Excess Returns  cover image

Mike Green on the Dangers of the Rise of Passive Investing

Excess Returns

00:00

How Does Liquidity Scale With Market Cap?

The liquidity of let's just take Apple, for example, right? So Apple has roughly a $2 trillion market cap. The smallest stock in the S&P 500, it used to be Delta Airlines. Liquidity scales with the volume that is traded and the volatility of the security. If these theories are correct, then we actually could enter into an environment in which valuations rise to levels that we never imagined. Just never imagined.

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