SI402: Why Markets Can’t Stop Trending ft. Richard Brennan

What happens when markets stop behaving like machines and start behaving like living systems? In this episode, Richard Brennan joins Niels to explore passive investing, complex adaptive systems, volatility suppression, and the hidden forces reshaping modern market structure. From structured products and reflexive flows to demographics, trend following, and the fragile illusion of equilibrium, this conversation asks whether markets are becoming more unstable precisely because investors believe they have become safer. A thoughtful and layered discussion about why price discovery may be weakening, why trends persist, and why systematic strategies may be more relevant in a world increasingly shaped by feedback loops.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE-----Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.Learn more about the Trend Barometer here.Send your questions to info@toptradersunplugged.comAnd please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast.Follow Rich on Twitter.Episode TimeStamps:00:00 - Introduction to the episode and overview of today’s discussion02:22 - Richard Brennan breaks down passive investing through the lens of complex adaptive systems06:51 - What “complex adaptive systems” actually means in markets14:53 - Why passive investing changes market structure without individual investors realizing it24:06 - Niels discusses structured products, volatility suppression, and market fragility29:23 - How demographic shifts could eventually reshape passive investing trends35:37 - Trend following performance update and the TTU Trend Barometer38:48 - Listener question on variance, volatility, and correlation in systematic trend following42:04 - The “murmuration” analogy and why markets behave like flocks instead of machines48:31 - Why equilibrium theory survives despite failing to explain real markets51:17 - The endogenous engine of markets and the mechanics of reflexivity57:47 - How trend followers align with the architecture of modern markets01:03:12 - Why passive investing weakens balancing forces and strengthens trends01:13:43 - The statistical evidence showing markets structurally trend over time01:21:18 - Why trend following may become even more effective in the futureCopyright © 2025 – CMC AG – All Rights Reserved----PLUS: Whenever you're ready... here are 3 ways I can help you in your investment Journey:1. eBooks that cover key topics that you need to know about In my eBooks, I put together some key discoveries and th