FYI: The man who sounded the subprime mortgage alarm more than 10 years ago is now sounding a new alarm—index funds are the next collateralized debt obligation (CDO) bubble. In a recent Bloomberg interview, Michael Burry explains his logic.
Burry argues that passive indexing removes price discovery because an index fund must go out and buy all the stocks in the index. They don’t require the security-level analysis that is required for true price discovery.
Regards,
Ted
https://www.etf.com/sections/index-investor-corner/big-short-whiffs-indexing
