According to a recent Bloomberg article, Michael Burry of "The Big Short" fame claims that
In the Russell 2000 Index, for instance, the vast majority of stocks are lower volume, lower value-traded stocks. Today I counted 1,049 stocks that traded less than \$5 million in value during the day. That is over half, and almost half of those -- 456 stocks -- traded less than \$1 million during the day. Yet through indexation and passive investing, hundreds of billions are linked to stocks like this. The S&P 500 is no different -- the index contains the world’s largest stocks, but still, 266 stocks -- over half -- traded under \$150 million today. That sounds like a lot, but trillions of dollars in assets globally are indexed to these stocks
I fail to see how this demonstrates a problem. Is he suggesting that there is more money indexed to the stocks than the stocks are actually worth? Well that should be quite obvious as one can easily track the real value of the fund based on its reports of which stocks it holds.
What is Burry trying to say here ?