As such, "the markets will solve it" isn't a great problem-solving strategy (e.g. climate change)
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As a casual observer of the markets since 2007, one thing I find striking is that markets are driven by greed & FOMO, anxiety & panic, rumors -- not reasonable risk anticipation and accurate future forecasting. They implement collective stupidity more than collective intelligence
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Markets are irrational, not even suitable for simple optimization problems. They do a very poor job at incorporating all available information (e.g. experts who spent February warning us)
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And they're all relative to what analysts think, as opposed to the truth. Make a huge bucket of money this quarter? Your stock will still fall if an analyst got it wrong and thought you should make more. Strangest thing ever.
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I only realized the horror of this the first time I worked at a public traded company
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I wonder why people thought that markets can be candidated for future forecasting in the first place
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It always looks that way, especially during market turbulence, and people like Thaler and Schiller are inclined to agree with you.
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The flip side is that it appears to be really, really hard to consistently beat the market. Behavioral funds (built to take advantage of greed, FOMO, anxiety, panic, and rumors) haven't outperformed.
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Investors and companies are reactive and usually focussed on short term gains. Governments invest in long term initiatives (even unprofitable ones) like space race, antibiotics for superbugs, climate change, stopping possible pandemics etc.
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Well, 'the markets' is just a label for the collective behaviour of humans - kind of like language - you can separate it from human behaviour for the purpose of analysis, but it is still an idealizing move, no matter how useful
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Great analogy
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