re: Michael Burry calls passive investments/index funds a bubble

The only thing standard index ETF purchases do poorly is reward overvalued stocks and under appreciate companies that have better outlooks versus current market “vote.”

The tax efficiency, costs, liquidity and structure make up for some of these shortcomings.

And to the poster who said ETFs don’t own the underlying stocks, not true. SPY owners actually have ownership in the underlying securities. Highly liquid ETFs carry a tight spread on premium/discount, so unless you get a bad execution price, arbitrage in the markets remove the risk of paying way above/below NAV.

ETA: If there is any excess or bubble right now it’s the perceived safety of 0% or negative yielding bonds across the globe.