The main points are:
1. The Baby Boomer generation are aging and in retirement. They own the vast majority of wealth. They don’t have and can’t have long-term time horizons.
2. Historically elevated S&P500 valuations at 22 P/E which means forward 10-year returns are negative.
3. Market cap to GDP of 252%. 2000 was 170%; 1929 was 65%
4. Buffett has 300B cash for a reason
5. Excess leverage in the system. institutional portfolios went from 7% in PE in 2008 to 16% now. real estate has gone higher and portfolios are more illiquid than ever
6. Bond market living on the fringes with our current debt, interest rates and deficit situation.
Active management probably comes back in a big way the moment there is massive destruction in stocks for a decade
Thats why Livermore in like 1940 has that quote “far more money has been lost riding investments than cutting losses in trading”.
It makes sense when you frame it in the context back then - 1929 destroyed stocks and stocks went no where for 2 decades and the Great Depression happened.