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

Posted on 9/6/19 at 11:46 am to
Posted by Y.A. Tittle
Member since Sep 2003
104028 posts
Posted on 9/6/19 at 11:46 am to
quote:

The crux of the issue is that it works well if limited amount of people invest in these funds, because you still need people to regulate the market and sell off shitty companies and buy up good ones. If the spread ever gets too wide, the shorts and active managers will take care of that in theory. Unless the amount of passive investors grows to critical mass and you can't overcome this large amount of "dumb" money holding onto a stock. I don't think we are anywhere near this level of passive investing.



Can you give a ballpark on current percentages versus percentages that you would deem might would be approaching "critical mass"?
Posted by Louie T
Member since Dec 2006
36376 posts
Posted on 9/6/19 at 5:41 pm to
quote:

Can you give a ballpark on current percentages versus percentages that you would deem might would be approaching "critical mass"?

A lot more than the <25% where it currently sits
This post was edited on 9/6/19 at 5:42 pm
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