2Q22 Investor Letter
“Why does buying at the confirmed onset of a doomed future produce positive results in the U.S. stock market? The market anticipates future events and builds the collective expectation of market participants into today’s price. Barton Biggs in his book Wreath, War and Wisdom describes the stock market as a wise, rational, and insightful complex decision-making system. The reason was that the stock market encompasses very large, diverse, independent, and financially motivated individuals. Note there is a difference between insights of the crowd and group thinking. In stock markets, participants can’t sit around and exchange ideas about what the right answer should be and then finally reach a consensus result, but they act individually to discover information and thus reach price equilibriums.”