Over the last few weeks, a few famous investors have released interviews and letters where they share their view of global financial markets for 2022.

Here is a recap at the comments from Peter Lynch, Jeremy Grantham and Seth Klarman. They’re not as popular investors as Warren Buffett, but they’re still three of the greatest investors alive today.

All the letters covered here were published weeks ago, so they won’t include the latest geopolitical developments, but they’re still very relatable regardless of that. Perhaps even more, given that most of these investors were already pessimists before the latest events.

Peter Lynch: active investing is the best

In a recent interview, Peter Lynch said a very interesting but controversial thing. He said that passive investors will probably have low returns over the next decade, and that active investors on the other hand have the potential to do much better: “investing passively in the current market is missing the boat”.

According to him, people are being drawn to passive investments through misleading or incomplete information, like the fact that they can’t really beat the market.

He believes retail investors can do well because of how indexes are put together. In the S&P 500, the top 10 stocks are taking up almost 30% of the overall index, while the rest 490 companies account for the remaining 70%. This means that every valuation metric of the index right now reflects those top 10 companies way more than it does for the remaining 490. The P/E for example is also pumped by those top 10 companies in the index: today the average company in the S&P 500 has a P/E close to 15, while the top stocks look like this: