I’ve posted Entry #281 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Twelve Claims Made in Irrational Exuberance That Should Be Explored in Book-Length Examinations — Part One.
Juicy Excerpt: “It is a serious mistake for public figures to acquiesce in the stock market valuations we have seen recently, to remain silent about the implications of such high valuations, and to leave all commentary to the market analysts…. The valuation of the stock market is an important national — indeed international — issue. All of our plans for the future, as individuals and as a society, hinge on our perceived wealth, and plans can be thrown into disarray if much of that wealth evaporates tomorrow.” (Page 204)
If millions of retirements fail, we will be facing the biggest social catastrophe in our nation’s history. We all need to know whether it is the Fama model (Buy-and-Hold) or the Shiller model (Valuation-Informed Indexing) that gets it right.