I’m not sure the recursive argument even fully works for the stock market, these days—I suspect it’s more like a sticky tradition that crudely mimic the incentive structure that used to exist, like a parasitic vine that still holds the shape of the rotted-away tree it killed. When there’s any noise, recursion amplifies it with each iteration: a 1-year lookahead to a 1-year lookahead might be almost the same as a 2-year-lookahead, but it’s slightly skewed by wanting to take into account short-scale price movements and different risk and time discounting. By the the time you get to a 1-year lookahead to a 1-year lookahead to a...*10, it’s almost completely (maybe completely) decoupled from the actual 10-year lookahead, with no way to make money off of that decoupling.
I’m not sure the recursive argument even fully works for the stock market, these days—I suspect it’s more like a sticky tradition that crudely mimic the incentive structure that used to exist, like a parasitic vine that still holds the shape of the rotted-away tree it killed. When there’s any noise, recursion amplifies it with each iteration: a 1-year lookahead to a 1-year lookahead might be almost the same as a 2-year-lookahead, but it’s slightly skewed by wanting to take into account short-scale price movements and different risk and time discounting. By the the time you get to a 1-year lookahead to a 1-year lookahead to a...*10, it’s almost completely (maybe completely) decoupled from the actual 10-year lookahead, with no way to make money off of that decoupling.