Matt Levine, Columnist

All the Stocks Are the Same Now

Also insider trading and virtual roadshows.

May 27, 2020 at 4:34 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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There have been times in the last decade or so when correlations have been very high and people have complained about them. The correlations, they argued, represented some sort of postmodern glitch in the stock market: The dominance of index funds had led to the end of stock picking, or algorithms that relied on historical relationships ended up blindly reinforcing those correlations, or something. Something was broken in the pricing and capital-allocation functions of the stock market, so that all the different stocks traded like the same stock.