February 10, 2020· 45 min

Why The Rise of Passive Investing Might Be Distorting The Market

Orality
Model
69%
Oral-dominant (speeches, podcasts, storytelling)

Speaker Breakdown

HostTracy Alloway(1,250 words)
M:94%
HostJoe Weisenthal(2,031 words)
M:28%
GuestMike Green(4,514 words)
M:25%

Oral Indicators

Agonistic37%
literally, completely, very
Engagement51%
you, our, your
Memory Aids100%
listen, now, so
Repetition100%
right (72x), they (46x), what (46x)
Parallelism73%
And I'm Joe Rosenthal...., So, Joe, I tweeted something r..., But I was talking about have h...
Sound Patterns100%
85 question(s), alliteration: "markets move", alliteration: "barclays brief"
Formulaic Phrases7%
i mean, to be honest, so to speak

Literate Indicators

Hedging13%
maybe, might, rather
Passive Voice14%
is when, being pushed, is supposed
Abstract Nouns26%
investment, recommendation, movement
Subordination10%
until, because, while
Sentence Length43%
Avg: 15.9 words/sentence
Word Complexity51%
investment, analyze, anticipate
Academic Markers7%
according to, the literature
Impersonal Style49%
421 personal pronouns found
Descriptive Style100%
literally, completely, recently

Description

Over the last decade or so, we've seen an incredible rise in so-called passive investing. While definitions differ over what this means, we've seen more and more money poured into index funds (which own every stock in a given basket). Meanwhile, money has been yanked away from money managers who attempt to select individual stocks. One school of thought argues that this is a positive, in part due to lower fees. But is there a dark side? On this week's episode, we speak to Mike Green of hedge fund Logica Capital, who argues that the trend is causing major market distortions that will eventually unwind with ugly consequences. See omnystudio.com/listener for privacy information.