There are _always_ investors trying to beat the market on fundamentals, even if many of them are just overconfident. We'll never got to the point where the entire market is index funds because, as more people invest in index funds, the possibility (and pay-off) of actual alpha by picking stocks rises. This isn't sustainable because people will notice the sustained performance difference between stock-picking and index funds (the same way we do now) and the opposite tendency will push things back towards an equilibrium