I’ve posted Entry #116 to my weekly Valuation-Informed Indexing column at the Value Walk site. it’s called Shiller Does No Fully Appreciate the Most Far-Reaching Implications of His Own Investing Theory.
Juicy Excerpt: I approach this question from a very different starting point. I think it would be fair to say that Shiller is looking at the various economic indicators and making an effort to sort through them and come to some reasonable conclusions. All of his comments sound perfectly reasonable and perfectly conventional. This is what alarms me.
Shiller’s views on how stock investing works are NOT conventional; they are “revolutionary,” according to the subtitle of his book. And, full truth be told, Shiller’s views on how stock investing works are not entirely reasonable either. They are counter-intuitive. They are in many respects UNreasonable. This is why they are so exciting and potentially powerful, in my assessment.