I’ve posted Entry #167 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Mathematics of Investing Is Overpowering — and Hated!
Juicy Excerpt: One of the slides quotes Former Financial Analysts Journal Editor Rob Arnott as saying something to the effect that it is easy to determine what stock returns are going to be if you know simple math and that it is amazing that there are so many smart people working in this field who do not seem capable of performing that simple math.
He’s making a point not too far removed from the point made by my blogger friend. Arnott is saying that there is no intellectual problem here — we could all know far more about how stock investing works he we cared to. We just don’t care to!
Because it causes us emotional pain to do the math he talks about.
If you want to be popular in this field, you hit fewer home runs. People don’t want to see you offer the best investing advice possible. That would be too “overpowering” to take. They want you to play dumb.