SPSM - Michael Burry Is Correct About Passive Investing: Here Is The Proof
On Wednesday morning, the famed "Big Short" hedge fund manager Michael Burry made headlines on Bloomberg, criticizing irrational passive inflows into large-cap companies, saying:
"The bubble in passive investing through ETFs and index funds as well as the trend to very large size among asset managers have orphaned smaller value-type securities globally," in an emailed response to Bloomberg News.
His thesis makes sense. Investors have been moving away from placing their money with "stock pickers" (i.e., many of us) who invest in small-cap companies toward passive index funds that typically favor large-cap companies.
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