I studied economics in school, however I was always a sub par student.
The market is very very efficient at what it is optimized to do, I don't think "fair" has any objective meaning in a diff of the bid ask spread, but I get your point.
To drill down on my assumptions, the market is optimized to price things based on what people are willing to pay which is supply v. demand, i am not disputing that.
What I am saying is that the price people pay for things is based on information which is distributed highly asymetrically.
Information is siloed efficiently by large brokers (of information) and even then, is largely narrow. Barriers to entry have never been lower here, but also facing massive follow on lag time.
You can build a search engine than google could when it started, but you will be using mostly their tools e.g webkit, v8, big query, tensorflow or something by a similar entity or OSS.
So pricing information is based on what uninformed people are doing in a market. So the price is not in line with reality to the extent of how the same actors would act with all people knowing the same thing.
Everyone on an airplane pays a different price for their seat. That, in my eyes, is "fair" but unimportant.
However, public markets serve as liquidity for companies. I have been asking myself what the point of them really is.
Volume of traded firms shares must keep being traded, because people need liquidity. However, companies no longer need public markets to get started and grow. So investors obviously expect an exit, but companies have shorter lifespans, they also are no longer insulated from global macro trends.
Obviously, "public markets" will end soon and be replaced with "markets". Trade restrictions will get lifted as markets open globally. People will still not know how to participate and this will be bad short term. Long term good obviously.
So I guess what I am saying is, a large part of the economy is a private market, public markets are more risky, less valuable and cater to people who have an asymmetrical advantage of eithet information or positioning, so why the fuck would anyone bet on them? Because a diversified portfolio has gone up for the last 10 years? Makes no sense, they aren't nearly as useful as they once were.
The pricing mechanism of markets is no longer calibrated correctly.
Edit: meant to say that was the bubble. Markets have to exist because companies are already sold into them, however, good companies don't go public but people keep putting more money into the bad companies equity. So something line twitter coyld fail, or even lehman, GE isnt even faring that well. So these mediocre assets are being driven up as people put money into their shares, but their discretionary spending goes to private companies. As I said, i am not like an economist or something, so I dont really understand what the fuck is going on, but 1) it seems pretty insane and 2) it seems like no one else has any idea either.
.jpg){kind=link}