Instead, they may simply be unable to get enough information to make correct judgments about the value of securities, or indeed may be given misleading information by insiders such as company executives or salesmen from the financial-services industry.
And while Eli may be correct that people who produce a lot of external value get rewarded in the long run, it would help if the economics field did a better job of rewarding positive externality generating behavior and of explicitly arguing for optimal social norms.