Elon Musk, Marc Andreessen and Cathie Wood have spent the past few days on Twitter exchanging ideas about how investing and financial markets work — all in the name of liberating small-fry investors from elite giants that manage and peddle index funds.
Andreessen, a digital innovator who now oversees a venture capital fund, started things off with a critique of managerial bureaucracies and the rise of big institutional investors. He also decried large firms like BlackRock Inc. that advocate investing in companies with robust environmental, social and governance practices by leveraging other people’s money. He also highlighted his fears that BlackRock, Vanguard Group and other dominant firms that specialize in index funds had amassed too much power.
That last idea grabbed Musk’s attention. Tesla Inc.’s founder, who has solicited funds from big institutions so he can buy Twitter Inc., noted that “index/passive funds were too great a percentage of the market.” Vanguard and BlackRock also happen to be two of Twitter’s biggest shareholders. Wood, a celebrated active investor who rang up big gains in Tesla and other growth stocks but is now navigating rougher waters, lined up with Musk.