Full Signal The 'everything bubble' poses a bigger risk than AI, $11 billion strategist says
Nov 5, 2025
Mike Green, chief strategist at Simplify Asset Management, dives into today's market risks, focusing on the 'everything bubble' driven by passive investing. He explains how this trend inflates asset prices beyond their fair value and draws parallels between the current AI boom and the dot-com bubble. Green also critiques Bitcoin as a failed payment system and discusses how 401(k) designs have intensified passive investments. With insights on market structure and hidden economic weaknesses, it's a thought-provoking conversation for any investor.
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Model Flow Multipliers, Not Just Spreads
- Recognize that dollar inflows have outsized market-cap effects compared with classic EMH assumptions.
- Adjust position sizing and risk models to account for a $1 inflow creating multiple dollars of market cap.
Earnings Can Be Circular And Misleading
- Reported earnings growth can hide circular revenue and vendor-financing that inflate top-line metrics.
- Cash flows and sustainable margins may be far weaker than headline EPS suggests.
AI’s Economics Favor Deflation, Not Perpetual Multiples
- AI is a deflationary productivity technology even as markets price it as unlimited growth.
- Large-cap firms should see multiples compress as law of large numbers bites, not expand indefinitely.
