Between Dec 1899 to Dec 1999, the Dow went from 65.73 to 11,497 representing a compounded yearly increase of 5.3%. In aggregate, the return on stocks can never be more than what a business can churns out in aggregate. No doubt some people can invest better than some others but in aggregate, the return can never be more than 5.3% in stock investing for all the investors combined. Those who perform better than 5.3% are those who took home more from the same piece of pie at the expense of those who perform less than 5.3%. Moreover, in reality, investors as a whole cannot even hope to match this aggregate (5.3%) that a business earns. This is because in stock investing, there are intermediaries where a cut is paid for and all of these cuts are part of the aggregate that the business produces. In other words, in stock investing, it is wrong to assume that all the profits will go to the investors' pocket, part of it (a pretty substantial ratio) goes into the pockets of those who facilitate the trade.
Certainly, there are many times when the value of the subset far exceeds the value of the product. Those are the moments where logical math encounters a problem that will be addressed through time. So what is driving this mistake? It is none other than emotions. When emotions come into play, it deviates the facts that would otherwise be logical. What would then brings the facts back to reality? A pin will always lays in wait for every emotional bubble when people realize they have drifted too far off. Market is like a pendulum swinging from unsustainable emotions or optimism to unjustified emotions or pessimism, the centre between these two extremes is the efficient and logical point. The pendulum will never remains stagnant at a single point. Firstly, Wall Street will never allows it to be so. When there is no story, there is no dough. Somehow a story must always be created to generate interest to swing the pendulum to the side which is normally not to the general investor's interest.