A problem with this discussion is that both "fundamental" and "value" are overloaded. What I am asserting is that the commonsense notion of value is indeed real in this context, just that the market is disconnected from it.
When it comes down to it, there is such a thing as talent. There is also something real called taste. The tragedy is that it's often really difficult for this to be reflected in a market. Perhaps a part of the problem is that talent is actually widespread: there is no distinct rare "superstar" talent, just lots of cute young women with a certain kind of look. Therefore, there is no rarefied taste that can recognize the "superstar."
The valuation of personnel is also greatly complicated by all sorts of other factors. A musician might have amazing chops, but the wrong kind of personality to deal with the rigors of touring or the temptations of stardom.
In essence, there are "model analysts." In the article, they are called tastemakers. They don't publish their conclusions, instead disseminating information at parties. They are not necessarily paid directly for their analysis, but most certainly participate in a reputation market.
The takeaway is not that talent and taste do not exist. They do exist. It's that truly distinct "superstars" and the talent that can recognize them are something of a marketing fiction. I agree that such markets are perpetual bubbles. Because of this fact, they do more harm than good -- they act to cloud information to buyers and reduce access to resources.
Re: Trading -- knowing that certain kinds of markets are always bubbles points to certain trading strategies.
When it comes down to it, there is such a thing as talent. There is also something real called taste. The tragedy is that it's often really difficult for this to be reflected in a market. Perhaps a part of the problem is that talent is actually widespread: there is no distinct rare "superstar" talent, just lots of cute young women with a certain kind of look. Therefore, there is no rarefied taste that can recognize the "superstar."
The valuation of personnel is also greatly complicated by all sorts of other factors. A musician might have amazing chops, but the wrong kind of personality to deal with the rigors of touring or the temptations of stardom.
In essence, there are "model analysts." In the article, they are called tastemakers. They don't publish their conclusions, instead disseminating information at parties. They are not necessarily paid directly for their analysis, but most certainly participate in a reputation market.
The takeaway is not that talent and taste do not exist. They do exist. It's that truly distinct "superstars" and the talent that can recognize them are something of a marketing fiction. I agree that such markets are perpetual bubbles. Because of this fact, they do more harm than good -- they act to cloud information to buyers and reduce access to resources.
Re: Trading -- knowing that certain kinds of markets are always bubbles points to certain trading strategies.