Index Funds Are a 'Naïve' Way to Invest Capital, Latitude CIO Says

The video discusses Michael Burry's view that passive investing is becoming a bubble, leading investors to overlook valuable small to medium-sized companies. The speaker agrees with Burry, questioning the rationality of index funds due to their lack of valuation analysis. While acknowledging that active managers can underperform, the speaker sees opportunities in less popular market areas, such as mid-cap and traditional stocks, as the focus shifts to larger cap and tech stocks.

In what ways does the speaker think active managers can outperform indices?

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What does the speaker suggest is necessary for the valuation gap to close?

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