26 Michael Green: The Inelastic Market Hypothesis (Explains the Market's Volatility)

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.

Listen on The Move

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 ā€“Ā 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.

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