To the OP, this is good to remember, the power to use capital not just to ride the flows of value but to actually create value, to create flows.
In terms of focusing investment in places where one can not only capitalize off of current or expected value-gain but also to directly cause value-gain, as a consequence of one’s investments, this is good. Capitalism indeed works both ways, as it should. So the sticking-point is, what to do about falling/failing value?
Whatever information is included in a stock price will reflect short and long-term predictions of value; but most stocks are not traded individually but as parts of larger aggregates, huge portfolios. And as my investor friend likes to tell me, the market is “childish” and “immature”, it over-reacts in the ultra short-term; a single bad news story can spark stocks to slide, meaning that individual stocks also see their “expected future value” fall as the bundled portfolios in which they are contained fall.
Market on the large scale are hyper-reactionary. This is a problem because the small scale, individual company stock cannot dissociate itself from the large scale. Now we get into large scale manipulation games designed to make money at the expense of other losses, the whole “buy low and sell high”. In a way this logic is more about capitalizing off of the reactionary and highly mutually dependent nature of markets and less about literally CREATING VALUE in the long-term. Technically it is more like a parasitic sucking of value from existing potential and converting it into cash.
And cash is not value, cash is the potential to be value. So one kind of potential is being traded or sacrificed for another. But since that ends up returning back into markets as they stabilize (recover to exist in a temporarily less hyper-reactionary mode) the whole process continues to sustain itself. Value increases in the sense that life capitalizes off of life; but any specific values continuing to exist is not guaranteed even with a “rising tide”.
It is also useful to note that at present, markets are elevated due to EXTREME debt accumulation. In such a context of the large scale, any individual values-assessments, predictions or value-investment creation will be far less certain and less potent, less “grounded in reality” than otherwise.
When the body becomes hooked on simple sugars it experiences a temporary uplift in value followed by a more long-term decrease of value and decay; if the sugar intake continues, values will continue to slide until they vanish, which is to say until their potential is exhausted and becomes appropriated by other, more rational-real self-valuings.