What I Learned This Week

Why the co-dependence between big tech and passive and algorithmic investing could cause far more pain than most anticipate.

In these pages, we have repeatedly dissected two preeminent threats to the bull run: a regulatory crackdown on tech giants, and the backfiring of passive and algorithmic strategies pegged to low volatility. As Monday’s market action suggested, they are not independent threats. FAANG stocks lost $78.7 billion in market value on Monday as the continued barrage of negative tech headlines spooked investors. Yet, the bleeding was not reserved just to the giants targeted by the political and regulatory backlash. As The Wall Street Journal’s Tuesday recap suggests, investors fleeing tech-heavy indexes likely spread the pain: “As the rout intensified, shares of companies ranging from chip makers t…

Want to read more?

Subscribe Today

Already a subscriber? Login here.