The Folly of Crowds: Why Most Market Opinions Don’t Matter

Outside of active traders and short-term speculators, why should anyone care what the market thinks about a company’s valuation on any given day?

This question cuts through a lot of the noise in financial commentary. The truth is, the market—meaning the day-to-day collective pricing of stocks—is largely driven by people who have no idea what they’re talking about. Yes, there are institutional players and professionals who make up a portion of the volume, but the sentiment that sways prices often stems from average, uninformed investors reacting emotionally to headlines, trends, and hearsay.

There are moments, of course, when the market’s price aligns with a company’s intrinsic value. But even a broken clock is right twice a day. The fact that the market occasionally stumbles into accuracy doesn’t make it a reliable oracle. If anything, looking to the market to determine a company’s true worth is akin to using public polling to gauge truth—shallow, biased, and mostly a waste of time. I’ve written about this before in detail: Polling the Public: An Utter Waste of Time.

Take Tesla as an example. I’ve followed the company closely for over a decade. I’ve read the shareholder letters, the earnings reports, the patents, the biographies, and the footnotes. I’ve watched the company evolve through chaos, innovation, and scale. And yet, despite the depth of available information, the typical commentary I hear about Tesla—from talking heads on CNBC to random guys at the gym—is painfully uninformed. It’s usually parroted from a news clip or a viral post on X (formerly Twitter), not derived from actual analysis.

This disconnect isn’t just frustrating—it’s foundational to how the market works. It’s this very disparity in understanding that creates opportunity. The ignorance of the masses is the edge of the few. The water-cooler crowd buys high on hype and sells low in fear. The disciplined investor or skilled trader, by contrast, buys when it’s quiet, when it’s hated, and when it’s undervalued. They either hold and enjoy the cash flow or sell at a premium when the crowd finally catches on.

This isn’t elitism; it’s epistemic humility. If you haven’t put hundreds of hours into researching a subject, you probably shouldn’t be investing in it. And you certainly shouldn’t be broadcasting your opinion as if it holds weight. Ask questions. Learn. Build a thesis. But don’t conflate casual familiarity with knowledge. That’s not how investing—or reality—works.

The market isn’t a democracy of wisdom. It’s a battlefield of narratives. And if you’re not careful, you’re just cannon fodder for those who are better informed.