I'm reminded Warren Buffett's maxim to never invest in something that you don't understand. It's why he avoids Silicon Valley-like tech companies, because their valuations never made any sense to him, despite everyone else throwing money at them like mad men.

One of the arguments made in the article is that "value investors" such as Buffett are having a much harder time making money at the moment because the Fed is basically acting like an insurance company to protect the companies that aren't valuable. This, in turn, drags down the value of the ones that actually make money:

"Where do the Fed’s policies most prominently insure against financial risk? In low quality stocks, of course. It’s precisely the companies with weak balance sheets and bumbling management teams and sketchy non-GAAP earnings that are more likely to be bailed out by the tsunami of liquidity and the most accommodating monetary policy of this or any other lifetime, because companies with fortress balance sheets and competent management teams and sterling earnings don’t need bailing out under any circumstances. It’s not just that a quality bias fails to be rewarded in a policy-driven market, it’s that a bias against quality does particularly well! The result is that any long-term expected return from quality stocks is muted at best and close to zero in the current policy regime. There is no “margin of safety” in quality-driven stock-picking today, so that it only takes one idiosyncratic stock-picking mistake to wipe out a year’s worth of otherwise solid research and returns."

Continuing:

It sounds like there's still a hungry giant pool of money with an army of twitchy investment managers looking for something to invest in. But there just aren't as many good investments as there are investment dollars. I sense from this guy that their will be ugly downstream ramifications of all this stupid money being thrown around.

https://fortunedotcom.files.wordpress.com/2015/02/buybacks1.gif

Which I, for one, am not looking forward to trying to wade through. Is there anything that a young person with next-to-zero capital can do to get through this?

Have a steady job, a rainy-day fund and as low a burn rate as you can manage.

Because it sounds like he's shitting on S&P 500 indices, which I thought was the one sure-fire thing I could do.

What he's saying is that the money you'd get from ETFs isn't what it used to be, and probably won't ever be again, and everything else is worse. That's pretty much the big point he's been hammering on lately: passive income is becoming much harder to come by no matter what form of investing you want to try on. I know this: I follow a lot of blue chips and they rarely move. Most of them are sort of floundering towards negative. Yet the stock market is up like 2 trillion in the past three months. And when you look at the stocks that are popping, it's all tiny shitty biomeds you've never heard of, pharmas that jump from $3 to $4 because something or other made it through a trial.

Me? I invested in a birth center.