In Einhorn’s estimation, markets are “broken,” repeating a claim he has repeatedly made this year.
“I view the markets as fundamentally broken,” Einhorn said back in February on Barry Ritholtz’s Masters in Business podcast. “Passive investors have no opinion about value. They’re going to assume everybody else has done the work.”
Einhorn puts much of the blame on passive investing in index funds like the S&P 500, noting that because the S&P has had a pronounced growth tilt in the past decade as technology has dominated, investors buying index funds are by default propping up growth stocks at the expense of value stocks.
