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Markets arrive at prices for the assets they trade by arriving at an equilibrium between buyers and sellers. When the flow of accurate information about the fundamentals of the market fails to reach the market participants, the market diverges from equilibrium and reports inaccurate prices. Only when the information has entered the market and been absorbed by the participants are equilibrium restored and valid prices re-established.

In a market dominated by institutions with a short-term perspective, relying upon industry analysts with an MBA focus on financial aggregates, information about the events within a company or industry group can take a long time to reach the market. Consequently, there may be a long delay between the emergence of the exemplars of a new industry group and the market's recognising them as a group with its own fundamentals and principles of valuation. In addition, the potential of technology to cause discontinuous changes in values through technological leverage is generally not recognised by the market until what has been called ``the creative destruction of capital'' is well underway.

The market exhibits little evidence of having distinguished the fundamentals of New Technological Corporations from other ``high-technology'' companies with very different properties. As the managements of this new group of companies communicate their distinguishing properties to the market both by conventional channels of education (such as meetings with securities analysts and industry forums) and by developing their businesses in directions that exploit the advantages they possess, the market can be expected to revalue their companies.

Editor: John Walker