I'm straining to find credibility in your hypothetical example
Yes, that's because there is no real-world credibility to the hypothetical, because the factual predicates required for the hypothetical to occur do not exist in the real world. BGC, if it existed, would clearly be worth $1M. In the real world, the public stock markets are efficient enough to communicate to the marketplace the relevant facts that would lead any rational person to conclude that BGC is worth $1M, and the market is made up of actors not irrational enough to pay more than that. So BGC's market cap would never rise above $1M.
But the point of the hypothetical was to illustrate that we can't necessarily use market value as a proxy for intrinsic value (even though, as you pointed out, market value is always equal to itself, as a tautological truth). Or, said differently,
it is possible for the market to be overvalued (or undervalued). Earlier, you said "I find it hard to assail the notion that a price is somehow 'wrong' if there is both a buyer and a seller ready to meet it right now." My hypothetical was intended to assail that notion -- if a buyer and a seller stood ready to sell $1M for $10M, would you still find it hard to believe that that price is somehow "wrong"? Your answer, I think, is "no, but in the real world no one would pay $10M for $1M," but that's only because of the intentional extremity of the hypothetical. It clearly demonstrates that it is
theoretically possible for market value and intrinsic value to diverge. And it does happen in reality as well, in less extreme ways (though sometimes not even that much less extreme) -- Buffett has described how he used to regularly pick up a "discarded cigar butt" of company, which was trading for less than the saleable value of its assets. Cases like that similarly assail your notion that a market price can't be "wrong."
Now, the more efficient the market, and the more rational its participants, the lower the chances that such mismatches will exist between market value and intrinsic value. Your original point, I think, was that today's stock market is efficient enough and the investing public rational enough to enable us to conclude that market value essentially
is intrinsic value (or at least
necessarily (in the logical sense) equals intrinsic value). The distinction may be subtle, but I disagree with this -- instead, I think today's stock market is efficient enough and the investing public rational enough to cause market value to align with intrinsic value so closely that they are effectively always equal in practice, but they are different things capable of deviating from one another. Moreover, while I believe that is true with respect to the stock market as a whole, I also believe there are individual components of the market (like individual companies) where market value and intrinsic value do deviate (in practice, not just in theory), and investors like Warren Buffett are able to exploit that.
And as the raging thread about dual momentum investing has demonstrated, lots of rational people can make seemingly irrational decisions. Those folks are selling low and buying high, purposely amplifying random market movements and contributing to crashes and bubbles, but they're not irrational or under informed.
I agree, and maybe we're both being too imprecise in our use of terms like "rational." In your original post that started us down this path, you said the following:
In what possible world does it make sense for a personal electronic device manufacturer with second rate market share to be worth more than the total combined values of the world's largest single retailer, the world's largest food seller and the world's largest integrated conglomerate combined, with enough left over to pay cash for the largest US auto maker? None, that's what. There are no worlds in which that objectively makes sense.
But the market isn't logical, it's a popularity contest and right now Apple is popular. All kinds of very smart people will give you very good reasons why it makes sense, and everyone believes it, and that makes it true.
Which sounds to me like you're saying people can be irrational.
So maybe we really have no disagreement beyond semantics.