Can't we both be in bubble and bust? They are not mutually exclusive. We have just too much money and excess capital chasing limited investment opportunities - so this creates bubbles.
On the other hand the increased inequality and concentration of capital in fewer hands means that a lot of financing strategies are performing worse and capital is less efficiently allocated.
For example - if the optimal allocation of $1B USD is 1000 investments of $1M - we could have that outcome if the capital is split between 300 people each having 3.33 million.
But a single billionaire will prefer to make 10 100M investments, because the cognitive overhead of taking so much decisions will wear him down.
An individual doesn't have to be rational for the system as a whole to be.
In your example, that billionaire's 10 $100M investments will underperform. Meanwhile, some of the 300 people who each invested $1M will overperform. As a result, in the next round of capital allocation, the billionaire is no longer a billionaire while some of those single-digit millionaires are now billionaires.
This is actually not all that far off from how things are actually working right now - a number of people from humble middle-class backgrounds are getting phenomenally rich because they understand tech and make smart capital allocation decisions, while a number of rich billionaires who can't be bothered to update their mental models are riding their companies all the way down.
All of this is capitalism working as intended. It's only a "bubble" if everybody is a winner; it's only a "bust" if everybody is a loser. Normal operation in capitalism is for there to be both winners and losers.
On the other hand the increased inequality and concentration of capital in fewer hands means that a lot of financing strategies are performing worse and capital is less efficiently allocated.
For example - if the optimal allocation of $1B USD is 1000 investments of $1M - we could have that outcome if the capital is split between 300 people each having 3.33 million.
But a single billionaire will prefer to make 10 100M investments, because the cognitive overhead of taking so much decisions will wear him down.