[Retric]

I was making a different point, yes on most days it’s a net positive. But, it’s also introducing new black swan events like a short squeeze where the price becomes wildly disconnected from the underlying economic reality.

It’s often argued that a small increase on most days is more important than large but rare inaccuracies, however it’s a question of how you’re measuring things. If you use a direct average vs square root of the sum of inaccuracies squared etc.

[travmatt]

I don’t think the stock market has correlated with underlying economic realities in a long time, and I don’t think short selling is the cause of that.

Additionally, I’d think that the small constant corrections of short sellers helps avoid most large cost corrections later.

[Retric]

The stock market is inflated by an abundance of capital which very much represents the underlying economic reality. It’s not representative of the broader economy simply because many industries like higher education is massively underrepresented.

However, once you accept those exceptions I think it’s surprisingly accurate.