"People are no longer investing, they're speculating," said the CIO. "Is that wrong?" he asked, not waiting for an answer. "Depends on what you're speculating in."
Investors are implicitly worried about further price gains, they're not really forecasting future fundamentals. "Investing is about estimating an asset's fair value based on fundamentals, then forecasting what others will be willing to pay for those fundamentals." But you can assign almost any value to the latter, and this means that for periods of time, fundamentals need not matter.
"There are a number of things that you're absolutely meant to speculate in," continued the same CIO. "It's just that the universe of these opportunities is rather narrow relative to what people think it is."
Paying a lot for everything is quite obviously foolish, but that's where we are today. The only truly cheap asset class left is implied volatility. "People should be speculating in venture capital. Which is not to say that you can ignore price and value, but at least with venture capital you have a chance to make a lot of money."