Navigating Passive Investing Challenges

In this episode of Excess Returns, we explore the profound impact of passive investing with one of the most provocative thinkers in the space—Mike Green. Mike has developed a framework that challenges traditional market assumptions, shedding light on how seemingly "passive" investment flows might be actively reshaping markets, valuations, and even systemic stability. Using clips from our interviews, Mike breaks down complex ideas with clarity, humor, and critical insight. This is a must-watch for anyone who wants to understand the hidden mechanics behind modern markets—and what they mean for your portfolio.

Topics Covered:

Why passive investors aren't truly passiveThe systemic risk behind the growth of index investingHow passive flows distort price discovery and market behavior

The QDIA effect and its unintended consequences

The breakdown of correlation between value and growth stocks

Why international markets continue to underperform

Mike's thoughts on unemployment data and the gig economy

The real lesson investors should take from all this

What individual investors can realistically do about it