WealthVest: The Weekly Bull & Bear S10E34: Michael Green, Chief Strategist at Simplify Asset Management
Oct 15, 2025
Michael Green, Chief Strategist at Simplify Asset Management, delves into market dynamics, particularly the distortions caused by passive investing. He explains how passive flows lead to systematic distortions and disproportionately boost mega-cap stocks, sidelining local businesses. Michael warns of potential overvaluation incentives and draws parallels between current AI investments and past market bubbles. He also discusses the K-shaped recovery, highlighting how asset-rich groups thrive while wage earners struggle, reflecting deeper economic inequalities.
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Career Path From Valuation To ETF Innovation
- Michael Green traced his path from Wharton valuation work to small-cap value and hedge funds, later managing Thiel's capital.
- He then shifted into ETFs after a 2020 rule change enabled derivative overlays and tax-efficient strategies.
ETF Rule Change Democratized Complex Strategies
- ETF regulatory changes in 2020 unlocked hedge-fund-like strategies for retail via derivatives and overlays.
- ETFs now offer tax efficiency and access to sophisticated hedges previously limited to hedge funds.
Passive Funds Behave As Systematic Traders
- Passive funds are not truly passive because inflows and outflows force daily trading activity.
- That systematic buy-if-cash, sell-if-redemption algorithm meaningfully distorts market prices over time.
