I’ve posted Entry #187 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Do Women Understand Investing Better Than Men?
Juicy Excerpt: It might be that we shouldn’t even refer to “valuations.” Whenever we talk about valuations, what we are really talking about is investor emotions. Why do you think it is that most in this field would rather we talk about high P/E10 values and low P/E10 values rather than fear and greed and hope and love and shame and guilt, the emotions that cause P/E10 values to head upward or downward? It’s because most of the people working in this field are men! They don’t want to hear about that yucky emotional stuff. Turn it into a number or don’t come to the table! We crunch numbers here! We’re men!
That’s why the opportunity for advancement is so great. We’ve been tuning out discussions of investing emotions for decades without knowing that we were doing it. Men often do not even speak the same language as women. They kinda, sorta get the idea being advanced. But they don’t feel comfortable engaging over emotional stuff. They patronize people making points that very much need to be seriously considered.
Shiller himself is guilty of this. I laugh when I re-read his book because he tries so hard to reduce everything to numbers. He is always taking surveys to prove his points and looking at data and research and graphics and all this sort of thing. I understand why. He has noted that most in this field treat those who venture into the emotional realm as “unprofessional.”