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Isn't this one utility of free markets, to be a source of predictive consensus about what is likely to happen in the future?
by nugget 7y ago
Isn't this one utility of free markets, to be a source of predictive consensus about what is likely to happen in the future?
- refurb 7y agoExactly. The equity markets are future predictors. When someone is self-interested in speculation, that also provides a signal to the broader market about what might unfold. That signal helps others plan as well.
- K0SM0S 7y agoYes, the prevailing assumption is that "everything is factored in price", including all the irrational (like some aggregate of our prediction of the future, which includes investors thinking like OP).