To value investors the concept of indexing is at best silly and at worst quite hazardous. Warren Buffett has observed that "in any sort of a contest - financial, mental or physical - it's an enormous advantage to have opponents who have been taught that it's useless to even try." I believe that over time value investors will outperform the market and that choosing to match it is both lazy and shortsighted.

Don't short many stocks. Instead they hedge for tail risk with CDS and options. They are happy to incur illiquidity

The way to maximize outcome is to focus on the process.

Why should the immediate opportunity set be the only one considered, when tomorrow's may well be considerably more fertile than today's?

It's incredibly important to note that when you don't allow failure, you get more failure.

I find value investing to be a stimulating, intellectually challenging, ever changing, and financially rewarding discipline

In the financial markets, however, the connection between a marketable security and the underlying business is not as clear-cut. For investors in a marketable security the gain or loss associated with the various outcomes is not totally inherent in the underlying business; it also depends on the price paid, which is established by the marketplace. The view that risk is dependent on both the nature of investments and on their market price is very different from that described by beta.