Is the tech sector the killer of active investing?

This is a very amateur point of view

...what?

Curious what OP thinks the directionality is for the upcoming week...

Trends trend until they don’t

I don't see the tech sector destroying active investing. There is no reason that it would.

VP in ER

The current tech boom is definitely very different from late 1990s. We won't see a crash like the burst of dot-com bubble. 

Curious what people think about this / different perspectives

Tech is a misnomer. Industrial software is just software/apis carrying out a process a human would so it’s really an industrials company. Recommen Andreesson’s Software is Eating the World essay

The bubble WILL burst, that's not the question. The question is when.

The tech boom is driven by few things:

1. Low interest rate - These high growth, big TAM names are valued on cash flows many many years out, so the theoretical DCF value is going up as discount rate goes down. Problem is some of them will never generate positive cash flow. 
2. Some sectors are completely uninvestable, right now, so that money has gone to tech as "safe haven" - restaurants, oil and gas, casino, to name a few, are just not catching bids in this market for short-term issues in my view, when they gonna struggle for 1-2 years before they revert back to a 2019 normal environment, not to mention the pent-up demand (esp for casino) should drive outperform when they come out of COVID. Harris Associates, a well-respected value investor, highlighted that only 5-10% (forgot exact number) of the long-term value has been impaired for a business in these sectors as a result of COVID, but how much have restaurant stocks gone down? Way more. 
3. High proportion of irrational market participants - I am very concerned about the Robinhood folks. In the long run, the market value will track the intrinsic value of the underlying business, which is the present value of the future free cash flow that business can generate. Right now, what we see is people bidding up Blink Charging and Nikola, the latter generates no revenue but has 11 billion in market cap. Articles talk about the younger generation cannot build wealth because they got screwed by both the Great Recession and now COVID, but if they continue to rely on Reddit or some Tiktok "investing guru" (they are neither investing nor gurus) and think they have generated 300% return this year because they know what they are doing in the market, they don't deserve any wealth when market comes to its senses.

I think that can be said more so for wealth management for non-UHNW investors rather than the HF/AM space. People with a few hundred thousand in retirement savings will not pay the 2% fee to give their money to a money manager when they can use wealthsimple or another similar platform. However, although HF returns have been going down in recent years, there will still be a place for the top 10-25% who are able to consistently generate above-market returns for wealthy investors.

Dude have u considered that u can find the best stocks within tech still? 

I can see what OP is driving at...but I think calling it the killer of active investing is a bit misleading - I would say it is forcing active investors to take up more tech/growth names. At the end of the day, the PM's job is to generate returns and if returns are only in tech, then to tech they must rotate.

I'm drawing very broad generalizations here - yes, the market loves growth/tech more than anything else (post-vaccine rotation notwithstanding), so yes tech names generally have the highest growth prospects so attract more inflows and buyside interest.

But even in non-tech sectors, the higher growth names always trade at much higher multiples compared to average growth names. Unless someone is running an energy-focused fund, the PM's fiduciary responsibility means aligning the portfolio toward what the market is favoring (growth/tech). If tech ever goes for a multi-year bust, the skilled active investor will be rotating out to quality value or value. 

10 years ago, Einhorn, Ackman, Loeb were generally held up as top-notch investing geniuses with a value style. I think today, you can see that value has floundered for the past 10 years and Ackman/Loeb have adapted very well, Einhorn stubbornly held on to his value framework. So yes, if the argument you're trying to make that tech is the killer of active investing, sure...But active investing by nature means recognizing that the market will reward different attributes tomorrow than it did yesterday and positioning yourself to take advantage of that.

On the mutual fund side, value mutual funds have suffered and a few promise to hold dear their value ideals and suffer. The more flexible ones are saying they will adapt to some quality-value framework instead of just continuing to underperform.