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Jason Zweig & Ken Myers Discuss Indexing
Taylor Larimore 07-09-2001, 9:32 PM | Post #43654 | 
Hi Diehards:
Jason Zweig of "Money" magazine sent me a dialog he had with Diehard Ken Myers which began at Diehard II. Here are some excerpts of this amazing discussion:

Ken: "In a sense, sitting opposite from you at dinner was yet another lesson for me in the virtues of indexing. -- The point is that while I believe I have studied investing reasonably diligently for some time, I found I was talking with a man who played the game with his own 'cue' and that man later talked about the virtues of indexing at a low cost while at the same time pointing to the questionable goings on with the S&P 500 committee.

Because I first trained in engineering and physics there is a part of me that thinks the 'equation' to investing can be found. -- But the longer I studied investing and the longer I studied its history the more certain I came to the conclusion that if the guys who played with their own 'cues' and played the game full-time every day for big money, couldn't consistently beat the market, how could I?

This led me to the conclusion that -- the thing to do was to just buy the entire market as Mr. Bogle suggests using a low-cost, tax-efficient index fund."

Jason: "As I traipse around the country speaking to investing groups, or just stay in my cage writing my articles, I'm often accused of 'disempowering' people because I refuse to give any credence to anyone's hope of beating the market.

The knowledge that I don't need to know anything is an incredibly profound form of knowledge. Personally, I think it's the ultimate form of empowerment. You can't tune out the massive industry of investment prediction unless you want to: otherwise, you'll never have the fortitude to stop listening. But if you can plug your ears to every attempt (by anyone) to predict what the markets will do, you will outperform nearly every other investor alive over the long run. Only the mantra of 'I don't know, and I don't care' will get you there."

Thank you Ken and Jason for allowing us to share your insightful dialogue. Best wishes.

Originally posted in thread: 12480
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