But it's not just the left-behind stocks. Even companies in index funds may soon start to believe their stock prices no longer reflect their value despite good earnings or a new product. Those companies might abandon the public market as well. Eventually, as the index doomsayers suggest, there could be either very few, or no, public companies.
And then you have to worry about the U.S. economy in general. There are no $17 trillion economies, or even close to it, that exist without a public market. Perhaps indexing, and the growth of the private market, and private equity funds, and the still very liquid bond market, will morph the U.S. finance market into something that can support the world's largest economy without a public stock market that is neither well used or loved. But at the very least, if indexing continues the way it has, we are likely to see a much different financial landscape than we do now, and fast.
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