r/stocks
The market is not just irrational anymore...as of some time now, everyone is financially incentivized to keep pretending
The market rally is fueled by aligned financial incentives across all participants, masking stretched valuations and weak fundamentals.
- Valuations are stretched and market concentration is extreme.
- Market rewards multiple expansion rather than fundamental improvement.
- Macro data is often revised or interpreted through an overly bullish lens.
There was a time when the market was simply the market....
An inflation number came out. A jobs number came out. A GDP print came out. The market reacted. Good data was good, bad data was bad, and institutions were not forced to pretend the story made sense.
Then the game changed.
Administrations started treating the stock market as a scoreboard. Every rally became proof of policy success. Every strong headline number became a victory lap. Every weak detail underneath the surface was ignored, revised away, or buried under “resilient consumer,” “soft landing,” or “AI productivity boom.”
At first AND decades ago... big institutions still pushed back. If the data looked weak, if inflation was sticky, if earnings quality was deteriorating, they sold the market.
Now even that seems to have changed.
The largest market participants are no longer neutral referees. They are deeply incentivized to keep the rally alive.
Asset managers earn fees on AUM. A 20% selloff means lower fee revenue. Hedge funds need performance. Banks need deal activity. CEOs need stock-based compensation. Private equity needs exits (SPACEX BECOMES SCAPE IT). Analysts need bullish narratives. Financial media needs engagement. Politicians need a strong market. Retail needs the rally because most of us are now exposed through stocks, options, 401(k)s, ETFs, and momentum trades.
So the lie becomes collective.
Not necessarily a literal conspiracy. Something more dangerous: aligned incentives.
Everyone knows valuations are stretched. Everyone knows concentration is extreme. Everyone knows the market is rewarding multiple expansion more than fundamental improvement. Everyone knows some of the macro data is revised, selective, or interpreted through the most bullish lens possible.
But nobody wants to be the first one to say the emperor has no clothes.
Because if the market sells off, everyone loses:
- Politicians lose the “strong economy” narrative
- Asset managers lose AUM
- Banks lose fees
- CEOs lose stock comp
- Analysts lose access
- Retail loses gains
- Momentum funds lose performance
- The financial media loses the easy bullish story
So we keep going.
Bad inflation? “Contained.”
Weak consumer? “Selective pressure.”
Bad breadth? “Megacap leadership.”
Ridiculous valuations? “AI supercycle.”
Layoffs? “Efficiency.”
Debt? “Strategic leverage.”
Dilution? “Growth capital.”
Speculation? “Risk appetite.”
The market has become a smoke train, and almost every participant is now standing on the tracks hoping it keeps moving.
I am not saying short everything. I am not saying the market crashes tomorrow. I am saying the incentive structure has changed AND now even retail is massively aligned with the lie.
The rally is not just about fundamentals anymore. It is about how many powerful participants are now financially, politically, and psychologically invested in preventing reality from mattering.
At some point, fundamentals may matter again.
The real question is: does this market still price reality, or has reality become the one thing nobody can afford to acknowledge?
Alwayshasbeen.jpg
I realize this has been the case for some decades now, but i feel before we had SOME players still keeping the truth alive (one of the being retail). now retail is as embedded in the lie as the president to get credit for this rally...
Please retail in 08 we’re taking out ZIRP mortgages to flip homes. Retail is, and always will be, the worst players at keeping the truth alive.
with the massive trading adoption and how easy it now is to buy stocks...retail dip buyers (me included) have become a considerable force or tailwind for the rally. notice the 5% sell of stopped? there is now a huge group of us buying at -3% and almost all retail bought at -5%...
i think the times changed for retail
Especially with the recent tech boom, it really is apparent. So many companies out there who also have great earnings across longer period timeframes are significantly undervalued or on the decline in stock prices despite a clean record of fundamentals, but the tech and AI boiz have just been running too rampant as of the previous two quarters.
Looking at higher timeframe volume profile, you see guys like MU and SNDK trading in the high hundreds to over a thousand and while it's true that the fundamentals look good, but they're seriousy overvalued. Hell, NVDA, which has proven itself more for years now with high tier fundamentals is still a fraction of the price as those chip manufacturing companies, and that's just in tech alone and not looking at other sectors.
A lot of stocks are just trading too far above fair value and some have honestly rode so high beyond value area high that it seems as if they are flying on the wings of Icarus. I won't say that there is a bubble as massive as the dotcom era, since a lot of these companies are still printing hella money unlike many of the gambles on random dotcom companies back in ye old days, and short of some Enron fiasco, we probably won't see a disaster like that again.
That being said, I do believe that several of them likely should be trading at much lower values and I wouldn't mind them getting to the points they are today had it been on a slower and steady growth over a period of years rather than just a few quarters. That's when it begins to look a bit too scary, even for someone like me who's generally bullish.
Settle down
Moooom, the LLMs are yapping again!
lol
We’ve attached way too much of our society to its bloat
Trash post.
U just mad you missed the rally lol.
Stay mad.
Sorry, we're removing this post because it's a duplicate, or extremely similar, to another that was already posted.
We appreciate the effort but we don't need multiple posts that cover the same topic.
Bro, just put fries in the bag. Thank you
Why does this read like AI slop?
\Honestly? I’m glad you asked that really important question.\
BECAUSE IT IS
Time to inverse Reddit again and buy more calls