Index Funds Bubble? [Michael Burry article]

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BeBH65
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Re: Michael Burry is suggesting passive index funds are now similar to the subprime CDO's

Post by BeBH65 » Sat Feb 15, 2020 3:05 pm

This article has been discussed before.
snailderby wrote:
Wed Dec 11, 2019 9:29 am
This claim has been discussed extensively, including in the following threads:

viewtopic.php?t=289284 ("Index Funds Bubble? [Michael Burry article]")
viewtopic.php?t=255013 ("Passive Index Investing, A Bubble Bound To Burst?")
viewtopic.php?t=252434 ("Hidden Index Bubble - I'd love to hear some thoughts!)
viewtopic.php?t=240803 ("Indexing the next bubble?")
viewtopic.php?t=240254 ("Are we in an index fund bubble? Bill Ackman thinks we are.")
viewtopic.php?t=238144 ("Are we in an Index fund bubble? Are we irrationally overlooking individual stock analysis?")

Also, here is an article responding to Burry's article:

https://awealthofcommonsense.com/2019/0 ... bble-myth/
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). | Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles

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LadyGeek
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Re: Index Funds Bubble? [Michael Burry article]

Post by LadyGeek » Sat Feb 15, 2020 3:39 pm

I merged outofdxb's thread into the on-going discussion. The combined thread is in the Investing - Theory, News & General forum (general discussion).
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Dottie57
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Re: Index Funds Bubble?

Post by Dottie57 » Sat Feb 15, 2020 7:36 pm

columbia wrote:
Wed Aug 28, 2019 6:12 pm
He’s shilling for active management.
He is also whining about being unable to make the profits he wants. At least my opinion.

InvestInPasta
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Stampede to get out: bond ETFs get crushed in selloff

Post by InvestInPasta » Wed Mar 18, 2020 9:57 pm

It's happening for bonds ETF

https://www.reuters.com/article/us-heal ... SKBN2152UC
Stampede to get out: bond ETFs get crushed in selloff

But the violent swings in bond markets in recent weeks has taken a toll on some of these widely traded ETFS, with their market prices diverging sharply from the value of their underlying market holdings as ETF providers struggle to transact individual bonds.
...
With liquidity drying up across the board, funds trying to offload any sizeable holdings are having to sell at lower prices than quoted on trading platforms, market players said.

“There is massive selling pressure on bond ETFs and funds – when you provide NAV on an over-the-counter product with very little bids similar to what you are currently seeing in the bond market, it becomes a stampede to get out,” said a portfolio manager at a European fund in Hong Kong.
...
Some analysts say ETFs can aggravate market selloffs as they will try to minimize the gap between their net asset values and market prices.

“ETFs are the compounding factor in this crisis as, given the redemption-creation mechanism of these ETFs, they can compound selling pressure in a falling market,” said Alberto Gallo, head of macro strategies at London-based hedge fund Algebris Capital.
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Uncorrelated
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Re: Index Funds Bubble? [Michael Burry article]

Post by Uncorrelated » Thu Mar 19, 2020 3:39 am

There is massive pressure on treasuries and underlying bonds. There is no evidence that that is caused by ETF's and/or mutual funds specifically.

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