Papers and Resources Discussed:
Risks Hiding in Plain Sight
https://www.informedmomentum.com/risks-hiding-in-plain-sight-how-the-dominance-of-passive-investing-is-reshaping-market-risk/
Is Quality Broken?
https://www.informedmomentum.com/is-quality-broken-ai-driven-disruption-is-testing-standard-definitions-of-quality/
Buy High, Sell Higher:
https://www.informedmomentum.com/buy-high-sell-higher/
Topics Covered:
* The hidden divergence beneath index performance and why the market isn’t as stable as it looks
* Why value and momentum are working together—and what that signals about market broadening
* How AI and deglobalization are driving a major regime shift in markets
* Why momentum investors ignore narratives and focus purely on what’s working
* The structural risks created by the rise of passive investing and index concentration
* How tracking error replaced real risk—and why that may be dangerous
* Why quality stocks (especially software) are under pressure in the AI era
* The key insight behind 52-week highs as a powerful momentum signal
* Why buying stocks near highs works despite investor intuition
* How momentum strategies adapt to changing leadership and market regimes
* The importance of combining factors like value, momentum, and quality for long-term success
Timestamps:
00:00 Intro and major market shifts
01:32 Market divergence beneath the surface
03:00 Factor performance and broadening market trends
05:13 Why market concentration hurts factor investing
06:48 AI and deglobalization as structural drivers
08:14 Does this environment change how you invest?
11:02 Has the market sped up? Momentum implications
14:00 Passive investing and hidden structural risks
17:00 Tracking error vs real risk in portfolios
19:00 AI as a potential change agent for markets
21:09 How passive flows impact factor investing
24:00 What defines “quality” in factor investing
27:04 Why software and quality are under pressure
29:13 AI disruption and changing expectations
32:20 How to evaluate factor underperformance
34:35 Comparing today’s market to the 1990s
37:38 Buy high, sell higher: 52-week highs
41:00 52-week highs vs traditional momentum
43:20 Combining signals for better outcomes
46:00 Why 52-week highs improve downside protection
48:17 What momentum is picking up today
50:21 Misconceptions about momentum and growth
52:12 Timing and implementation of momentum
54:18 Momentum reversals and market behavior
57:17 Future research and improving momentum signals