I think this is point of infliction. I highly suspect that there is probably a mathamatical theorem here which might state that index funds are efficient only when they occupy less than 50% of the asset share. One of the byproduct of this distribution is that many bad companies which wants to do IPO and they will get auto-funded by small-cap, mid-cap index funds. Also, now there are smaller number of players who are moving knobs and index funds are simply the followers to these small players. In 10 years the effects of this would become quite apparent. If Buffet was going to bet on index funds for next 10 years, he would most likely lose.
