I’ve posted Podcast #139 to the “RobCasts” section of the site. It’s called Only Valuations Matter — Everything Else Is Priced In.
Say that you knew there was a terrorist attack coming. Would it be a good idea to lower your stock allocation? It would depend on the valuation level. At high valuation levels, a terrorist attack would cause a big price drop. At moderate valuations, it might not or the price drop might not be so steep. At low valuation levels, it might cause a small price increase.