The Paradox of Skill: Why AI Makes Active Investing Harder, Not Easier (Larry Swedroe)

In this second round with Larry Swedroe, we explore what evidence‑based investing really means in today’s late‑2025, AI‑driven markets. Larry explains why rising skill and technology shrink alpha, turning most active management into a loser’s game and pushing investors toward low‑cost factor strategies rather than stock‑picking “genius”. He discusses value, momentum, private credit and goodwill traps, shows why passive flows have not made it easier for active managers to win, and warns about high‑fee structures in the asset‑management industry. Larry also touches on quantum computing as a tail risk for financial systems and crypto, and argues that investors should stop chasing elusive alpha and instead build disciplined, diversified portfolios of proven factors and low‑correlation alternatives.Why alpha is shrinking in an AI‑driven, highly skilled market and why active management has become a loser’s game.​What investors can really learn from Warren Buffett and the value factor, especially in an intangible‑heavy economy.​Why passive flows haven’t made it easier for active managers to win, despite common claims to the contrary.​How combining value and momentum, and avoiding goodwill and private‑credit traps, can build more resilient portfolios.​How quantum computing could threaten financial systems and cryptocurrencies, reinforcing Larry’s skepticism toward crypto.​Why investors should shift from chasing alpha to building diversified exposure to proven factors and low‑correlation alternatives.​powered by ETFatlas.com