[hellsten]

For those interested in indexation, FRMO's Murray Stahl has published some thought-provoking articles about indexation here:

http://www.frmocorp.com/indexation.html

In principle, the theory behind indexation is very much like the theory of perfect competition. In perfect competition, the idea is that no participant is sufficiently powerful or sufficiently large to influence the price of the product. The product is assumed to be homogeneous, and shares are designed to be homogeneous. In the theory of market efficiency, no one has an information advantage over anyone else, and there is always enough liquidity. It seems reasonable to make those assumptions. Yet, it is worth making some observations about them.