I’ve posted Entry #232 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Four Years of Perfectly Efficient Madness.
Juicy Excerpt: The 126 percent return we saw over those four years was the product of investor emotion. All signs point to this conclusion. There is no rational reason why so much economic growth would be squeezed into such a short time-period. The fact that so many investors rationalize away the case against their favored strategy is just more evidence that Shiller is right, that it is emotion that carries the day in the setting of stock prices. There is nothing more emotional than an investor who denies the presence of emotion in the setting of stock prices!