EP16 - Index Funds
Im a humble fund manager with only a few trillion dollars of asset under management.
I cap-weight every major asset. My fund is a perfect mirror of the global economy.
Because the strategy is so brain dead, our fees are as micro soft as the thing under me.
I dont think they understand.
When you control trillions of dollars, you don't track the market. You are the market.
You become the largest shareholder in every meaningful corporation on earth.
The CEO saying something you don't like?
You don't need to argue. You don't even need him to show up to your Zoom call talking about his PIP.
Just install a new one at the next annual shareholder meeting. Call it "ensuring proper governance."
Sometimes, CEOs make bad business decision listening to my suggestion.
I dont think people understand.
I literally don't need to care about profits or returns. Its not even my money.
The real genius isn't in the returns. It's in the access.
My friends need to get paid. So I set up a consulting firm in "compliance" and "professional requirements" we invented.
Every CEO gets a call. They are strongly advised to hire this firm.
They know it's a shakedown. But they also know who signs off on their $10M bonus.
Some call it a tax that I levy on the entire economy.
It's called professional service, and I also charge taxes on that.
Everyone thinks Im managing a utility company.
Im literally a government with a ticker symbol.
Follow me for more financial advice.
Context
Is it strange that the CEO of Blackrock is also a chair in WEF?
If you have a pension. If you invested in index funds. You are part of the system.
Where else would you invest? How else can you protect your wealth from the endless inflation?
Index beats 80% of the active investors over 10 year. You free ride other people's price discovery while paying lower taxes on that.
You would think the index returns is too good to be true. Someone ought to be doing something about it and yet they don't.
Turns out, your real tax is giving up voting rights to index funds so they get to make every CEO fake and gay.