I’ve posted Entry #33 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Market Is Backward-Looking.
Juicy Excerpt: Emotion is not forward-looking. People don’t say “I am thinking that I might lose my job five years from now, so I am filled with fear.” People become fearful when it becomes clear to them that the writing has been on the wall for some time that they might lose their job. Something breaks through their complacency and causes them to experience feelings that they have been pushing aside for some time. For so long as they remain emotional, their focus is on mistakes made in the past. Once they turn their attention to the future, they are becoming rational and thereby overcoming their emotions.