Michael Green’s Warning: Why Passive Investing Could Crash the Market

Michael Green reveals the hidden economic dangers and the risks of passive investing in today's market.
In this episode, Andrew Brill welcomes back Michael Green, Portfolio Manager and Chief Strategist at Simplify Asset Management, for an insightful discussion on the current state of the economy.
Discover why market indexes continue to hit new highs despite underlying economic weaknesses, and learn about the potential risks of passive investing.
TIMESTAMPS:
00:00 - Introduction
01:34 - Economic Deceleration and Employment Data
02:23 - Market Highs vs. Economic Weakness
05:00 - Understanding Passive Investing
08:07 - Risks of Passive Investing
10:39 - Impact of Employment on 401ks
13:57 - Job Growth and Market Risks
15:51 - Misinterpretation of Market Highs
18:55 - Active vs. Passive Management
21:45 - Concentration in Large Stocks
24:03 - Geopolitical Risks and Semiconductor Market
25:24 - Socioeconomic Inequities and Inflation
28:44 - Personal Debt and National Debt
30:30 - Interest Rates and Economic Impact
35:57 - Federal Reserve Policies and Public Impact
36:47 - Google's Antitrust Case
39:47 - Protecting Personal Wealth
41:04 - Importance of Long-Term Investing
41:52 - AI and Economic Productivity
42:40 - Closing Remarks
---------------------
At Wealthion, we show you how to protect and build your wealth by learning from the world’s top experts on finance and money. Each week we add new videos that provide you with access to the foremost specialists in investing, economics, the stock market, real estate and personal finance.
We offer exceptional interviews and explainer videos that dive deep into the trends driving today's markets, the economy, and your own net worth. We give you strategies for financial security, practical answers to questions like “how to grow my investments?”, and effective solutions for wealth building tailored to 'regular' investors just like you.
There’s no doubt that it's a very challenging time right now for the average investor. Above and beyond the recent economic impacts of COVID, the new era of record low interest rates, runaway US debt and US deficits, and trillions of dollars in monetary and fiscal stimulus stimulus has changed the rules of investing by dangerously distorting the Dow index, the S&P 500, and nearly all other asset prices. Can prices keep rising, or is there a painful reckoning ahead?
Let us help you prepare your portfolio just in case the future brings one or more of the following: inflation, deflation, a bull market, a bear market, a market correction, a stock market crash, a real estate bubble, a real estate crash, an economic boom, a recession, a depression, or another global financial crisis.
Put the wisdom from the money & markets experts we feature on Wealthion into action by scheduling a free consultation with Wealthion’s endorsed financial advisors, who will work with you to determine the right next steps for you to take in building your wealth.
SCHEDULE YOUR FREE WEALTH CONSULTATION with Wealthion's endorsed financial advisors here: www.wealthion.com/
Subscribe to our KZbin channel / @wealthion
Follow us on Twitter / wealthion
Follow us on Facebook / wealthion-109680281218040
____________________________________
IMPORTANT NOTE: The information, opinions, and insights expressed by our guests do not necessarily reflect the views of Wealthion. They are intended to provide a diverse perspective on the economy, investing, and other relevant topics to enrich your understanding of these complex fields.
While we value and appreciate the insights shared by our esteemed guests, they are to be viewed as personal opinions and not as official investment advice or recommendations from Wealthion. These opinions should not replace your own due diligence or the advice of a professional financial advisor.
We strongly encourage all of our audience members to seek out the guidance of a financial advisor who can provide advice based on your individual circumstances and financial goals. Wealthion has a distinguished network of advisors who are available to guide you on your financial journey. However, should you choose to seek guidance elsewhere, we respect and support your decision to do so.
The world of finance and investment is intricate and diverse. It's our mission at Wealthion to provide you with a variety of insights and perspectives to help you navigate it more effectively. We thank you for your understanding and your trust.

[@Wealthion]

We are partnering with SALT to offer our Wealthion community an exclusive opportunity to access a full day of top-tier financial insights and networking opportunities - all from the comfort of your own home and at a fraction of the cost of attending in person. Learn more here: wealthion.com/lp/salt24conference/

[@emcardleinvest]

Mike is one of the most thoughtful guys out there. I've learned a ton from him. Thanks for this

[@Wealthion]

Thanks for the feedback!

[@JB-ty8vf]

Honestly I really enjoy this for being monotone without all the garbage other podcasters and guests force into their voices. Michael speaks very flat and i highly prefer it.

[@thomassieckmann8962]

The very best of Mike Green. I'm happy he finally acknowledged, at least partially, the effect of cumulative inflation

[@HoneyBadger80886]

12:59 500-800 x. Yes. And I thought my math was off. I so appreciate the external validation. We're so f'd. ❤ strength and peace. Save in bitcoin.

[@erinsweet8147]

Corporate taxes are just expenses passed on to the end user. If I have a business and my taxes go up, my prices go up, and my customer pays them.

[@prolific1518]

You lose customers and go out of business.

[@tonylinardi3089]

until they can't

[@eugenefirebird8938]

Not true. Don't give me that crap. There is a thing called competition and if it is there, you pay your own taxes. Not us wingo. Hey why didn't business pass along to consumers some of the big tax cuts they got in 2017? They took the big tax breaks and then they raised prices. Only true competition keeps prices down and lower. What we have now is collusion.

[@user-pj6bl5md5r]

​@@prolific1518 not fully true. I have a business and as taxes and prices rose so fast. I have passed all that to others. I'm doing better since inflation than ever before. Crap rolls downhill.dont be at the bottom.

[@kyleinpa5285]

@@prolific1518No, because every other business is having their taxes increased too

[@morrisfamily7707]

Easy listening...thanks x

[@Wealthion]

Thanks for watching!

[@1lllllllll1]

41:55 He evidently didn’t listen to the NVDA investor call this week. Jensen clearly laid out why exactly there isn’t any meaningful competition and why there won’t be in the foreseeable future. AI has the same inflection point as the web back then. You gotta grow fast and furious and once you’ve reached critical mass, you dominate the space, to heck with everyone else including government. AI will produce an even more disparate wealth cohort than internet did. Get ready for Trillionaire individuals with more buying power than sovereign wealth funds, and geopolitical influence that dwarfs many a NATO member state.

[@InvestgoldUK]

Fascinating and a large part of the reason I avoid the ETFs in the USA and EU. Also, when you look at a lot of Emerging markets funds, they are all 5-10% in Taiwan Semiconductors. What could go wrong?

[@mbican]

US dollar might consistently lose 10% of value every year against any asset with limited supply

[@RothBalloon]

These kinds of sentiments have been stated for decades upon decades and they have been proven wrong more times than not. No one knows what’s going to happen which is why diversification is the key to mitigating risk. Passive investing has allowed the average person to take back some of their power and money from greedy investment advisors who have been stealing from us for years. I’ll continue investing in broad market indices and take my returns whatever it may be. Good luck with your stock picking. In the end, we get what we deserve…eh. Thanks to John Bogle for opening my eyes. RIP

[@prolific1518]

Isn't great when the data doesn't matter after all the revisions over many months?

[@margaretkneller4670]

401(k)-what percent of persons, under 40 years, have this option? and what percent of under 40s will have have access to 401(k). Most under 40s I talk to don’t even think they’ll get an adequate social security. And social security is a bribe by govt to the populace, you remove that bribe, then your populace has a whole different relationship to its government.

[@HoneyBadger80886]

Right about now the USPS is thanking their lucky stars their retirement is Front Funded. No wonder deJoy wanted to raid the Service.

[@HoneyBadger80886]

30:26 au contrary, sir. 25% v 27% Compounded is a pretty big sum. Much respect. ❤

[@jwholmes2]

You guys were doing ok up until the end, but then you blew it. No corporation pays taxes. They sell products and services and pay all expenses from the revenue they get from customers. So you can raise taxes on corporations all you want, but it will come right out of your pocket in higher prices. And as far as the Google AT case, the App Store belongs to Google. Why do they have to allow competitors in their own store, now matter how big they are? The only people who are complaining is their competitors, which is ALWAYS the case with antitrust lawsuits from the beginning of antitrust. I couldn’t care less how big Google is. They don’t force me to do anything.

[@redtiger7268]

The "opt out" is bullshit. These fund managers think you owe them your earnings for them to play with. I have had to result to lawsuit just to stop some places from stealing my income.

[@HoneyBadger80886]

And some of the machinations are ai / algorithm driven. 24/ 7/ 365...a human cannot keep up.

[@user-ys5qp4bq4s]

I use their HEQT, great collar strategy.

[@HoneyBadger80886]

Is it a Blackrock Vanguard or Fidelity product?

[@user-ys5qp4bq4s]

@@HoneyBadger80886 It's Simplify's(the guest's company). JP Morgan has a similar fund called HELO. This strategy was only available to big money starting with one million, but now retail can buy it too.

[@lustgarten]

Did I get this. He suggested we don't need so much defense as we don't have aggressors on our borders. That might have been true before the Wright brothers.

[@SelfishNeuron]

can anybody here point me to the paper mentioned at 12:40 about the change in market by $1 investment?

[@Mrtickleberries]

The problem is those funds are going to suffer from demographics. I.e. eventually as people retire demographics means there are going to be more taking out than from the indicies than putting it in.

[@lustgarten]

1 bc over 1 ad is two years longer.

[@josho6038]

Lmfao....I literally plant physical cash...it is going to grow beyond your wildest imagination

[@HoneyBadger80886]

Lol...meeee toooo

[@eugenefirebird8938]

Keep buying stock indexes at 6x real value. Great idea.

[@josho6038]

@eugenefirebird8938 no u dope...I withdraw it from the insolvent banks and literally bury it

[@mulatto2776]

At what point do we stop pretending that setting up the economy for a few people to make most of the money with an accident?

[@bwebbster]

Whoever is ‘designing’ the podcast art for the videos particularly the text needs to take note: it’s offensively bad graphic design. completely unreadable and anxiety-inducing. I’ve given wealtheon a decent shot at keeping me as a follower since Adam but it’s a mess from top to bottom

[@Wealthion]

Thanks, @bwebbster. We are in the process of redesigning these and take this seriously!

[@HyperspaceHoliday]

I stopped listening when he said that American need for defense spending is relatively minor. Who cares what "the need is" when the fact is our defense budget is more than the next 20 largest defense budgets combined. What a clown.

[@markbrophy5454]

He's right, we don't need to spend much for defense because we have 2 oceans protecting us and we get along with Canada and Mexico. We spend money on "defense" to maintain an offensive empire.

[@HyperspaceHoliday]

@@markbrophy5454 you didn't read what I said. Because it does not matter if we don't need to, America ALWAYS will spend an extremely huge amount on defense. Every political party hack that has ever entered Washington wants to increase defense spending. That he fails to understand this basic fact about America just indicates that he no grasp on reality.

[@MaddieBr]

Sigh. The top 0.6% already pay 40% of taxes; the U.S. tax system is VERY progressive. Raising tax rates will incentivise the rich to shelter income and tax receipts will decrease. This has been proven many times over!

[@irishScott2]

This argument has never been serious. What's magical about 40%? If theoretically one person in the nation had all the money, that person would pay 100% of the taxes. Given current wealth and income disparities the top 0.6% should pay a lot more than 40%

[@rajraina1789]

The interviewer is a fool?

[@repkechr]

Mike Green runs 25 different funds. 24 of them fail to beat an SP index fund since inception. His 1 fund that does, is his BTC fund. However, that fund lags BTC itself. Should we be surprised that an asset manager who can’t beat a passive fund, is complaining about passive funds? Is this investment advice or just sour grapes?

[@AnselLindner]

Zero mention of demographics other than the brief mention of "boomers".

[@jamesheadings8956]

I know that you guys are suffering from the loss of Adam Taggart. I see that in the comments. I will listen to Mike Green before Adam every day of the week.

[@HoneyBadger80886]

One must actively step away from Blackrock Vanguard and fiat. Save in bitcoin. Bitcoin is the peaceful separation of Money and State. PMs NonETF btc in self custody. 😎

[@Bigredbulldog401]

Wanna really fix the system? Tax businesses don’t tax the worker/laborers then raise interest rates on upper class and lower on lower class this would keep the economy going strong and slow down the rich spending it won’t make it even but it’ll definitely help lower class

[@erinsweet8147]

Businesses just see the tax as any other expense and add the cost to the goods they sell. The end user always pays them.

[@Bigredbulldog401]

@@erinsweet8147 most businesses avoid taxes with loop holes so it wouldn’t matter but workers wouldn’t be getting taxed over and over on same paycheck

[@prolific1518]

​@@erinsweet8147 and that's when consumers make the decision to go to a competitor with cheaper prices.

[@ericthehalfmexican9187]

OK, comrade.