault tolerance at the rack, or at least 1U, level, not at the level of individual components.

If an individual server fails then your service shouldn't even blink.

</comment></comment><comment><USER9> The picture shows 8 tiny fans mounted inside (not counting the fan probably inside the PS)

I would have thought that part of the reason for going to ARM is the low power - hopefully no moving parts. It would have been cool (ha) to see them pull it off without fans.

<comment><USER10> When you have 608 of those in a rack I think the fans are very welcome :)

</comment></comment><comment><USER11> 2GB per node - not enough IMHO (at least for the use I was thinking of ).

</comment><comment><USER12> Cost?

<comment><USER13> At first I thought it was just a marketing page to see if there is interest, but on the spec sheet it says "Order now from Codethink for September delivery", but again, no price

</comment></comment><comment><USER14> What is the advantage of a half width server?

I mean with all the connectors on it it isn't like you can put two of em into a 1U slot.

<comment><AUTHOR> Half depth, not width. Everything comes out the front, so you mount them back- to-back in a rack.

<comment><USER15> Been a while since I was heavily involved in high-density data centers... How does that work with traditional hot aisle/cold aisle layouts? Seems like you'd need to adjust the cooling to have an air channel up the middle of the rack?

<comment><AUTHOR> You could do, or have one of them exhaust to its "front", and the other exhaust to its "back".

<comment><USER14> So the one at the "back" is getting pre-warmed air. Wouldn't this be a problem?

*Note I am used to normal data-centers but not high density stuff. I don't know of the special provisions a high-density setup would have.

<comment><AUTHOR> In general, high-density or supercompute systems are installed with custom racks, cooling, power supplies, etc. This doesn't need anything custom, just something that isn't always the default in some DCs.

They're ARMs, they don't need much cooling anyway.

</comment></comment></comment></comment></comment></comment><comment><USER16> From my understanding of ARM architecture, ARM cores cannot process heavy data loads in a power-efficient manner, making TDP under heavy server conditions prohibitively high. Am I right about this? I've never tried making an ARM server of my own.

<comment><AUTHOR> What understanding is it that you have that suggests that? It can shovel data via DMA as well as the next architecture.

<comment><USER16> Well I'm not referring to reading/writing from a data store, but actually processing the data in registers and such. Arithmetic operations and that sort of thing.

<comment><AUTHOR> High-density ARM servers are not ideal for every application. However, there are plenty of applications where you don't need massive amounts of computational grunt in each CPU, such as web serving, hadoop, mail and DNS servers, etc. Also, the density and lower power/cooling requirements can often offset the lack of performance. Each slab has a 260W PSU. The whole system can't pull more than 260W, ever. Some Intel CPUs need 200W just on their own.

</comment></comment></comment></comment><comment><USER17> Imagine a Beowulf of those!

<comment><USER18> I know you meant that as a joke, but I'd imagine one of these really would be an excellent candidate for being turned into a cluster.

<comment><USER17> I meant it as a joke, while also recognising that it would be ideal for being turned into a cluster. It's made me nostalgic about the days when I built Beowulfs at university!

</comment></comment></comment><comment><USER19> Completely random, but I think it is funny the company is named "CodeThink Limited." That can't be good.</comment>


Dragons Den scandle of investments are in fact loans for stock. - <AUTHOR> http://www.dailymail.co.uk/news/article-1303097/Dragons-Den-winner-reveals-80k-promise-fact-loan--26-500-emerged.html?ito=feeds-newsxml

<comment><USER2> This doesn't sound like a loan to me - it sounds like a contract where the party buying equity is given priority on dividend payments, which as I understand it is reasonably common.

Of course, the money not actually appearing is a different matter.

</comment><comment><USER3> When someone asks if you need a lawyer, it's not actually a question.

</comment><comment><USER4> These companies are really unlikely to ever get acquired, how, other than with a loan, are the investors meant to get liquidity on their investment?

<comment><USER5> > unlikely to ever get acquired

Not true, if you have a cash flow positive business, it can and will sell for the right price (not nearly what a public company trades for though unfortunately.)

Also, how about dividends?

I watch the Canadian or US (not sure which it is) version of this show and I have encountered several of the products I have seen on the show later in stores. Just this weekend, I saw some childrens play-dough (there was something special about it that I can't recall) being sold in Costco. This product was developed by a young guy living in a small town of about 200 people. Getting a product into a store as big as Costco is a godsend for most people. Even if you have to give up 80% of your company, you'll likely still do better in the end.

It seems the British version of this show is a tad unscrupulous however.

<comment><USER6> I think at the worst, this shows one member of the Dragon's to be unscrupulous. Duncan Bannatyne has posted a copy of his contract on his personal website, which shows a normal equity stake.

James Caan on the other hand has spent his time and resources trying to get the book banned (at least according to Tweets by his fellow Dragons).

</comment></comment></comment><comment><USER7> _"Well, you're not going to rip me off are you, because you've got a lot more money than me."_

That's pretty faulty reasoning.</comment>


Software patents are crumbling, thanks to the Supreme Court - <AUTHOR> http://www.vox.com/2014/9/12/6138483/software-patents-are-crumbling-thanks-to-the-supreme-court <comment><USER2> It's time for Congress to do their bit and suspend assumed patent validity for this broad class of patents. Its clear the review process was yielding vast quantities of invalid patents. Making the courts invalidate them one-by-one is crazy. Classifying them all as assumed-invalid would send a very clear message to the patent office that it seriously fouled up and needs to straighten up in evaluations, and also let patent trolls know that their payday is over. Proving validity puts the technical burden on the patent troll, which in almost all cases would be nearly insurmountable, since virtually all these patents would likely be recognized by juries as obvious and invalid.

<comment><USER3> You'll have IBM and many others throwing a fit when their licensing deals are invalidated indiscriminately.

</comment></comment><comment><USER4> I'm not so optimistic as the article. The CAFC has lots of judges that came up as patent attorneys, and who are true believers in the patent system. The June decision by SCOTUS wasn't the first time the Court slapped down abstract patents. The CAFC always finds new ways to get around what SCOTUS has tried to be clear about.

On top of that, people underestimate the amount of shenanigans that patent prosecutors pull during patent drafting and prosecution.

I don't think we will see an improvement to the trolling situation until Congress steps in and changes some of the burdens and fee-shifting standards for patent litigation.

Trolls need to have less weapons they can deploy to raise litigation cost, and they need to be made to suffer for bringing BS cases against innocent companies. Only Congress can make that happen.

Intellectual Ventures and its ilk are not going to sit idly while entrepreneurs and tech companies go to Congress to get reform laws passed. They will bring out the big cash piles, just like Comcast does for Net Neutrality.

And patents isn't even as cut and dry as Net Neutrality. The minute you start talking about patent reform, some well meaning person, who has no idea what they are talking about, will bring up that movie about that inventor, who was cheated by that big company, out of his hard earned inventions.

<comment><USER5> Yes, reminds me of that movie "Hot Coffee". Basically negated by "Enigma Cheers" on amazon.com:

[http://www.tripperjones.com/stuff/hot_coffee_critique.txt](http://www.tripperjones.com/stuff/hot_coffee_critique.txt)

</comment></comment><comment><USER6> It's worth noting that the ubiquity of these "on a computer" type patents and similarly questionable other software patents is directly a result of the poor handling of the entire patenting process as well as general incompetence Ex: [http://arstechnica.com/science/2014/02/uspto-issues- patent-f...](http://arstechnica.com/science/2014/02/uspto-issues-patent-for- fraudulent-stem-cell-procedure/)

</comment><comment><USER7> Is "on a computer" the real problem here? The problem I'm seeing is that we have things like displaying a linked list, which is trivial, being awarded patents by appending "on a mobile device" or "on a web page" or "On a payment system."

I just don't think its possible to have software patents that make sense. Abolishment of software patents seems to be the only sane move here.

<comment><USER8> > we have things like displaying a linked list, which is trivial, being > awarded patents by appending "on a mobile device" or "on a web page" or "On > a payment system."

Citation needed.

</comment></comment><comment><USER9> Most of these are district court cases. The USA has a patent appeals court, the Court of Appeals for the Federal Circuit [0], that takes all patent appeals nationally. The doctrine about "do it on a computer" patents will be formed by three judge panels chosen randomly from that appeals court, not by the districts.

But the very good sign from these cases is most were decided on the pleadings. That means there was no expensive discovery or claim construction procedure, much less a jury trial. A decision on the pleadings means that even in the best possible light, the patent holder doesn't have a case at all according to the judge. There is no cheaper way to dispose of an expensive and lengthy lawsuit. And a rule that can be disposed of on pleadings is exactly what reformers wanted from the Supreme Court.

The CAFC has seen a few of these and so far Taranto and Hughes, two of the newest Obama judges, have acquitted themselves superbly. We have well written and conclusive decisions from them calling the whole "do it on a computer" mess ineligible.

We'll have to wait and see how the more enthusiastic radicals for patenting everything influence the outcomes. Three judges that wanted to hand a monopoly on the centuries old, trillion dollar financial settlement industry to Alice even when no technological procedures were disclosed in their patent are still on the court: Moore, O'Malley, and Newman. Lourie was the swing vote in that decision and also says that Ultramercial [1] should have a monopoly on interstitial internet advertising because they wrote the century old idea up with 'on the internet' tacked onto the end. There are eleven judges and one empty slot on the CAFC so those four make up a large minority that will likely press for "on a computer" patents to come back.

Chief Judge Prost, Judge Dyk, and the three new Obama appointees seem much more rational and good for our industry. We should hope they are the ones who shape the interpretation of Alice in the future.

And remember that while "on a computer" patents -- the ones that describe a conventional business and add "on a computer" or "on the internet" without anything added to known technology -- are falling, lots of damaging software patents are still out there and apparently unharmed. The h.264 and mp3 patents that block open and free media players and browsers are still functioning. The ZFS and JFS patents that make BTRFS illegal are still out there. The compiler and VM patents from IBM, Sun, and others that hang over the head of anyone who writes either still exist. The long filename patents and others that Microsoft uses to tax Android are still taxing. The UI patents on smartphones that drive the smartphone wars are still driving them. New patents on computer vision, deep neural nets, machine learning, GPU computation, multithreading techniques, and more are being granted every tuesday.

Lucky for us, software patents that are on actual software are a lot less lucrative than the ones on business "on a computer." Even in smartphone litigation, most of the money verdicts depend on the shape of the box a smartphone comes in; don't steal the idea of a rounded rectangle and your lawsuit will be for tens of millions instead of billions. Still, every kind of software patent is bad, dishonest, and harmful to our industry and progress. They all need to go.

[0] [http://en.wikipedia.org/wiki/United_States_Court_of_Appeals_...](http://en.wikipedia.org/wiki/United_States_Court_of_Appeals_for_the_Federal_Circuit)

[1] [http://www.patentdocs.org/2013/06/ultramercial-inc-v-hulu- ll...](http://www.patentdocs.org/2013/06/ultramercial-inc-v-hulu-llc-fed- cir-2013.html)

<comment><USER10> "Still, every kind of software patent is bad, dishonest, and harmful to our industry and progress. They all need to go."

I don't agree.

If a genuine invention is made which contributes to the state of the art and is significant then there are two options for monetizing it. It can be patented, or it can be kept secret.

Which is more damaging?

<comment><USER11> This is a false dichotomy.

If someone makes such an invention, there is no incentive to keep it perfectly secret (i.e. hide it in a filing cabinet and make no use of it that might hint towards its existence) -- other than sheer paranoia or vanity.

Instead they will either sell it like any other trade secret or make use of it. If they make use of it and it gives them a notable advantage over competitors, the competitors will seek to either reverse engineer the invention or invest in finding something that works equally well or even better. If the competitors succeed, the original invention becomes obsolete (rendering knowledge of it less valuable) or common knowledge.

What's more, a competitor or a non-commercial organization might decide to publish their findings for various reasons ranging from harming the original inventor by eliminating their advantage to benevolence / publicity / "fostering innovation".

In the current situation a lot of patents are flat-out useless to anyone but the holder. They either describe something that is blindingly obvious ("X on a computer"), something that is already common knowledge (but nobody bothered patenting before) or that is so vague the description itself is worthless to anyone seeking to copy the idea when the patent has expired.

Patents are supposed to be a fair deal between the public and the applicant: the applicant is offered legal protection to maintain a monopoly in a technology they created for a limited amount of time but in return they have to disclose their technology so anyone can copy it once the protection expires.

If you take away that benefit to the public, it's just a blessed monopoly that can be used to extort anyone who independently comes up with the same idea (or shares the same common knowledge on which it is based). Even with that benefit to the public most software patents would still be harmful because of their insane longevity -- the software industry is disrupted on a monthly, weekly or even daily basis, but patents can be maintained for more than a decade.

What's so bad if software patents were abolished? Copyright would still exist. Trade secrets would still exist. Trademarks and trade dress would still exist. NDAs and other legally binding agreements would still exist. At this point the benefits of software patents are theoretical at best -- every single tech company out there could potentially be sued into oblivion if they were to pop up on the radar of a patent troll. Patent infringement has become SOP for software companies -- not because they don't care about other people's IP but because it's simply impossible to license every single "invention" your company uses (and let's not get started on what the situation looks like for contractors).

<comment><USER12> This is a very narrow view of reality.

1\. It's not vanity or paranoia, ideas do get stolen, bringing down startups and setting back careers. I personally know of startups get ripped off by the big guys as well as entire research papers being ripped off from professors.

2\. Reverse engineer Google's or Facebook's infrastructure, if it's that easy. Conversely, I've seen people reverse engineer a product from its wireless signals. It probably took years to build that product, but was reversed inside a week. Similarly, it took Apple years to create and refine the iPhone UI, and it took Android only a year to copy it. How is that fair? Secrecy works only if your advantage is never exposed to the outside world, like when it's hidden away in datacenters. And when it does work, how is that good for advancing the industry?

3\. Your view assumes that every inventor can bring the invention to market. Look around you - you are surrounded by technology that requires thousands of different components and suppliers to make (of which of software is just one) and one could invent an improvement to any of them. Example: you thought of a more efficient way to transmit AC over power lines. How do you make, use or sell it? Do not assume you work for a power company.

<comment><USER13> "Fairness" was never the point.

The original ( _written_ , at least) intent of the patent laws was "to advance the state of the art". Fairness to the inventor never enters into it, except to the degree that such a thing is necessary to motivate inventions; if you agree with that, then the patent laws should probably be mostly dismantled.

<comment><USER12> "Advancing the state of the art" like all things in patent law, was deliberately broadly written because there are thousands of ways to do so and infinite multitudes of nuances to consider. Fairness absolutely was, and always has been, one of the main points. In fact, all property rights concern fairness, and intellectual property rights are no different.

</comment></comment></comment></comment></comment></comment><comment><USER14> Nice development for trivial patents, but it makes me wonder if this could lead to people having to defend their (e.g., algorithm) patents by appeal to computational complexity or the physical constraints of human vs. computer memory, etc.

</comment><comment><USER15> What exactly can you say except, about fucking time!

A small amount of common sense finally managed to stick to lawyers and the legal profession.

Probably won't last. Lawyers get jealous when they can't control and manipulate the little people.

<comment><USER16> Why do you say that about lawyers moreso than software engineers or doctors?

<comment><USER17> Statistical representation in society's positions of power

</comment></comment></comment><comment><USER18> Well, I'm glad SCOTUS seems to be doing something right. So much of their decisions seem to be on the side of entrenched/powered/moneyed interests, whether its the dismantling of the Voting Rights Act and campaign finance reform, or the granting of increasing rights to corporations (like Hobby Lobby).

<comment><USER19> Its a conservative Supreme Court that had come down strongly in favor of free expression and religious freedom. E.g. Brown v. EMA, the video game free speech case. Different sides of the same coin.

What is insane to me are people who agree with Brown but disagree with Citizens United. A political movie isn't free speech, but Grand Theft Auto is?!

<comment><USER20> Well, and for that matter, Hobby Lobby.

To me, the common thread is that they all come down on the side of greater freedom of expression and freedom to take actions consistent with beliefs. But both the Citizens United and Hobby Lobby decisions are anathema in circles such as many tech communities. I suspect a lot has to do with personal disagreement with the beliefs of the organizations involved even though the discussion often gets reframed. Around catchphrases like "corporate personhood" in the case of Citizens United.

<comment><USER21> _even though the discussion often gets reframed. Around catchphrases like "corporate personhood" in the case of Citizens United._

That's a funny one to listen for: people who think that _Citizens United_ had anything to do with corporate personhood.

<comment><USER20> In general, people are probably wrong to do so but "corporate personhood" was widely tossed around in the context of the Citizens United decision: [http://www.theatlantic.com/politics/archive/2012/07/the- supr...](http://www.theatlantic.com/politics/archive/2012/07/the-supreme- court-still-thinks-corporations-are-people/259995/)

(Not sure you were saying otherwise.)

As a soundbite, it's such a red herring anyway. Of course corporations act like individuals in some ways (and not in others). Corporate entities can enter into contracts that aren't tied to a particular employee. They generally have freedom of speech. But they can't be put into prison (except metaphorically.)

<comment><USER21> To be fair, that guy is a politician, who makes his hay by deliberately confusing the topic.

</comment></comment></comment></comment></comment></comment><comment><USER22> This might explain layoffs at king of all patent trolls IV: [http://www.businessweek.com/articles/2014-08-19/intellectual...](http://www.businessweek.com/articles/2014-08-19/intellectual- ventures-layoffs-hit-a-fifth-of-its-workforce)

</comment><comment><USER23> Superman III and Office Space being mentioned in a District Court decision. That's awesome.

</comment><comment><USER24> Glad to see how the courts are taking this up. Maybe they will torch the laser pen pointer annoying cats patent too!

</comment><comment><USER25> Software patents exist, in part, because the programmers writing the software are helping to patent their "inventions". Often the programmer's employer offers a juicy cash bonus for each patent filed or granted. If you want to help end software patents, put your money where your mouth is and refuse to participate when your employer waves a $1,000 check at you to help them patent your linked list visualizer.

<comment> loup-vaillant You can't expect people to pay a great personal (opportunity) cost for the benefit of society. Some do (give to charity and all), but most don't.

'Cause it's not just the $1000 check. If you refuse, that will likely be bad for your career. Don't underestimate the nuisance power of your boss.

</comment></comment><comment><USER26> Can't wait to see Amazon's "One Click Buy" patent dismantled. It's way overdue.

</comment><comment><USER27> this article is about patents, and there's a mention of superman in there.

</comment><comment><USER28> One can hope.</comment>


Million Dollar Homepage - <AUTHOR> http://www.milliondollarhomepage.com/

<comment><USER2> It was a pretty clever idea (2005) and it certainly paid for the kids tuition...

<http://en.wikipedia.org/wiki/The_Million_Dollar_Homepage>

</comment><comment><USER3> eBay logo ripped off. Copyright violation?

</comment><comment><USER4> Many links are broken, or lead to broken websites.

Brilliant idea it was.</comment>


Ask HN: Ad display services with per-pageview keyword support? - <AUTHOR>

All of the ad display services I've checked out rely on indexing static page content to determine relevant ads.  I've no luck in finding one that allows you to specify dynamic keywords per page-view to the ad server, (via js parameters, reference to a div with dynamic content, or otherwise).  The relevant ad keywords for my site will differ at any given time based on each user's input history.  After a user has shown an interest in robots for example, and who doesn't, I'd expect robot-related ads to appear.<p>What, if any, ad services offer this - or is it a feature too subject to abuse? <comment><USER2> Google AdSense has an API that'll let you pass keyword 'suggestions' to it. It's not available to the general public, though.

There was some discussion on this quite a while ago:

<http://news.ycombinator.com/item?id=928904></comment>


HN MEETUP: Buenos Aires - <AUTHOR>

Who's in for a HN meetup this long weekend? <comment><AUTHOR> Monday night? Maybe tuesday? Pub? Starbucks? Pizzería?

</comment><comment><USER2> I would, but when/where?

</comment><comment><USER3> im willing to travel from uruguay for the next one!

</comment><comment><USER4> i'm in but this post is 7 days old!</comment>


Ask HN: Looking for a stack-based VM that can run a simple instruction set - crypto-jeronimo As a teaching assistant, I'm looking for a suitable stack-based VM that can run a relatively simple instruction set (I haven't got a particular instruction set in mind yet, but I've been considering RISC).<p>The purpose is demonstration of how programs can be created solely from opcodes (and then run into a stack-based VM). <comment><AUTHOR> ? Maybe Knuth's MMIX, [http://mmix.cs.hm.edu/](http://mmix.cs.hm.edu/) ?</comment>


EA To Use Controversial Internet-Required DRM On New Games (Phones Home Every 10 days) - <AUTHOR> http://techdirt.com/articles/20080507/1353061058.shtml <comment><USER2> Time to play devil's advocate: can you blame them? On paper, Crysis was a near flop, but when it comes to actual installs it's close to the game of the year!

Crysis has been on Pirates Bay since last November and still has over 600 seeders. For most of Dec and Jan it was the top game! (<http://thepiratebay.org/tor/3883491/Crysis-Razor1911>) The stats were impressive enough to drive Crytek towards console development.

PC gaming is a tricky business. The counter-argument going around today is that MMO's are a billion+ business. Granted, but they phone home every time you sign on.

<comment><USER3> I wonder how many of the downloaders were simply kicking the tires to see how well it would run on their paltry 2007 vintage hardware.

Seriously though, to play god's advocate: check out this article from the CEO of Stardock games: [http://arstechnica.com/news.ars/post/20080320-pc-game- develo...](http://arstechnica.com/news.ars/post/20080320-pc-game-developer- has-radical-message-ignore-the-pirates.html) (Ignore the Pirates)

Back to devil's advocate: Stardock has a good reputation among gamers for being a scrappy independent publisher, so they get some respect from would-be pirates. I don't know that a faceless megacorp like EA could play the same hand.

<comment><USER2> This just in: EA dropping dial-a-DRM.

[http://www.crunchgear.com/2008/05/09/update-mass-effect- for-...](http://www.crunchgear.com/2008/05/09/update-mass-effect-for-pc-drops- dial-a-drm/)

</comment></comment></comment><comment><USER4> DRM and other crap is already common in gaming.

For instance, Valve's Steam service is quite successful (it has major titles like Team Fortress 2, the Half-Life franchise, Call of Duty 4, etc.) and won't let you run any games without phoning home to it (and running a packet sniffer shows that it's sending some kind of packets home once every 15-45 seconds). You can't even play single-player gamers without it connecting over the Internet.

Also, the Need for Speed games have advertisements in them, when you've already bought the game. Like, you crash into an SUV and you see a big car insurance company logo on the side, and every time you get a call on your phone from one of the NPCs, you see a Verizon logo. If that isn't enough ammo to help people rationalize copyright infringement I don't know what is.

<comment><USER5> DRM is common, and it never works. Valve's single player games are as easy to pirate as anything else. Has there ever been a single player game where DRM succeeded?

<comment><USER6> The game companies know that DRM doesn't work in the long term. But they believe it can work in the short term. Many games make the bulk of their money in a few weeks or months. To be effective, DRM only needs to keep the hackers busy for this period -- or so says the advertising of the DRM creators.

After this period, however, the DRM serves no purpose other than to frustrate legitimate buyers. Ideally, the game creators would disable the DRM after it has served its purpose, thereby eliminating problems for their customers as well as freeing up server resources and support call costs. Unfortunately, there are few companies willing to do this.

<comment><USER7> Given this theory, a recent example makes even less sense: I bought Company of Heroes shortly after it was released, and it had no copy protection other than a serial key for playing online.

The expansion pack added a phone-home "feature" or alternatively DVD checks with a message box you had to click away every time you start a game or return to the menu. (if you don't have an internet connection or block its attempts to connect)

A recent patch has made this even more annoying by alternating which disc it wants and under certain circumstances appears to completely stop working if it can't phone home. Great when their servers go down.

Ugh. I'm sorry, that kind of user experience just doesn't cut it.</comment></comment></comment></comment>


Nvidia-Docker – Build and Run Docker Containers Leveraging Nvidia  GPUs - <AUTHOR> https://github.com/NVIDIA/nvidia-docker <comment><USER2> If you're using DC/OS you can also run docker containers that leverage GPUs. We worked with Nvidia to mimic the same functionality provided by nvidia- docker. Here's a talk I gave at this years Nvidia GTC conference explaining how it works:

[https://drive.google.com/file/d/0B7vZqCY- AJrpMEYyVmZkVGlyOEE...](https://drive.google.com/file/d/0B7vZqCY- AJrpMEYyVmZkVGlyOEE/view)

[https://docs.google.com/presentation/d/1q6brajoQkFZVtSocMPGg...](https://docs.google.com/presentation/d/1q6brajoQkFZVtSocMPGgbmqTLAcrZetcMrdve- WD6x4)

</comment><comment><USER3> We use this in production every day. We've hit a couple bugs, but it's a surprisingly stable piece of software.

We hit an issue with user namespaces, and it not correctly chowning things when "exporting" them into Docker containers. I honestly forget how we solved this, but I believe it was just an upgrade.

We hit an issue with the first run of a Docker container on a system being extremely slow, to the point where downstream systems would give up, and retry. The issue was fixed by starting a container that leverages the driver at boot time, "warming" it up.

<comment><USER4> Is it possible that the slowness is caused by disk speed of loading a large file from disk?

I've observed the same thing but it seemed to be IO related, not CPU or GPU related.

<comment><USER5> It's mainly the speed of creating a huge number of small files on disk. When unpacking a docker image into an AUFS file system, it has to create every file in the shadow system. A robust Ubuntu install has around 100000 files. On AWS with default EBS storage, this can take a few minutes. At OpenAI we pre-built AMI instances with file systems pre-unpacked.

</comment></comment></comment><comment><USER6> As and example, we used (nvidia-)docker images to make our object detection results reproducible:

[https://github.com/umautobots/driving-in-the- matrix](https://github.com/umautobots/driving-in-the-matrix)

docker has been great for this in the lab: only one person now goes through the pain to get latest framework + hack + model tweak work and then the rest can reuse.

</comment><comment><USER7> Isn't AMD leaving a lot of potential revenue on the table without a comparable amdgpu-docker?

If I'm building an ML cluster, I'm going to go with the vendor that's easiest to containerize and deploy, and right now it looks like nvidia has a commanding advantage in software.

Why doesn't AMD throw a few hundred thousand dollars at some developers to get containerization parity?

</comment><comment><USER8> Just for information, it's also possible to use NVIDIA GPUs inside Docker containers without using `nvidia-docker`:

[https://stackoverflow.com/questions/25185405/using-gpu- from-...](https://stackoverflow.com/questions/25185405/using-gpu-from-a- docker-container)

In a nutshell, you can give the container access to the NVIDIA device file via the `--device` flag, so all you need is a container with the NVIDIA drivers. The added benefit of this is that you can use different versions of the drivers side-by-side (in my understanding).

I thought this might be relevant as some people might not want to use the `docker-nvidia` CLI to run containers (I'm not sure how you would use this via the Docker API for example).

<comment><USER9> We document how this on our wiki: [https://github.com/NVIDIA/nvidia- docker/wiki/Internals](https://github.com/NVIDIA/nvidia-docker/wiki/Internals)

> The added benefit of this is that you can use different versions of the > drivers side-by-side (in my understanding).

No, you can only have one driver version, the one that correspond to the loaded kernel modules. Installing the driver inside a Docker image makes it non-portable.

<comment><USER8> Ah thanks for the clarification, I was not aware of this!

</comment></comment></comment><comment><USER10> I use NVidia-Docker extensively in my Open Source project Deep Video Analytics [1] when combined with TensorFlow (which allows explicit GPU memory allocation) its unbeatable in running multiple inference models on a single GPU in a reliable manner. Combining this setup with docker volumes on AWS EFS allows simple multi machine deployments.

[1] [https://github.com/AKSHAYUBHAT/DeepVideoAnalytics](https://github.com/AKSHAYUBHAT/DeepVideoAnalytics)

<comment><USER11> this is pretty cool! why do you use multiple packages like torch and tensorflow ?

<comment><USER10> Certain algorithms/models are implemented in PyTorch or Caffe and typically it's huge amount of work to convert them to TensorFlow while ensuring correctness / Parity. Also I personally like design of PyTorch.

<comment><USER11> coming from the facebook/reactjs weaponized patent grant problem.. caffe also has the same revocable patent grant.

Tensorflow is apache licensed. I think in general, the perception is that it is far safer to stay away from caffe.

<comment><USER10> Caffe 1 is developed by Berkeley and I think Apache or BSD licensed. The Patents.txt issue occurs with Caffe 2 which is developed by Facebook.

</comment></comment></comment></comment></comment><comment><USER12> I wish they would add support for NVIDIA-docker to run on Windows but I think that is a tall order.

</comment><comment><USER13> One of our engineers recently shared an intro-level talk at the Docker meetup about a ~year of (happy) experiences with this: [https://www.meetup.com/Docker-Santa- Clara/events/240641246/](https://www.meetup.com/Docker-Santa- Clara/events/240641246/) . It should be recorded somewhere, and may be helpful if you're considering production use, not just personal DL stuff.

</comment><comment><USER4> A collection of deep learning nvidia-docker images to get you started: [https://hub.docker.com/r/deepaiorg/](https://hub.docker.com/r/deepaiorg/)

Floydhub also curates most frameworks as nvidia-docker images: [https://hub.docker.com/r/floydhub/](https://hub.docker.com/r/floydhub/)

</comment><comment><USER14> Is there a processing-specific user case for this - are we going to see mining containers or game client containers?

<comment><USER15> Would this be useful for people who wanted to leverage GPUs for deep learning, but didn't have the wherewithal or the willingness to set up all the dependencies on the host machine?

<comment><USER16> It is used by this kind of popular pre-built Docker image for Deep Learning: [https://github.com/floydhub/dl-docker](https://github.com/floydhub/dl-docker)

They actually created this service using that (a Deep Learning "as a service"): [https://www.floydhub.com/](https://www.floydhub.com/)

<comment><USER17> At FloydHub, we use nvidia-docker in production for running DL jobs. It has been very solid for the past 6 months or so. We have also built a collection of open source DL docker images for various frameworks and we actively maintain them.

[1]: [https://hub.docker.com/r/floydhub/](https://hub.docker.com/r/floydhub/) [2]: [https://github.com/floydhub/dockerfiles](https://github.com/floydhub/dockerfiles)

</comment></comment></comment></comment><comment><USER18> Can I run regular web apps with this on NVIDIA gpu's?

<comment><USER19> No.

<comment><USER20> I mean, technically I guess you could run it, it just wouldn't make use of the GPU.</comment></comment></comment>


Why Index Funds Are Like Subprime CDOs - <AUTHOR> https://www.bloomberg.com/news/articles/2019-09-04/michael-burry-explains-why-index-funds-are-like-subprime-cdos <comment><USER2> Not knowledgeable on these matters, so my money is in index funds. Obviously a lot of other people are in the same category as myself. The article seems to be saying we'd all be better financial citizens if we put our money into actively managed funds, or did our own investing. The latter is out of reach for most people, and with respect to the former it's somewhat puzzling that managed funds can't consistently outperform index funds ([https://www.cnbc.com/2019/03/15/active-fund-managers- trail-t...](https://www.cnbc.com/2019/03/15/active-fund-managers-trail-the- sp-500-for-the-ninth-year-in-a-row-in-triumph-for-indexing.html)), and so the managers of those funds in a strict sense don't earn their fees. So what is the average person with a couple bucks to invest supposed to take from this? The market is in peril because not enough money is flowing to people who do a poor job of managing it?

<comment><USER3> I will try to interpret, but obviously it is just my interpretation (and personally I mostly agree with many theses Burry gave). First, he does not really talk about being a "good citizen" or not. His points are for "greedy citizens" who, in his view, should be worried (about his pocketbook) if he is heavily invested in passive index funds.

This is due to his "bigger and bigger crowds, same exits" analogy: individuals easily move through doors at will; but if a crowd rushes out through the same door, injuries happen.

His premise is that many stocks that index funds invest in have low liquidity (small door): half of stocks in SP500 trades less than $150M a day. This is tiny (he quotes total market cap of indices of $150 trillion). What happens if there is a small, but synchronized outflow for any reason? If customers ask for 1% of index funds to be sold, index funds _have_ to sell 1% of their holdings in the exact ratios defined by the index, including stocks with low trading volumes. Which is a problem, as there may be no one to sell them to, so prices of those stocks may crash and create a big panic causing additional sales of index funds bringing down bigger chunks of the market.

That is the gist of it I think.

<comment><USER4> That doesn't answer markbnj's question. You elaborate why the passive market is in peril (because in the event of a sell-off, the ETFs will be forced to sell a bunch of low-volume stocks, crashing them), but that's just explaining in detail that the market is in peril because not enough money is flowing to people who do a poor job of managing it.

But, granting that Burry is right and you're interpreting him correctly, what is the average person with a couple bucks to invest supposed to do instead of passive investments?

Surely we can't recommend actively managed funds, funds that don't even earn back their fees. And, if not passive investing, and not actively managed funds, then…what, exactly?

<comment><USER5> Dollar cost average purchases of index funds, and slowly draw down your shares in retirement. Maybe rebalance every year or so as you get older. In other words, don't panic or try to time the market. Those are purely speculative and usually pro-cyclic movements that just introduce noise into price discovery. After all, when there's a market crash, did millions of machines in factories fall apart, or millions of workers in offices forget how to do their jobs? It's just a psychological overreaction.

As to institutionalizing this stability, it would be nice if index funds offered fund choices that prohibited selling or trading for one, two, three decades. Since you as the investor would be adding information to the market ("I'm not an index fund band-wagoner, I understand buy-and-hold and I will practice what I preach") you would be rewarded with better returns in exchange for signaling your intentions and acting as a cushion when everyone else is panicking.

<comment><USER6> > After all, when there's a market crash, did millions of machines in > factories fall apart...

In 2008, the crash happened because suddenly Wyle E. Coyote realized there was gravity when he ran off the cliff. Mortgages were actually defaulting on a very high rate, but people put blindfolds on and didn't want to see. It wasn't just a "psychological overreaction" but real fear and panic as those same investors were trying to squeeze through the same exit door as everyone else.

There is still some reasonable fear in 2019 that large financial institutions will choose to make money at the expense of the economy.

<comment><USER7> If you were invested in the broader market, and didn't move your whole portfolio in our out of cash in 1 year,the 2008 worldwide economic collapse was barely a blip in long term performance.

<comment><USER6> So you're point is exactly what again? It's okay for banks to manipulate the markets because in the end it all averages out?

</comment></comment></comment></comment></comment></comment></comment><comment><USER8> The discussion of this on the Bogleheads forums, a community dedicated to low- cost investing primarily via indexing, provides an interesting counter-point to Burry's opinions: [https://www.bogleheads.org/forum/viewtopic.php?f=10&t=289284](https://www.bogleheads.org/forum/viewtopic.php?f=10&t=289284)

<comment><USER9> > a community dedicated to low-cost investing primarily via indexing

Right or wrong, that must be one boring place.

[Re: downvotes, The post was just intended to convey that the thesis of "put your money in the lowest cost index funds using an allocation formulatically dictated by modern portfolio theory, and don't touch it for the next 35 years" would be unlikely to provide much fresh content.]

<comment><USER10> A community consisting of people patting each other on the back for being so much more clever than everyone else is rarely boring to the participants.

The fact that this explains a majority of self-selecting communities is purely coincidental, of course.

<comment><USER11> Including Hacker News, no doubt.

<comment><USER10> NO SHIT.

</comment></comment></comment></comment></comment><comment><USER12> So there are two concerns here. One concern is a problem with a certain asset being inflated, in this case S&P 500 stocks, and the money you might lose if you hold those assets and their value goes down to normal. A second concern is the collateral effects of a bubble bursting: the inflated assets are tied into many other assets/instruments, and untangling the mess caused by a rapid bubble burst may cause a financial crisis. The panic of 2007 (or at least, the liquidity freeze part of it) was not _directly_ caused by devalued assets, but rather the fact that banks relied on those assets having a certain value to do basic, short-term lending, and their confidence in that value was blown away.

The second concern is not really a concern for long-term investors. Really, neither is the first. Maybe equity is inflated, but where else are we going to put our money?

I think that this article is mostly about risk. If you are not too concerned with risk in your investments (which you should not be if you are more than 10 years before retirement, probably), I think this article doesn't say much about what you should do with your money.

<comment><USER13> A hedge from this theory would be to buy stocks just outside the SP 500? Something like TSLA. That would be a crazy situation, where the SP 500 is crashing and the rest of the market it taking off

<comment><USER14> A simpler option is to buy options on the index. You can butterfly the index with calls and puts around your minimum return / maximum loss tolerance.

<comment><USER15> Which requires a margin trading account, a non-trivial amount of trading experience, a non-trivial amount of capital, constant management, and is highly leveraged. The risk profile is totally different.

</comment></comment></comment></comment><comment><USER16> Isn't a big part of the issue with actively managed funds the fees, which usually wipe out any gains above index funds. Wouldn't the market correction be to close the delta in fees between active and passively managed funds to encourage more people to go the active route?

A lot of the grousing about passively managed funds come from people who are running actively managed funds that charge huge fees to under perform passive management. By lowering fees, actively managed funds should be able to do a better net and to be able to attract more investors.

Any sort of government solution to index funds getting large would basically be protection for these actively managed funds. There are actively managed funds that can beat passive funds, but it's incredibly difficult to do so when you charge a 2% fee.

<comment><USER17> You can't run most active management strategies on anything approaching the average passive fee structure. Additionally, you run into problems with scale. An S&P 500 tracking fund scales extremely well and could add several billion of AUM without having to incur additional expenses. A long only equity fund would probably not be able to do the same without hiring more people, building more infrastructure, etc.

<comment><USER16> I get that the fees can't be comparable, but without passive management, active management fees are unchecked, and they rose a lot over time.

I'm willing to agree that it should cost an order of magnitude more for an actively managed fee, but most are beyond that.

A lot of this seems like plain greed to me, combined with grift and graft. A lot of workplace plans try to funnel people into actively managed funds that often charge really high fees.

<comment><USER17> I'm not sure how fees are unchecked. Active management fees have fallen quite a bit over the past 5+ years. A lot of mediocre managers have gone out of business and many more probably will as well. Additionally, new fund launches are near all-time lows.

</comment></comment></comment></comment><comment><USER18> Not an economist, but it's obvious to anyone used to thinking in terms of systems that index funds can't work after a certain amount of the money poured into the system is managed by index funds.

What's the limit - 30% 40%, 50%, 60%? What's the current level in terms of managed capital? (Edit: [https://www.cnbc.com/2019/03/19/passive-investing- now-contro...](https://www.cnbc.com/2019/03/19/passive-investing-now-controls- nearly-half-the-us-stock-market.html) says 45% for US stock-based funds, half a year ago, so maybe like 48% now)

I wonder if the endgame is that index funds won't be allowed to trade on the the stock exchanges? I can't imagine how that would be enforced.

"Mr/Mrs/Ms Fund manager, you've been trading too close to the index, we'll be forced to terminate your access to the markets"?

<comment><USER19> You only need the marginal investor to be informed, so it's not clear that you couldn't have a much higher percentage of passive investment (say 90%) and only a small amount of active investors who are providing price discovery.

The bigger problem is that most passive investments are not really passive - for example, choosing to invest in a "passive" S&P 500 ETF over a "passive" Russell 2000 ETF is an "active" investment choice (preferring large cap over small cap) so valuation errors and bubbles could develop in segments of the market, even if constituents with an index are all fairly valued relative to one another. These valuation errors could sustain for a long period of time, because it takes much more money to correct a valuation error in a huge market segment than it takes to correct a valuation error in an individual stock.

<comment><USER20> This lists 3575 stocks among its holdings, which includes both large and small cap stocks:

[https://investor.vanguard.com/mutual- funds/profile/overview/...](https://investor.vanguard.com/mutual- funds/profile/overview/VTSAX/portfolio-holdings)

<comment><USER19> Sure, which is why I said that _most_ passive investments are not really passive. Vanguard Total Stock Market is pretty passive, as long as you consider your investment universe to be "US stocks".

But even in this case the fund only holds stocks (no bonds or real estate) and only US stocks at that (no international or emerging market exposure).

</comment></comment></comment></comment><comment><USER21> Can someone who understands investing well explain what he's saying in terms that someone who isn't knowledgeable about this could understand? I kind of think he's saying that everyone is just shoveling their money into index funds without thinking about it and this leads to incorrectly valued stock that will correct in the form of a crash at some point. Is that sort of the gist of it?

<comment><USER22> I think the contrast is between active and passive funds.

If your money is in an active fund, there's a manager exerting his intelligence in trying to make good choices with your money. This effort is beneficial, as it helps the market find the right prices for assets.

A passive fund adds money into the system, but it doesn't add any intelligence - it relies on the intelligence of the current market participants.

As more and more money switches from active to passive, we have more and more money relying on less and less intelligence. This means that the market is becoming less and less efficient, and prices are deviating more and more from where they should be.

Passive investors are essentially leeching returns off the work of the active investors.

This article suggests that the effect will be ultimately catastrophic, where I suspect that it'll just result in money slowly swinging back the other way as active funds take advantage of the situation to start to make more money than before. That's pretty much what the article says he's doing.

<comment><USER20> > This article suggests that the effect will be ultimately catastrophic, where > I suspect that it'll just result in money slowly swinging back the other way > as active funds start to make more money than before.

This makes sense to me - I would see returns to active investors increasing gradually, as there are fewer of them. At which point, more people take their passive investments and give them to the active investors. At some point you maybe reach some sort of equilibrium.

Why would it not be a well-functioning feedback loop like this?

> If your money is in an active fund, there's a manager exerting his > intelligence in trying to make good choices with your money. This effort is > beneficial, as it helps the market find the right prices for assets.

Also, worth noting that it's _beneficial for the market_ , not necessarily (and probably not likely) for the individual investor, who will pay higher fees and may underperform the market.

<comment><USER22> > Also, worth noting that it's beneficial for the market, not necessarily (and > probably not likely) for the individual investor, who will pay higher fees > and may underperform the market.

Excellent point. Indeed, I believe the academic view is that due to decreasing returns to scale, funds flow in and out of active funds, with an equilibrium only when any alpha (performance above the norm) is entirely swallowed by fees.

</comment></comment></comment></comment><comment><USER23> He says he's (reluctantly) doing active stock picking. He's a professional investor; I'm just some software engineer with a nest egg, which is 100% in index funds today. What should I be doing, as a schmoe who wants to save money?

<comment><USER24> The thing is even if Burry is right (and that's a big if), it doesn't mean that you as an individual investor with a long time-horizon should do anything different.

Burry's argument is that many of the underlying stocks inside the index have a lot less liquidity than the index funds and securities themselves. E.g. if a lot of capital quickly exits the index funds, then some of the single-name stocks may be overwhelmed by the liquidity. That would result in their prices becoming severely dislocated relative to their true value.

But if you're just buying-and-holding that doesn't matter. If the stocks in your portfolio become temporarily dislocated, who cares? Dislocations by definition correct themselves over time. If some stock falls 50% because of panic selling, without anything having to do with the underlying company, it will eventually return to the correct price. And much sooner than the decades long timeline that you're saving for.

That doesn't mean that Burry's thesis is irrelevant to everyone. In particular if you're an institution that offers liquidity to your clients it may be very relevant. Or if you're a bank, hedge fund, or insurance company that's subject to mark-to-market capital ratios or margin calls.

If stocks become very dislocated, your investors may panic and redeem their money. Or your regulator may say you have insufficient capital and have to liquidate. That's very bad, because you'll be forced to sell at fire-sale prices. However, that's not relevant to individual investors, because nobody can force you to sell out just because your portfolio goes down.

<comment><USER25> > If some stock falls 50% because of panic selling, without anything having to > do with the underlying company, it will eventually return to the correct > price. And much sooner than the decades long timeline that you're saving > for.

But that's not true, because suppose if 99.9% of investors are buying ETFs and only 0.1% are actively managing, there won't be enough funds to bring all these panic dislocated stocks back up for many, many years.

<comment><USER26> > But that's not true, because suppose if 99.9% of investors are buying ETFs > and only 0.1% are actively managing, there won't be enough funds to bring > all these panic dislocated stocks back up for many, many years.

The price change of a stock doesn't always depend on how often a stock is bought. For example, when earnings hit, a stock can easily move 10%. That's not because there was a certain amount of people buying at every price between what it was and +10%. This can happen because earnings are better, and many people base price of an earnings multiple. When new knowledge is put into the system, there's a new price.

If everyone who is trading a stock agrees on a price, that is the price. If people don't agree, it is generally the highest price someone is willing to sell it for (and find a buyer), or the lowest someone is willing to buy it for (and find a seller). If that disconnects a lot, you get a high bid/ask spread, and possibly no shares trade (lack of liquidity). It might only take a few shares or be a very short time to move a stock a lot.

</comment></comment></comment></comment><comment><USER27> Burry is making a terrible case, and he's fundamentally wrong on basically all counts.

> And now passive investing has removed price discovery from the equity > markets. The simple theses and the models that get people into sectors, > factors, indexes, or ETFs and mutual funds mimicking those strategies -- > these do not require the security-level analysis that is required for true > price discovery.

Passive investing is, for the most part, not funging against dollars that would have gone to high quality asset managers. It is removing noise in the form of retail speculation from the market. Asset managers that consistently beat the market (i.e. facilitate price discovery) have no problem raising capital.

> "In the Russell 2000 Index, for instance, the vast majority of stocks are > lower volume, lower value-traded stocks. Today I counted 1,049 stocks that > traded less than $5 million in value during the day. That is over half, and > almost half of those -- 456 stocks -- traded less than $1 million during the > day. Yet through indexation and passive investing, hundreds of billions are > linked to stocks like this. The S&P 500 is no different -- the index > contains the world's largest stocks, but still, 266 stocks -- over half -- > traded under $150 million today. That sounds like a lot, but trillions of > dollars in assets globally are indexed to these stocks. The theater keeps > getting more crowded, but the exit door is the same as it always was. All > this gets worse as you get into even less liquid equity and bond markets > globally."

Trading volume != liquidity. They are related, but only indirectly. Liquidity is, for the most part, provided by market makers. Market makers are entities willing to take both sides of orderbook at all (or almost all) times. Most of the time, when you trade a stock, your counter-party is a market maker. Even if nobody is trading, that market maker is still providing liquidity. The liquidity is there, even if no shares are changing hands.

Where this gets tricky is that market makers make their money by trading. If there is less volume, they may be willing to provide less liquidity. But it's not at all clear that this is a real problem yet, or that there is any major crisis of liquidity in the markets. The correct way to measure this is not to look at daily volume, but at slippage. How much does the market move when you attempt to buy a large block? I'm not certain, but I don't think this is a major problem for people right now.

</comment><comment><USER28> Index funds definitely have a free rider problem.

Warren Buffett lucidly pointed out that the average performance of active investors will be....the market average. You cannot, by definition, have a majority of investors beating the market.

And once you add in fees, index funds produce above average performance, as they have low fees.

So far so good. But, the index funds are free riding on the decisions taken by active investors. Active investors do a useful service to the world by moving capital away from inefficient companies and towards efficient companies.

If the market gets worse at this capital allocation, we can expect overall lower returns.

In other words, there's average market performance but also the factor of efficiency in capital allocation.

This is related to but separate from what Burry talked about, I think. His central point seemed to be that valuations were based on very thin trading, and that when money is taken out of index funds, it will be very hard to find sufficient buyers without a large drop in prices. Add in to that complex derivatives etc used in making all the etfs work.

That bit is somewhat beyond me though. Anyone got a good analysis of how that may play out?

<comment><USER29> > You cannot, by definition, have a majority of investors beating the market.

You cannot have a majority of _money_ beating the market. It is mathematically possible for a majority of _investors_ (each relatively small) beat the overall market (albeit unlikely).

(I agree with your overall post, but not that line.)

<comment><USER28> Oh true

</comment></comment></comment><comment><USER30> The fervor with which people advocate for ETFs is creepy to me.

Ive noticed so many situations where people from all walks of life who don't seem to have put too much thought into the details of how financial markets work, get deeply offended at the idea that the whole world can't collectively park their money in ETFs and collect an absolutely guaranteed 4-7% until the heat death of the universe as if it was some fundamental law of nature.

It's not just that they disagree, it's that you seem to be attacking some part of their identity by the mere suggestion.

<comment><USER31> I agree...it also has become so commonplace it irks my inner contrarian (having been in ETFs past 20+ years).

-Shoeshine boy starts talking stocks--time to exit the market. [1]

-Dad starts asking me about bitcoin--time to exit bitcoin position.

-Occasionally employed step-sister praising index funds--???

[1] [https://archive.fortune.com/magazines/fortune/fortune_archiv...](https://archive.fortune.com/magazines/fortune/fortune_archive/1996/04/15/211503/index.htm)

</comment></comment><comment><USER32> The only part that I find interesting or possibly worrying:

" _Liquidity Risk_

" _"The dirty secret of passive index funds -- whether open-end, closed-end, or ETF -- is the distribution of daily dollar value traded among the securities within the indexes they mimic._

" _"In the Russell 2000 Index, for instance, the vast majority of stocks are lower volume, lower value-traded stocks. Today I counted 1,049 stocks that traded less than $5 million in value during the day. That is over half, and almost half of those -- 456 stocks -- traded less than $1 million during the day. Yet through indexation and passive investing, hundreds of billions are linked to stocks like this. The S &P 500 is no different -- the index contains the world's largest stocks, but still, 266 stocks -- over half -- traded under $150 million today. That sounds like a lot, but trillions of dollars in assets globally are indexed to these stocks. The theater keeps getting more crowded, but the exit door is the same as it always was. All this gets worse as you get into even less liquid equity and bond markets globally."_"

But other than that the market in index funds dwarfs that in the indexed securities, I haven't the vaguest clue what they (this isn't the first time I have heard this) are worried about.

</comment><comment><USER33> A lot of people seem to have read this and think that Burry is worried that the indices are weighted by market cap. That is not the issue.

The issue is that a large proportion of the index is smaller caps that no one bothers to look at and price properly, and yet massive amounts of money are in ETFs and other contracts that take a position on those smaller, less followed names.

So these small names in the large index have been artificially driven up. Sort of like CDOs. You just look at the rating, or the P/E of the 500 stocks in the SP500, but you don't bother to do a deep dive.

Were someone to do the deep dive, you would see that they are massively overvalued (and therefore so is the SP500, for instance).

<comment><USER34> If the small cap valuations are totally wrong, shouldn't some simple measures like P/E show it clearly?

Edit: The P/E values on Russel 2000 seem to be almost double compared to S&P 500 [1]. Also some point out that the value is not correct as it leaves out negative earnings which are common among small caps [2].

[1] [https://www.wsj.com/market- data/stocks/peyields](https://www.wsj.com/market-data/stocks/peyields) [2] [https://goldco.com/russell-2000s-price-to-earnings-ratio- is-...](https://goldco.com/russell-2000s-price-to-earnings-ratio-is-high/)

<comment><USER33> I think the point is people use the measures that you can clearly see easily (like the P/E), and therefore you don't go down to the level of the stock (oh, temporarily raised earnings, forecast for reduced earnings, and as you point out, negative earnings etc).

Note: this is not my argument, but what I understand Burry to be arguing.

</comment></comment></comment><comment><USER35> When I read these articles, I always begin to question if I am a passive or active investor. I strongly believe in keeping a diverse portfolio, mainly because I am keenly aware of my own ignorance as it relates to understanding complex stock moves and changes.

Warren Buffet encourages novices to invest in index funds, since they outperform individual picks.

Understanding asset value and free cash flow changed my life and my entire investment thesis about 10 years ago. Developing my own version of "Rich Dad, Poor Dad" I now seek to buy or build assets that make a return to me. Some return cash, others good feelings or emotions.

I find that my financial situation is far more stable this way, I am semi- insulated from group-think (markets); and I look at re-applying net proceeds on a regular basis. That is a fun activity, using cash from one investment to build a new investment that will hopefully also return cash and build an asset.

It takes precious little to do this, and the most fun of all has been teaching my daughter how to make money. At 8 she looks at apartments, hot dog stands, and many small businesses as an opportunity to "make cash". We now have interesting conversations in the car about what it would take to start "X" business.

</comment><comment><USER36> I think there are a few good points made by Burry. When comparing across _different_ market segments, today's climate of popular-index-funds can cause bubbles in some segments. For example, everyone and their grandmother invests in the S&P 500, whereas much fewer people are investing in the MSCI EAFE. Because of this, VOO can become over-valued relative to VEA.

I agree with this point and have wondered about it myself. I highly encourage everyone to diversify across _all_ market segments, including the S&P 500, mid-cap, small-cap, developed markets and emerging markets. That mitigates the potential S&P-500 bubble that Burry might be warning against.

But that said, I don't think it's fair to accuse index funds of causing specific stocks to become over-valued relative to other stocks within the same index. By design, market-weighted index funds maintain the relative prices of different stocks within the same index. Ie, if a whole bunch of people sell their houses tomorrow and invest in the S&P 500, all the stocks in the index will get an equal percentage lift, and pricing ratio of GOOG to MMM will still remain consistent.

Note however, that equal-weighted indexes do not have this property. Imagine if the US government decided tomorrow that it was going to invest $10T in the stock market, using equal-weighting. This would translate to ~$20B for every stock in the S&P 500. The biggest stocks like GOOG would see an incremental boost, because $20B is still only ~2% of their market cap. Whereas the smallest stocks in the index would see their share price skyrocket because $20B would more than double their market cap.

</comment><comment><USER37> It wouldn't hurt his reputation throwing such opinions. After bashing down index, he suggested everyone should take a look at some small caps in Japan. That wouldn't hurt either. The point of investing in index is because it saves our time and energy to try to become excellent investors(just maybe). He's selling something, obviously, he's not even trying to lay opinions.

</comment><comment><USER38> What i think he is saying is this:

If you look at s&p 500 stocks weight for instance, at number 483 is Rollins inc, weight 0.019938%. Do you know this company? But everyone here if you have invested in s&p 500 has invested in this stocks. The way s&p 500 works is it picks stocks based on market cap. Now this company has a very low chance of getting kicked out even if it is a dud as people keep investing in it via ETF's

Here lies the opportunity. If you go through every company in s&p 500 you are going to find overvalued and undervalued stocks. One strategy is to pair trade. Take a long/short position. But it is very tough to time as every keeps investing every month. Other strategy is wait for a crash and instead of again investing in these ETF's for small returns pick stocks that got battered for no reason. This has inspired me to actually work a bit, actually looks at balance sheets and pick stocks.

Side note, i only own one etf and it is PTF. It has very little stocks and i think focused funds are a better bet.

</comment><comment><USER39> A useful read that provides a counter view to Mr.Burry's:

From The Economist.

(1) [http://archive.is/2oco0](http://archive.is/2oco0)

and

(2) [https://www.economist.com/finance-and- economics/2018/07/05/t...](https://www.economist.com/finance-and- economics/2018/07/05/the-growth-of-index-investing-has-not-made-markets-less- efficient) (Unable to archive this)

and

(3) [https://www.economist.com/finance-and- economics/2018/02/08/p...](https://www.economist.com/finance-and- economics/2018/02/08/passive-funds-tracking-an-index-lose-out-when-its-make- up-changes) (Critical piece to note here is about rebalancing. To quote "Someone who bought all listed American stocks in 1986 and did nothing would by now own less than half the market.")

</comment><comment><USER40> How can index funds that track the market actually distort the market? In the alternative, wouldn't the same amount of money just be invested in stocks individually? Wouldn't even a small number of active investors jump on distortions and quickly provide more accurate pricing?

</comment><comment><USER41> The reality is that before ETFs, the largest beta funds were already quasi- replicating the index, trying to beat it by just enough to compensate for the high fees. This low value added funds are simply being replaced by something cheaper, not sure it is such a bad thing.

</comment><comment><USER42> Michael Burry made his money on the tech and housing bubble busting. The main difference here is that in both, retail investors got the idea that they could get rich quick and bought into asset bubbles. But index funds aren't an asset bubble--people buy them _instead_ of stocks, then the fund buys the stocks on investors' behalves. In aggregate, capital inflows look mostly the same.

His points about liquidity of small cap stocks and price discovery are interesting, though; it's just fundamentally different from what he's been good at spotting. The trigger also isn't as obvious as home prices declining 50%. The S&P 500 dropped 15% in December 2018, and this wasn't an issue.

</comment><comment><USER43> Nothing in the article or in the linked articles, indicates that he is talking about physically replicated passive index funds that replicate few times a year. He is not giving any explanations that would fit to these normal index funds.

Ignoring small-cap stocks is kind of side show, because massive index funds can't make much return from small-cap stocks anyway. Even if you create index that includes them, they add only a little ROI.

I don't see how index funds can remove price discovery, because they always follow price signals from actively managed funds.

There may be market bubble and too much money caching profits but unless actively managed funds start outperforming index funds, they are not doing anything worth investing.

</comment><comment><USER44> I don't know man. Index funds seem to be the safest bet you can make as far as balancing risk and growth. You're betting that the world in general won't collapse over the long term. And if it does any high growth strategy is probably going to collapse with the general world as well so isn't that much safer.

What is fascinating is that here is an article claiming that one of the safest bets you can take is the same as one of the biggest most corrupt and deplorable scams of the last 50 years. Now that's interesting because we want to take a look at who wrote that, who published it, and wonder what the heck they are up to peddling this view.

</comment><comment><USER45> If true what's the hedge? Pension and investments to cash and bonds? Japanese stocks?

<comment><USER46> All types of investment in every country is subject to financial repression.

You could own gold, but wait ! any gain is taxed as income ( not capital gain ). Carrying it around has stiff penalties.

"You invest in how we say you invest" \- Uncle Sam.

<comment><USER47> Taxes aren't repression.

<comment><USER48> Unequal taxes seems a valid form of repression.

Start with something simple, say taxing people of one race 15% more than another race. That would seem a valid form of repression.

Okay, so that rarely happens and is almost always combined with far greater forms of repression. But there are less extreme examples. What about taxing someone more when they have kids, or more when they don't?

Sin taxes also seems a way to repress certain behaviors in society by increasing their cost. Why can't the logic apply in other areas of life where tax rates are unequal?

</comment></comment></comment></comment><comment><USER49> The thing with predictions in the market is, even if you're the guy who figured out subprime before everyone else, your probability of getting it right the second time is completely independent of the last time.

</comment><comment><USER50> There are ways to get more diversity within indexing itself. eg: small cap index, value index funds. It seems like the bone of contention is that indexes track the entire market based on trading volume, and that is an existential risk given cap weighting. Many now invest in total market indices, which limits the impact of large cap companies. The "cap weighting" problem is a known issue in indexing and this is why you invest in total market, small cap, mid cap indices.

<comment><USER51> equal-weight (instead of cap-weighted) funds are also a thing, and perhaps relevant if you want to spread your investment across more of the market:

[https://www.invesco.com/portal/site/us/ria/etfs/strategies/e...](https://www.invesco.com/portal/site/us/ria/etfs/strategies/equal- weight-investing/#tab_tab3)

</comment></comment><comment><USER52> Timely article, I was just thinking about this last night...while browsing Vanguard's site looking for index funds to invest in. Everyone blindly putting their money into similar instruments and getting double digit gains nearly every year just seems like it can end catastrophically. I want to do more research on how these passive funds affect the overall market and vice versa.

<comment><USER53> Aren't most of those double digit gains just from the market rebounding from the 2008 recession?

<comment><USER52> Rebound to inflated values? Reminds me of the housing market in my area now. It's "rebounded" to higher than 2008 levels on the basis of speculation and gentrified neighborhoods being hot. Seems like another bubble. I need to do more research, but I'm curious what the long term viability of these index funds are as more and more people gravitate towards them

<comment><USER53> I was thinking more, rebounded to 2008 levels + inflation?

</comment></comment></comment></comment><comment><USER54> Found this sort of relevant PDF which makes interesting reading - [https://www.esrb.europa.eu/pub/pdf/asc/esrb.asc190617_9_cane...](https://www.esrb.europa.eu/pub/pdf/asc/esrb.asc190617_9_canetfscontributesystemicrisk~983ea11870.en.pdf)

</comment><comment><USER55> There is no such thing as free money. There are no such things as riskless passive investments that beat the reference market rates (which are close to zero these days). Therefore, index funds carry risk. Therefore, somebody (the bulk of index fund investors) will have to absorb these risks. All of this is nearly obvious.

</comment><comment><USER56> Horseman Global Unveils New Shorting Philosophy Using ETF Flows As A Catalyst

[https://www.zerohedge.com/news/2017-04-09/horseman-global- un...](https://www.zerohedge.com/news/2017-04-09/horseman-global-unveils-new- shorting-philosophy-using-etf-flows-catalyst)

</comment><comment><USER57> He seems to use volume traded as a proxy for depth of the market. Is that well supported? I could imagine a stable stock moving no volume because the price didn't move, while everyone is lined up eagerly to make trades an increment out on either side of the current price.

</comment><comment><USER58> I think we aren't close to the margin where indexing is socially harmful. This article elaborates.

[http://www.philosophicaleconomics.com/2016/05/passive/](http://www.philosophicaleconomics.com/2016/05/passive/)

</comment><comment><USER59> This sounds like good logic.

There is one piece of information missing. Did the onset of index funds add more money to the pool? What I mean by that is did people move out of regular stocks into Index funds or did they move out of mutual funds into them? How much is the difference?

</comment><comment><USER60> I have been saying this for years...

Passive investing is great. Especially since the S&P 500 has been up for ~10 or years.

It's when passive investing becomes panic investing (sell everything).

</comment><comment><USER61> > Nobel-approved models of risk that proved to be untrue

Makes you wonder how much more of this ends up remaining unquestioned until it's too late.

</comment><comment><USER62> Is there a fund with low fees that invests according to some reliable accounting metrics of risk and return?

</comment><comment><USER37> And of course, he's reading in a lot of feedbacks of his opinions right now. He wins anyway.

</comment><comment><USER63> Ramit Sethi recommends Index. Smart and not sexy way to do investing without loosing.

</comment><comment><USER64> It's a bit self-serving for a hedge fund manager to criticize index funds.

</comment><comment><USER65> I eagerly await the bursting of this new bubble of hubris and stupidity as capitalism continues its self-cannibalistic path to destruction. Believe me when I say that there's nothing I enjoy more than watching rich people lose all their money.

<comment><USER65> Oh I should probably not post in the wee hours of the morning

</comment></comment><comment><USER66> Accepting that actively managed funds are better than passive index funds is basically acceptance of the classical mentality that there are people who can consistently predict and beat the market and that you can make money by picking the 'right guy'.

I assumed most knowledgeable investors abandoned that philosophy in the 80s/90s

<comment><USER67> (This is my understanding of the artical with some help from other comments. I probably use some words incorrectly but I think you can get the jist)

TLDR: He is't abandoning the current stance that passive > active but rather is discussing the real value of the underlying assets.

And he isn't challenging on that stance either. I don't think the artical is out right advocating people to switch their personal investments from a passive index fund to an active one since he & we both know that passive funds tend to do as well or better than active funds after accounting for fees.

However, the article (at least how I understood it) is saying total effect of everyone moving their money into ETFs and index funds means that the underlying stocks have an increasing risk of becoming or being overvalued since no one is checking the underlying stocks/companies anymore. As someone just tangentially interested in this topic I've thought of this before in a more tangable way: since every college graduate or hacker news type person knows that index funds are the best then at some point 'everyone' or enough of the population has a stake in index funds that it's likely to be overvalued.

The market should/could correct as expected: undervalued companies go unnoticed longer since everyone is passively investing causing actively managed funds to have higher yields (since they can get 'all' of the undervalued companies passive investors miss) and people adjust their holdings accordingly. However, as a few other users stated there a few issues trying to hedge against a buble:

1\. Solvency - The market remains 'irrationally' attatched to passive/index funds which means that index funds continue to beat active funds anyway despite their 'real' value/gains being pure speculation. It's difficult convincing people to let you manage their money when your making 4% and the S&P400 is making 8-11% so remaining solvent is an issue.

2\. Systemic Risk - Large markets & financial products are intertwined so if index funds are overvalued then it effects the economy & financial institutitions and if it crashes/pops then it sends a shock wave throughout all of them. Finding a hedge that isn't effected by a bubble in one financial product (CDOs, index funds, etc) can be tricky.</comment></comment>