You&#x27;re technically correct. I&#x27;m using the term &quot;price discovery&quot; crudely in light of the audience. &quot;Valuation&quot; would be a more accurate, if more ambiguous, term.<p>If everyone buys indexed ETFs, the market stops discerning between the index&#x27;s components. If everyone buys &quot;China,&quot; the difference between &quot;shitty thing over there&quot; and &quot;half-decent asset if not levered through the roof&quot; vanishes. When the market starts falling &quot;finger in the pie&quot; syndrome sets in. Nobody has any idea what one thing is worth over another. Even if they do, they probably can&#x27;t trust their data, and even if they can, they know nobody else can. So everyone dumps &quot;China,&quot; punishing all assets alike.