The Perils of Passive Indexation

Real Vision Essential ·
Featuring Michael Green

Published on: December 11th, 2019 • Duration: 76 minutes

In a long awaited interview, legendary investor Mike Green joins Real Vision CEO, Raoul Pal, to discuss the corporate credit cycle, the rise of passive indexing, and the consequences of mass baby-boomer retirement. Green argues that the simple algorithmic logic of passive vehicles causes irrational capital allocation. He asserts that these passive strategies only make money in a liquidity-enhanced environment, and he explains that stresses to the indices' lack of cash reserves could create market volatility. Green and Pal examine the shift to passive vehicles and how that shift is molding the fate of both baby-boomer pensioners and millennials. Filmed on December 5, 2019 in London.