I’ve posted Entry #346 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Can Two Schools of Thought on How Stock Investing Works Co-Exist?
Juicy Excerpt: It’s not possible that both schools of thought are legitimate in an ultimate sense. They are rooted in opposite premises and they generate opposite strategic conclusions. But as a society we cannot make a switch from Buy-and-Hold to Valuation-Informed Indexing with the flip of a switch. We need to have a transition time-period in which both schools of thought are viewed as at least somewhat legitimate so that they can be compared and contrasted.
For that to happen, we all need to adopt the manner exemplified by Robert Shiller. We need to argue our viewpoints with forcefulness. We learn most quickly when our views are challenged and when other views are presented effectively. But we need at all times to evidence warmth and friendship to those on the other side of the table. We learn best together. We all want the same thing — to invest effectively. We need to see some big-name Buy-and-Holders step forward and ask for more positive interactions between the advocates for the two schools of thought.