The stock market, or any kind of market really, is nothing else than a huge distributed pricing machine.
It is incredibly good at doing that. But it is short sighted. It is able to integrate risks to some extent, on a short time scale, but it is very bad at processing second or third order effects, and can't do strategy.
In other words, the famous invisible hand is completely unable to predict the future.
Humans are also notoriously bad at that, but still better. This is why we have states and CEOs.
at the beginning of every day, the market has a greater probability of going up than down, and a risk adjusted positive expected value (which is a different thing)
Therefore, your money should always be "in the market", not out of the market. Therefore, it's very difficult to make the case that the market is short sighted. I think what you are trying to say is that immediate risks are better understood than longer term, so the more distant future has higher volatility.
It is incredibly good at doing that. But it is short sighted. It is able to integrate risks to some extent, on a short time scale, but it is very bad at processing second or third order effects, and can't do strategy.
In other words, the famous invisible hand is completely unable to predict the future.
Humans are also notoriously bad at that, but still better. This is why we have states and CEOs.