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I suspect we will reach an equilibrium where most people are indexing and a few very good active managers are in play, while most of the less competent managers have been booted out. There might be a few swings towards either side on the way to that steady state.

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The problem is that the pool of "few very good active managers" is changing all the time.

And if you happen to find an outperforming active manager, it's like buying high -- managers, like the market, always revert to the mean.

I totally get what you are saying, I am just saying that people will still fall for active managers like they do today, although in far fewer numbers and active managers will not completely go away. Also, when almost all people are indexing there will be a few arbitrage opportunities for active managers.

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