[Exsubmariner]

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find this wanting. You assume that the boom represents capital misallocation, but I don't see proof for that. The very point of the market is experimentation, which is hugely wasteful, so why can't booms lead innovation and capital development in a way that a steady rise wouldn't? Why is a boom *necessarily* a bad thing? And how is it different to the money provided by ill informed punters on the stock market?


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Phil,
I think you hit the nail on the head. I have always had a problem with the idea that the market cannot "learn" over time. I think the more mature a market is, the better the decisions in allocation it will make.

History counts.

I think that a lot of the notions put forward by economists in general ignore this principle.