On 1; Is there any data to suggest that inflows to index funds are pouring significantly more money into companies within an index than if people invested directly or with hedge funds?
Absolutely. The ETF space has exploded enormously over the past decade as the Fed pumps trillions of dollars into risk assets.
Having spent most of my career as a hedge fund trader, I absolutely agree with Buffet. But I think a decade of the largest monetary interventions skew the numbers massively in favor of a long only passive investor.
I cannot comment on a full macro basis, but it is definitely true that being listed on an index such as S&P 500 will spike the market cap. TSLA was a recent example here. Matt Levine has an interesting piece on this (as usual) regarding trading on index inclusion as securities fraud: https://www.bloomberg.com/opinion/articles/2021-01-05/dystop...
Having spent most of my career as a hedge fund trader, I absolutely agree with Buffet. But I think a decade of the largest monetary interventions skew the numbers massively in favor of a long only passive investor.