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The Acquirers Podcast
Michael Gayed on Leading and Lagging Indicators, Small Caps, Inflation, Big Tech | S07 E05
Feb 10, 2025
Michael Gayed, Publisher of the Lead Lag Report, dives into investment strategy dynamics and market indicators. He discusses the tension between value and growth investing in a tech-centric world and critiques misleading economic narratives that affect public perception. Gayed also examines the divergence between small-cap stocks and credit spreads, reflecting on the implications of these signals for investors. With a touch of humor, he underscores the unpredictable nature of financial markets and the significance of navigating time in investing.
58:41
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Quick takeaways
- The dominance of passive investing strategies has raised concerns about overcrowded trades and market dislocation, particularly impacting large-cap companies.
- The ongoing shift from value to growth investment strategies suggests a potential fundamental change in market dynamics driven by technology's influence.
Deep dives
The Role of Passive Investing in Market Dynamics
The discussion highlights the dominance of passive investing strategies in recent years, particularly following the era of quantitative easing (QE3) initiated in 2012. This has created a scenario where assets such as the S&P 500 and NASDAQ have consistently outperformed, leading to concerns over a passive bubble in the equity markets. The argument suggests that when everyone invests passively, it results in overcrowded trades, raising the risk of market dislocation. As household allocations toward equities favor a select few large-cap companies, the implications for overall market stability become increasingly troubling.
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Discover
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Listen to the best highlights from the podcasts you love and dive into the full episode