I think a big part of the point he's making is tracking error. Your index fund is not the index. It's a fund that attempts to track the index. Many S&P500 funds

I think a big part of the point he's making is tracking error. Your index fund is not the index. It's a fund that attempts to track the index. Many S&P500 funds have a very good benchmark so far, but that needn't be the case in periods of extreme volatility when things like counter-party risk come to bear on moving in and out of large positions. You look at that tracking index of VOO: 0.02 https://screener.fidelity.com/ftgw/etf/goto/snapshot/keyStatistics.jhtml?symbols=VOO https://screener.fidelity.com/ftgw/etf/goto/snapshot/keyStat... That's very good, but it's not nothing. If liquidity really crunches, that could theoretically skyrocket. Wouldn't be the end of the world likely, but you could see some non-negligible losses as MASSIVE funds have to move 60% of their portfolios, and all the other traders know it. It could basically put passive investors on the wrong side of the GME nonsense. Not saying it's really plausible, but it could theoretically happen if the markets moved so fast that spreads effectively stopped trading for long periods.