Regarding 1, I know they're different. But value isn't knowable except in retrospect.
Regarding 2, my point with my Amazon story is that reasonable people can disagree about the value of something, and therefore be terribly wrong about price, and that it works both ways.
Regarding 3, it's interesting. I think your approach basically means that high-risk companies couldn't ever IPO, because there would be large legitimate differences in independent opinions. That seems like a high cost to pay. If I had my choice, we'd just outlaw sales and marketing. They'd put prospectuses up on web sites, announce the IPO date, and we'd see what happens. Equally unlikely that will ever happen, of course. Legislators and regulators don't work for the citizenry these days.
I think a market is essentially a giant learning machine. But because the knowledge is stored in humans, I think markets need to keep re-learning lessons. The dot-com bubble was a giant lesson in substance over dreams. More than a decade later, enough people had forgotten that they needed a lesson. Facebook and Groupon hopefully taught them that just because they think a product is swell and popular doesn't mean you should buy in at the IPO.
Regarding 1, I know they're different. But value isn't knowable except in retrospect.
Regarding 2, my point with my Amazon story is that reasonable people can disagree about the value of something, and therefore be terribly wrong about price, and that it works both ways.
Regarding 3, it's interesting. I think your approach basically means that high-risk companies couldn't ever IPO, because there would be large legitimate differences in independent opinions. That seems like a high cost to pay. If I had my choice, we'd just outlaw sales and marketing. They'd put prospectuses up on web sites, announce the IPO date, and we'd see what happens. Equally unlikely that will ever happen, of course. Legislators and regulators don't work for the citizenry these days.
I think a market is essentially a giant learning machine. But because the knowledge is stored in humans, I think markets need to keep re-learning lessons. The dot-com bubble was a giant lesson in substance over dreams. More than a decade later, enough people had forgotten that they needed a lesson. Facebook and Groupon hopefully taught them that just because they think a product is swell and popular doesn't mean you should buy in at the IPO.