The Weekly Quill — Indexed to the Hilt with Logica Funds Mike Green

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Ever ask for a task to be tended and get this gem in reply: “But (insert patronizing nickname), you’re so much better at that”? We’ve all got one of these people in our lives. We might even be our own worst example and have made a life that’s already short that much briefer because we have become mired in avoidance techniques. Of course, there’s a rich history to this infuriating tendency.

A U.S. War Department Technical Bulletin penned in 1945 featured Colonel William Menninger, a psychiatrist, observing soldiers using “passive measures, such as pouting, stubbornness, procrastination, inefficiency, and passive obstructionism” to get back at their superiors. Menninger surmised that these “immaturity reactions” were caused by “routine military stress” and a need to reassert their independence.

In a 2016 posting on The SITREP military blog, Blake Hall wrote, “Willful incompetence was (troops’) only way to express their feelings without retribution. In 1952, the APA adopted phrases from Menninger’s infamous memo and logged them in its diagnostic manual. Suddenly, the medical community had a phrase to describe the annoying way their underlings take six days to do a 30-minute task.”

The American Psychiatric Association cordoned those with Passive Aggressive Personality Disorder into three camps. Passive-dependent patients are clingy, helpless and indecisive. Passive-aggressive patients fit the classic “whatever” contingency that overpopulates modern America – stubborn, resentful and prone to obstruction. Passive-negativists complain of being misunderstood, resent the relatively fortunate and swing between hostility and contrition. The obvious overlaps in diagnoses have challenged the psychiatric community in recent years.

Those who never escape the pull of passive aggression find themselves bitter late in life, convinced that whatever has gone wrong is on someone, or something, else. If unchecked, passive aggression can devolve into abject paranoia. Many active investment managers inhabit this dark place, refusing to concede that Federal Reserve policy long ago negated their ability to generate excess returns. As the confidence in the Fed’s put has swelled in recent years, some managers have hidden behind index emulation. Others have reached for returns and yield in too clever a fashion, producing nothing but strife in the end. The headlines are peppered with legends in finance who forfeited the match for life. Unless you join forces, it’s impossible to fight the Fed given only monetary policymakers have the weapon of the printing press on the investing battlefield. “Adieu,” they say with regret. “The writing is on the wall.” Indeed, passive investing is on pace to overtake active in a handful of years.

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