93 Mike Green: Stock Markets Are Less Efficient, and More 'Inelastic.' What does that mean?

Michael Green, Chief Strategist at Simplify Asset Management joins Pierre Daillie and Adam Butler for a revealing conversation about his thesis that stock markets are less efficient and more 'inelastic' because of the proliferation of passive index investing over the last few decades, and what that means. His thesis and research, now corroborated and examined by academic studies, labelling it as the 'Inelastic Market Hypothesis,' by Xavier Gabaix and Ralph Koijen, Jean-Philippe Bouchaud, and Valentin Haddad, shine a bright new light on how and why markets are displaying increasingly violent and rapid bouts of volatility, that may intensify over the coming years and decades.

Research mentioned in the conversation:

In Search of the Origins of Financial Fluctuations: The Inelastic Markets Hypothesis (Gabaix and Koijen) The Inelastic Market Hypothesis: A Microstructural Interpretation (JP Bouchaud) How Competitive is the Stock Market? (Valentin Haddad) Robin Wigglesworth's Book - Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever

Where to find Michael Green:

Michael Green on Linkedin Michael Green on Twitter - @profplum99 Simplify Asset Management ******

Where to find the Raise Your Average crew:

ReSolve Asset Management ReSolve Asset Management Blog Mike Philbrick on Linkedin Rodrigo Gordillo on Linkedin Adam Butler on Linkedin Pierre Daillie on Linkedin Joseph Lamanna on Linkedin "You don't have to be brilliant, just wiser than the other guys, on average, for a long time." Charlie Munger Welcome to Raise Your Average, our deep dive journey into learning from the people and process behind the world of investing. Through conversations with leaders in the investments game, we peel back the layers of the onion on how these holders of the keys to the kingdom allocate their time, their energy, and their dollars. We are all students and we are all teachers. We are the average of the 5 people we spend the most time with. Come hang out with us for a while and raise your average, as we raise ours.