The biggest casualty of the postponed initial public offering for We Co., parent of the office-sharing business WeWork, isn’t the company or its bankers. It’s the myth that private markets are superior to public markets.

Investors have long been told that the stars of the financial universe are hedge fund, venture capital and private equity managers. These supposedly visionary geniuses are said to be immune to the short-term thinking that poisons the public markets. Investment horizons should be longer, risks lower, returns...