As a company's effective float falls because more of it is held by passive, an earnings report triggers a much larger price move (the active managers trading the information are in a smaller pond), and perversely the end of post-earnings-announcement drift this produces is academically labeled 'more efficient'—even though a stock falling 50% on one report and rising 50% on the next is not efficient in any reasonable capital-allocation sense.

causalpending

Speaker

Mike Green

Evidence Quote

perversely that's called more efficient

Source

The Trillion Dollar Trap | Mike Green on Passive Investing's Fatal Design FlawExcess Returns
Created: 6/18/2026, 1:59:25 PM

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