I’ve posted Entry #12 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Stock Crashes Are Impossible — It’s a Good Thing Too Given How Often They Turn Up!
Juicy Excerpt: Famed Asset Allocation Strategist Paul McCartney explored how emotion swings can evidence themselves in stock price changes in his song “Yesterday.” He explained that: “Why she had to go, I don’t know, she wouldn’t say. I said something wrong…”
McCartney gets it. The young lady in question probably could not herself give a fully logical reason why she one day “had to go.” It’s not something that hit her all at once. She no doubt had been mulling the matter over for some time. But she knew that leaving was a big step. So she pushed those thoughts out of her mind as long as she could. Eventually, though, things reached a point where she could push them out of her mind no longer. At that point she “suddenly” changed her mind.