Are Markets really smart, or do they just behave like 2 year olds?

Reading this piece about bubbles (Talking bubbles with Jeremy Grantham)got me thinking about the effectiveness of markets. In economics there is this idea of the “market is always right” or the “invisible hand of the market”. But considering the last 30 years (and I will admit that is a rather short timeframe), one could think the market really only bounces between fantasy and the real-world. One could think that the market, driven by greed, really is only interested in a bubble like growth until reality catches up with the market, the bubble bursts, and then all of this starts again. All that said, it looks less like a smart market to me, but rather like a 2 year old who goes crazy until they are brought back to reality by their parents, and then they will start again. One driver for this erratic, greed driven behavior could be the amount of easy money that is floating around, that is driving stupid decisions (in a way the SoftBank fund investments are a good example of “too much money” chasing any type of investment, no matter how stupid).