Buy High, Sell Higher Travis Prentice on Dispersion, Passive's Structural Risk and Why 52 Week Highs Don't Mean What You Think

This episode explores how massive structural shifts—AI, deglobalization, and the rise of passive investing—are reshaping markets and what that means for investors. Informed Momentum Company CIO Travis Prentice breaks down why 52 week highs don't mean what you think, the extreme dispersion beneath the surface of the market, why traditional definitions of risk may be flawed, and how investors should think about momentum, quality, and diversification in a rapidly changing environment. Papers and Resources Discussed: Risks Hiding in Plain Sight Is Quality Broken? 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

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Buy High, Sell Higher Travis Prentice on Dispersion, Passive's Structural Risk and Why 52 Week Highs Don't Mean What You Think is an episode from Excess Returns by Excess Returns.

This episode is 00:59:18 long.

This episode was published on Apr 24, 2026.

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