Successful bidders for objects whose true value is unknown routinely turn out to have paid too much: they won because they were the most optimistic. When there are few publicly held shares in small companies whose success or failure is hard to predict, these shares are more likely to be held by people who overestimate their value than by people who underestimate it. Most such investments fail, but the losses might, though need not, be offset by occasional spectacular gains. The market value of a security is often a poor guide to the value likely to be created in the business over the long run.