Passive Investing Critic Michael Green Warns of Market Structure Crisis in New Interview

Michael W. Green, the longtime critic of passive investing strategies, has renewed his warnings about fundamental changes in equity market structure in a new interview published January 20, 2026, on the Net Interest podcast.

Green, whose commentary on market mechanics has gained traction among institutional investors, used the platform to elaborate on what he characterizes as systemic risks emerging from the growth of index funds and passive investment vehicles. The interview, hosted by finance analyst Marc Rubinstein, marks Green's latest effort to draw attention to structural concerns he's been raising for years about how capital flows through modern markets.

The conversation comes at a moment when finance chiefs are increasingly grappling with questions about market liquidity, price discovery, and the mechanics of equity valuations. For CFOs managing treasury operations or evaluating capital allocation decisions, Green's thesis—that passive investing creates a "tragedy of the commons" dynamic—raises uncomfortable questions about whether traditional market signals still function as intended.

Green's central argument, which he's developed over years of public commentary on X (formerly Twitter) and Substack, posits that as more capital flows into passive vehicles that mechanically buy securities based on index weights rather than fundamental analysis, the market's ability to efficiently price assets deteriorates. The "tragedy of the commons" framing suggests that while passive investing may be rational for individual investors seeking low-cost exposure, the collective effect undermines the market infrastructure that everyone depends on.

The timing of the interview is notable. As corporate finance teams prepare for 2026 planning cycles, many are confronting an environment where traditional valuation metrics seem disconnected from underlying business fundamentals—a phenomenon Green has attributed in part to passive flows. The question of whether stock prices reflect genuine corporate performance or simply index membership has real implications for companies considering equity issuance, buyback programs, or M&A transactions.

Rubinstein, whose Net Interest publication focuses on financial system analysis, has made these structural market questions a recurring theme. The podcast episode, available to paid subscribers, runs nearly an hour—suggesting a detailed exploration of the mechanics Green believes are reshaping equity markets.

For finance leaders, the practical question isn't whether Green's warnings prove prescient, but whether current market structure requires different approaches to capital markets engagement. If passive flows dominate price formation, does that change how CFOs should think about investor relations, capital structure decisions, or the timing of equity transactions?

Green's commentary has historically been controversial within the investment management industry, where passive strategies have become dominant business models. But his willingness to challenge consensus views on market structure has earned him a following among investors and corporate finance professionals looking for frameworks to understand market behavior that often seems detached from traditional fundamental analysis.

The interview adds to a growing body of commentary questioning whether the infrastructure of modern capital markets—built largely in an era of active management—remains fit for purpose as passive strategies account for an ever-larger share of equity ownership. Whether that translates into actionable insights for corporate finance teams remains an open question, but it's one that's becoming harder to ignore.