Quote Originally Posted by Bill Moore View Post
I think Dayuhan's point about the market determining a fair price for services and goods is the ideal state, but in many cases is no longer true. Computer based trading frequently has nothing to do with the true value of company, but rather is driven by an equation that tells the computer when to buy and sell resulting in billions of dollars moving rapidly from stock to stock driving prices up and down in an irrational manner.
Well that's not true at all.

Statistically I don't know if this impacts long term value investors over time or not...
Of course it impacts the long position. Expanding liquidity means there's more capital free to park.

...but I think an argument can be made that the price of a stock is still driven my the market, but not by the value of the service or goods provided in many cases.
What's the difference? The value of a service or good is determined by the demand for it and its available supply. Mating demand with supply is precisely a market does by definition. Folks tend to forget that supply and demand are functions that evolve over time plus some other parameters. So markets need not only deal with a snapshot of some God's eye view of the condition of buyer and seller, but also with risk each takes in agreeing on a price now for fulfillment later.

The other issue is the too big to fail issue, and that has artifically determined value in many cases, not the value of the service or goods. If the market determined the value then these companies would have gone out of business.
You needn't introduce such an awkward, loaded notion as "artificially determined value" to understand "to big to fail." You just need to get rid of the assumption that either value or losses are conserved.

Additionally large companies that consolidate competiters by buying them out gain a pricing advantage that prevents effective competition, and without effective competition for some products (food being one of them) you can't rely on the market to determine fair prices.
So...large companies can undercut the prices of newcomers, and this means they can set any price they want? See where that goes wrong?

We're in a period of transition, the voices from occupy wall street are only one voice informing what the future economic system will look like. I agree with Dayuhan, at least if you rely on the mass media to stay informed about OWS they're mostly young punks with no message, but that shouldn't distract political leaders from the fact that there is a great deal of discontent with the current system throughout America (and apparently globally).
When isn't there?

I used to make a lot of money in stock market at one time, even when the overall market wasn't doing so well. I can't make sense of it now. Could be I just lost my magic touch, but I think there are forces influencing it now that have made the old rules obsolete.
Yes, there are. One is scale. The other is empiricism. Another may be that you're overestimating the performance of your portfolio, or your contribution to its success.