Musings on Markets: The Big Market Delusion

The article examines how overconfidence in large market opportunities leads to systematic overpricing of companies across sectors (dot-com, digital advertising, cannabis), resulting in bubbles that eventually correct when growth assumptions prove unrealistic. The author argues that big market stories, combined with overconfidence bias and disconnect from fundamental valuation, create predictable cycles of excess pricing followed by sharp corrections. Rather than viewing bubbles as harmful market failures, the author contends they drive innovation and should not be heavily regulated.