The share of investors whose decisions are driven by valuation-sensitive (mean-reverting) behavior has collapsed from about 80% in the mid-1990s to about 10% today, replaced by passive investors with 100% marginal propensity to buy/sell regardless of valuation, shifting the market from mean reversion to mean expansion.
causalpending
Speaker
Mike GreenEvidence Quote
“as those investors gain share, the market moves from mean reversion to mean expansion. Okay? And this unfortunately matches exactly what we see in the market.”
Source
The Trillion Dollar Trap | Mike Green on Passive Investing's Fatal Design Flaw— Excess ReturnsCreated: 6/18/2026, 1:59:25 PM
My Notes
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