Coming back to this having first watched it the day it was released and been gobsmacked then, now i am totally blown away by the sheer weight of relevant, wise and insightful content this video contains. Most importantly, the insights are so vital in informing any investment framework.

Not all retirees want to consume their wealth. In fact, they want to build up their wealth to pass on to their heirs. Therefore, it may be rational to leave their wealth in stocks and not switch to bonds. If the market declines, their heirs will still have the stocks which will have time to recover. DLS

Blown away. Can Raoul and Mike please talk EVERY YEAR? This was worth the price of admission alone. Amazing.

This one interview worth the yearly subscription price. Thanks Raoul for the incredible service!

That was amazing. Probably two of the smartest people i have ever had the opportunity of listening to.

One of the best and most original interviews I saw in a very long time. Thanks!

Easily one of the top 10 RV interviews. Right up there with Tony Deden and Rick Rule.

What a brilliant interview with some deep insights!

Been watching these videos the whole day! What a great interview to end the day on! Wait.... I'll watch another one

Going back to this interview is such an amazement. Two of the smartest people i had the occasion to listen to. Instead of looking at the valuation themselves, they completely bypass it to look at the potentially more impactful legal, demographic and behavioural market movers. Just brilliant !

I have never ever seen such a deeply incisive, utterly absorbing, almost overwhelmingly sharp elucidation of global big picture economics. Pretty stunned. That's being replayed over and over. Thank you. Thank you thank you thank you. X

Deeply brilliant.

This interview is like the T-Bone Steak of financial analysis.

How about central banks equity buying programs? Atleast the BOJ is on its way to becoming the biggest stock holder in TOPIX, I dont know about other central banks. But surely the central banks role does distort this whole equation, right?

So many topics . . .all good stuff. One comment on the on the fear of mass winding down of equities by boomers: While the prospect of having to start taking capital out of a qualified plan or IRA can subject one to sequence-of-returns risk, there are a few ways to immunize oneself to a large degree. Segment your retirement income plan and invest within those segments based on the time horizon of each. If I am not going to touch some of my investments until I am 85 and I am now 65, why would I have that capital in high quality credit? I would still be 80% global equities for that piece. The nearer the time segment, the lower the required return and the less risk I am taking with that "bucket" of money. The segment from which I am pulling next month's rent - or cruise tickets - is coming from laddered bonds, cash, CDs or some other source with no market exposure. . . . Another high quality discussion. Thanks much!

But at least japan will still be japanese.

Well 1 April has come and gone...

Brilliant. BUT you must watch it to the end. Yes, some of it requires some patience and some thoughtful heavy lifting, but it all comes together in the last 20 minutes. An absolutely MUST WATCH video.

great interview as always by raoul of mike :)

How can we get MG to be on the board of the FED??? However, they may hurt him and we need minds like his to keep sanity in this crazy world. I enjoy brilliance and thought provoking conversation from

very interesting big picture conversation about the secular low/short Vol trend we're in now and what might change this. It would have been interesting to get some prospective of sovereign wealth funds in this mix. Great flow; not much filler. This is definitely an early candidate for best of 2017..

Very, very good!

Michael, good catch. It would be interesting to see concentration statistics on public equity holdings only (if such data exists). Thanks for taking the time to respond.

Googled it. Vanguard data is Survey Consumer Finance based. Conflates public equities with private business ownership. Wrong, in my view. Appreciated read though.

Brian R., please provide hyperlink to your source document. Retirement assets are distinct from other types of equity ownership and if have to see the Vanguard source data. I would guess they are citing household survey data which conflates private business equity with public

Michael, according to Vanguard, boomer equity ownership is highly concentrated, with the wealthiest 20% owning 96% of the generation’s stock holdings. The concentration suggest this group is more likely to focus on estate planning and intergenerational wealth transfer rather than selling stocks to fund their lifestyle needs in retirement. How do you factor this concentration into your analysis? Thanks for a thought provoking interview.

Please pardon my French, but that was fucking fantastic. Mind blown, etc. etc. Really great stuff but man this interview also scared the hell out of me. I was on the phone with my mom about 5 minutes after hearing about the little known 70.5 age clause in 401K land. Great stuff!!!

Great interview Mike! Good demographic info. You've been studying.

This interview ended WAY too early. Could have listened a lot longer. And just to say...makes you think about doing Roth or partial Roth conversions.

Robo-advisors are like IKEA to real carpenters.

Micheal G is excellent. Period. I need to go back and listen to his other interviews.

Micheal G has a simple way of articulating more complex stuff. Kudos ! MT

Met Mike Green in 11 while at Ice Farm...very smart and astute investor. Different approach to everyone else. I think this is the most important interview so far this year and so relevant for one's market thoughts. Not surprised that he is a Thiel Capital now

Please get Michael across from Chris Cole ASAP! Would love to hear them spar over convexity, volatility, optionality and anti-fragility... bonus points if you get Nassim Taleb too!

Never mind about the transcript, I found it!

Will a transcript be made available? I'd like to save it for future reference.

Awesome - this is the best episode to date!!! Regarding Fiduciary rule: I knew it came from DOL, was perplexed why, and now I know! My previous impression of it was to align financial adviser's financial incentives with those of their clients. I didn't realize is was so onerous as Michael described. Regarding IRA RMD: My broker informed me that it isn't necessary to liquidate assets to meet RMD, they can be moved to a non-retirement account, but you have to have enough cash to cover the taxes at tax time. Planning makes this easy to manage. Regarding demographics of retirement and investment assets, what about these thoughts?: 1) Consumption will return invested capital back into the economy, to be recycled and part of it reinvested back to like assets, 2) as long as there is stable or growing population, another wave of investors is behind those that are selling for retirement, and another wave behind them, etc. 3) Some assets will be directly passed down through inheritance.

Fascinating interview. Is there any way to obtain a copy of the Active vs. Passive presentation that's discussed?

Mr. Green: Would love to get your comment on the below article. Based on the start of the RMDs you’ve discussed and what Stockman discusses, would you expect equities to take an immediate/unexpected outflow? Thank you for a great interview and for responding in the comments. http://www.zerohedge.com/news/2017-03-14/stockman-explains-mystery-treasurys-disappearing-cash

David, 4% from 401K ($10K), $27K from SocSecurity, 15.3% FICA tax (SocSec + Medicare) for which no further benefit is accrued. Using HRBlock, your tax liability is $7.5K. Now add in $37K increase in taxable income and recognize that your 15.3% FICA tax gives you no asset any longer. Taxes climb to $16K + $9.2K in FICA ($60K x 15.3%) = $25.2K in taxes. ($25.2-$7.5)/$37=47.8%

A 4% RMD from a $250k IRA ($10k) increases the avg. earners income from $60k to $70K which increases the marginal tax rate from 15% to 47%!!...somebody is going to have to explain that math to me....

Brilliant. Shows the huge quality difference between RV interviews and the crap peddled by the large investment banks / sell side in general, as well as the mainstream media. I just love RV.

Don't loose Mike Green!!!

Nicely done. I thought he fleshed out his reasoning quite well and supported it factually. May not agree with all his conclusions but do appreciate the different take. There is little value in listening to people parroting what everyone else is saying.

Mike is a boss. Best interviewee on RV.

Active management as a class is itself deeply flawed since in many cases it is used by financial institutions to cream off large commissions without adding value - this is why people are bailing to passive. This is not to say that all active managers are flawed, but many are. This is a dynamic and complex system that is currently far from equilibrium

Just a pleasure to listen to you both chat like that. What a thoughtful guy Michael is :-)

Very interesting and insightful. Great interview.

I did not follow how the marginal tax on retirees when from 15% to 47%. I don't think that is a precise statement of fact. Nonetheless, great interview.

Fantastic interview!

Far ranging terrifically thoughtful and nuanced. One of the best interviews yet

A while back, David Iben has an interest article on passive vs active.

Big picture, how does the outlook on the boomers' impact reconcile with the thesis that their kids/Gen Y will impact growth positively? Touched on only briefly (re multi gen households).

Holding Cash is a bet

This is why I watch Real Vision TV. Thank you so much for brining the Baby Boomer situation into light.

Increasing a cash position is often prudent and is a major benefit of active management. In order to lower redemption, the fund could lower fees on cash positions and keep the full charges on all other investments. More importantly the fund could report returns on an excluded cash basis and an including cash basis. This is just one idea. With stock trades now at $5 or less and all the ETFs, the active manage needs survive until the market wakes up to reality. DLS

Excellent. Really informative.

Well done. I would encourage the eight people who voted "thumbs down" to give their reasons in the comment section. This will help us understand your disagreement which can be addressed in the comment section or in future interviews. DLS

One of the best interviews to date. Mike Green has been terrific as an interviewee and as an interviewer. More please!

level of deequitization (buybacks, M

met mixed "wealth concentration" with publicly traded securities largely held in retirement accounts as noted in my supplied links. What has supported public equities to date has been the astonishing

Brent, The GAO relied on flawed analysis, primarily that of Robin Brooks, and a presumption that rising EM wealth would offset US retirement needs. The latter has failed to materialize, while the for

The GAO did a study in July 2006 (GAO-06-718) indicating that the boomers selling assets would be unlikely to cause a sharp decline in prices basically due to the concentration of wealth. Much has happened since 2006 and when I first read this report. Maybe there will not be a sharp decline but I also discounted the potential effect of required minimum distributions creating a significant headwind as assets are sold and consumed. Great interview RVTV! Love getting new perspective/food for thought. Thanks!

Excellent

Great interview, a real bright guy would Love to see additional interviews

The DOL Fiduciary Rule is under review (as ordered by Trump) and a ruling is to be issued before the April 10th implementation date. It seems at least a delayed implementation date is likely while the DOL examines the issue.

I learnt more in this video than anything I've read in the mainstream financial media in the last year. The impact of the 1st April withdrawals isn't something I've heard talked about anywhere. This will certainly impact my investing decision. Thanks!

Michael has become one of my favorites and always brings his A game. Great job as always Raoul! FWIW, having been retired for twenty plus years I keep getting the same question all the time---what % can I withdraw annually and have enough. As an alternate to the 4% bandied about, I refer them to the readily obtainable Govt document schedule of the required minimum withdrawals from IRAs and 401-is starting at 70 1/2. The first year # is 3.6% and rises each year based upon your actuarial life expectancy. A comprehensive Academic work using Monte Carlo analysis was published that tried to come up with the optimal annual withdrawal %'s and guess what-----the #'s they came up with are almost identical to the Govt schedule for mandated withdrawals beginning at 70 1/2. I hand these schedules out to folks now and they are relieved to have some sort of guideline to relieve their anxiety.

Mike is a great asset to Real Vision. Often during the interviews he conducts i look forward to his insights as much as anyone he is interviewing so needless to say I was excited for this interview. I found the discussion on forced withdrawls from IRA's/401/s and the exploration of why passive has outperformed active management pretty fascinating. One thing I will say (and this is a general thing, not specific to Mike or any one contributor) is active managers need to come up with fee structures the reward them for performance only and not AUM. Honestly I do not have a robust enough to framework to evaluate the fiduciary rules that were put into place. Certainly the way Mike describes, it sounds like they will lead to behavior designed to reduce liability as opposed to maximize gains.So maybe that can be improved, but i would liked to see a little discussion on ways where the interests of investors and active managers can be aligned. To anyone but a manager, it would be fairly obvious that have any sort compensation tied to AUM causes divergences in this area, not alignments. I am a 29 year old American and my whole adult life passive total market return strategies have provided benchmarks that most active managers don't beat, yet they charge many times more to manage the money. Humans are exceptionally bad at conceiving things they haven't personally experienced so for people in my age bracket it's going to be a hard sell that passive isn't the way to go. Now personally I can buy a lot of Mike's arguments and I love the discussion. But active managers should be putting their money where there mouth is. I am quite certain a framework can be constructed where managers are well compensated when they outperform benchmarks and can still afford to eat when they don't, but there is no reason they should be charging more than a passive total market return fund does during periods they under perform. Again I can totally buy that we are going to enter a period where having active management will outperform passive indexing, and that there could be massive volatility down the road when people and algo's actually start selling these indexes. But it's also not fair to choose a new starting point and ignore how much better passive has done over the last 10-15 years. The question should really be what's going to net you the best return over your entire investment horizon. And that may still be active, time will tell. I am a big believer that do good business, you must align incentives and I think that's the next big step that needs to occur if people are going to trust active more.

seriously this was one of the best interviews i have ever seen. well done!

The insights provided in this interview were absolutely brilliant. This will help take my thinking and analysis to a new level. Mind...Blown!!! Thanks RV

Best. Interview. EVER. (and thats saying a lot on RVTV)

Absolutely one of the best pieces you've put out. Makes you realize how productive it is to put CNBC on mute and listen to minds like this !

insightful and thought provoking.....learned a lot. Bring him back again, please!

Brilliant!

a great amount of straight and essential information !! I think everyone should watch this video... at least TWICE. Great job to both of you!

I could listen to this guy talk all day… He's one of the interviewees I always look forward to. Will be playing this one again too. Thanks RV

On the DOL Fiduciary rule, question for Michael: Trump signed an executive order suspending the DOL rule on Feb 3rd. Guessing though, given your argument in this interview on Feb 18th, the damage has already been done? Meaning the majority of RIAs have already implemented strategies and products to comply with DOL that it would be too difficult/costly to reverse? Again, wonderful insight you don't hear anyone else talking about...Many thanks!

Passive = Skynet. John Connor must kill the Machines!

One of the smartest guys on the planet. Bring him on once a month.

This interview is so good, I am watching it again. Mike Green kind of reminds me of that super smart guy in the back of the room in Math class who intuitively derives most of the math the teacher is teaching, barely studies and is reading 3-4 books at any one time. An incredible mind.

Brilliant...Thanks for Your Time Michael...

The DOL Fiduciary rule has two other impacts on retirement accounts: 1) for maximum safety, cash balances will be held in short-term government bond funds yielding around 0.01%, unless specified otherwise and 2) Merrill Lynch and other major houses will start charging a flat annual fee of 1-2% of assets and allow investors to trade commission-free. The incentives will be to hold stocks rather than cash, at least until markets suffers a correction

MG IS clearly gifted! Love him. I wonder if the buyers when boomers sell, will be the rest of the world. The young and emerging middle class from India and other Asian countries. Hmmmm.

To Michael G; as a 30 year old with roughly 150k in ROTH IRA and 401k with mostly aggressive equity passive funds; do I got into a bonds fund at this point? We have has a great market since i've been working but know watching this makes me nervous of what I hold. Thanks, Brandon

Awesome. Favorite parts are watching Raoul's face while he thinks and connects dots. I feel better now :-)

Would love to see some of Michael Green's research on RVP.

Amazing

The depth of understanding was astounding

Great interview as everyone says. The dangers in ETF's are completely underestimated. This bull market has few enthusiasts so everyone wants to stay liquid and close to the exits and they think ETF's are a cheap way to do that. Everyone is relying on the hope that they day they want to sell will be a normal day and there will be an oderly market. That's highly unlikely to be true as Michael eloquently points out. Be afraid, be very afroid!

So many gems, nuggets here. Much I had not considered before. Great conversation.

Great interview. I sure wish I could get Michael Green's take on gold as long vol trade over say... the next 6 months.

Bravo. Really opened my eyes.

Who gave that a thumbs down?

Fantastic interview. I was already scared now I'm terrified.

Again, Outstanding...thank you RV.

Brilliant interview. If not THE best posted to date, then certainly top 5. Thx much!

I second that Aymman, 15 minutes in and my mind is already blown away. I have had numerous disagreements with people on using passive vehicles for investing in retirement (Don't even get me started on age based retirement funds). I have watched a few interviews Mike Green conducted and was impressed at how sharp he is. RV bring him back in a few months.

That man is smarter than a tree full of owls.

Brilliant interview! The fudiciary rule and its impact on passive investing was a totally mind blowing revelation to me!

Chuck G. -- It's 3.65% for 1st year in 401k, roughly 5.5% in 1st year for IRAs. This climbs each year and in the first year is aggravated by the need to sell both April 1 (for 70.5) and December 31 (for 71). When you build the models up, it works to roughly $85B in selling this year. Equities are more than 100% of that due to need to rebalance towards fixed income. Again, a model of the world, not the world. Bruce S. -- Millenials outnumber Boomers by a small fraction, but they represent far less GROWTH vs capacity than the Boomers ever did. Rate of change is more important than absolute level in almost all scenarios. Henry E. -- drives my wife to drink as well!

Took a shot every time the word phenomenon was mentioned. Jesus I am drunk.

I thought the millennials outnumbered the boomers. Is that correct?

Michael Green is truly amazing. More please.

5% of $14T? it's actually 3.6% of whatever % belongs to that age cohort... I'd also guess that a higher percentage is reinvested in stock as much of the IRA $ may be in the hands of the top 1%. Thoughts?

So he works for Thiel Macro now? Maybe a Peter Thiel interview would possibility, he would have a great perspective on Pres. Trump

Brilliant. Michael should do a series where he sits and talks about whatever he feels like for an hour every few weeks. I'd pay extra for that...

Outstanding. Thank you.

Things learned: 1. 401k largest pool on the planet. 2. Boomers gonna have to start selling. Wow

Quote & Links Provided by Michael Green for this interview: "The wealthy own a much smaller fraction of PUBLICLY traded assets, especially equities, than popularly reported. When it comes to the $14T pool of ERISA assets, the ownership is much more broadly distributed and the assets are destined for consumption" https://s28.postimg.org/vsx7oena5/image001.png http://www2.ucsc.edu/whorulesamerica/power/wealth.html Copy & Paste these links into your browser to view. You can also find and click these links in the interview Transcript. M.

If RVTV service was a publicly- traded instrument, it would be massively overbought at the moment ....the quality of recent interviews has been outstanding.

Good job. Thanks RVTV

Awesome.

Brilliant interview - Mike Green makes you think, and think hard. In some parts of his interviews, I have to really concentrate to keep up with him intellectually. He is clearly an exceptionally smart man with vast knowledge, which was on display here. This one interview in my mind was worth the year-long subscription alone. Thanks RV team!

Very insightful. I would be interested to take a look at the presentation he mentions. Perhaps this can be furnished to RTV subscribers?

Michael Green is, simply put, nonpareil. I could listen to him eight days a week.

I have never wrote a commentary on the internet in my entire life...ever. But this guy totally blew mind. Thanks guys and keep up the good work

Unbelievably good

The wealthy own a much smaller fraction of PUBLICLY traded assets, especially equities, than popularly reported. When it comes to the $14T pool of ERISA assets, the ownership is much more broadly distributed and the assets are destined for consumption - https://s28.postimg.org/vsx7oena5/image001.png http://www2.ucsc.edu/whorulesamerica/power/wealth.html

Four comments 1) the percentage of withdrawal required under the RMD slowly increases over time and is based on life expectancy 2) the discussion presumes that you have no cash in your IRA/401K when you begin to draw down which clearly acts as a buffer 3) the discussion misses the point that dividend payers can significantly delay when and/or reduce the amount of assets you actually have to sell 4) working past 70 while not as tax efficient is not always an alternative for those on the lower end of the income scale (probably small / minimal retirement savings) and honestly, some people just like working for its socialization/personal value aspect. I totally agree with the problems associated with robo and passive vehicles and think they will be a train wreck.

On Monday, got an email titled, "This Week on Real Vision TV". Was super psyched to see a Michael Green interview in the queue, then realized I had to wait til Thursday to watch/listen - bummer! However, well worth the wait. Impeccable.

Stupid how good this interview is.

Get him back early and often! Sheer brilliance - worth the annual subscription on this one interview alone.

A question is do baby boomers really have to sell down their retirement given the distribution of wealth? It seems like most equities are held by the wealthy, who may not need to sell down much to retire.

That was awesome - great stuff. Would love to see Michael's presentation if he's willing to post it to RVTV or RVPubs.

When thumbs up is not enough...wonderful. Should probably release the whole boomer/ demograophic/retirement segment to the public.

Totally agree with Alan C. I am truly thankful for RV giving me the opportunity to learn from all these brilliant people.

Brilliant Michael. "Too much aggregation" sounds like an Austrian if I've ever heard one!

One of the all time best.

This was outstanding! Great discussion, very eye opening regarding the DOL Fiduciary ramifications.

The emergence of ETFs and passive strategies .. is one of the most under-researched phenomena in the markets. One may get all the fundamental, macro/technical analysis right .. but these major invisible passive/active forces may end up determining your performance

In terms of the big picture Michael is up at the very top and these conversation style interviews are particularly enjoyable.

Absolutely amazing piece of content, will rewatch for sure!

That was fairly mind blowing and I will definitely have to watch it at least once again!

That was fairly mind blowing and I will definitely have to watch it at least once again!

8 minutes in and this is already one of the best interviews this year.