I’ve post Entry #2 to the Valuation-Informed Indexing column at the Value Walk site. It’s called What If Everything You Thought You Knew About Stock Investing Turned Out to Be Wrong?
Juicy Excerpt: Web sites and radio shows and newspapers report the Dow and S&P numbers every day. How often do you hear the numbers reported adjusted for the effect of overvaluation? At the time when stocks were priced at three times fair value, the Dow was at about 12,000. Shouldn’t the news reports have been saying that the Dow was temporarily priced at 12,000 but that the true value was 4,000? Wouldn’t that have been the more accurate statement given the level of overvaluation?