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Alan Greenspan phrased it as “irrational exuberance”.

Also, most Americans’ tax advantaged retirement accounts (via 401Ks) are locked in with consistent contributions to diversified index funds or ETFs containing primarily large market cap companies that make up a majority of the stock market.

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There is certainly a bias towards long positions due to these dynamics, but wouldn’t you expect this to be at least reflected in derivative markets? The way I understand it is, if there was such a simple correlation, someone smarter and more equipped than me would already be betting on it at enough scale for the information to be integrated into prices.

If you can reliably make accurate predictions, then why on earth would you be talking about it instead of making the correspond bet via some combination of securities?

Some of those people are. Buffet is sitting on $325B in cash for example.

https://www.cnbc.com/2024/12/22/buffett-heads-into-2025-with...

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