Valuation-Informed Indexing #375: Stock Investors Are in the Process of Acquiring Self-Knowledge

I’ve posted Entry #375 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Stock Investors Are in the Process of Acquiring Self-Knowledge.

Juicy Excerpt: While I believe that the Get Rich Quick element of the Buy-and-Hold concept is a big part of its appeal, I don’t think it’s right to say that that is the only factor pushing millions of good and smart people toward a belief in the strategy. Millions believe that Buy-and-Hold is research-based regardless. It’s a very good sign for the future that so many of us long to make use of research to guide our stock investing strategies.

I see the popularity of Buy-and-Hold as a precursor to something very different. I foresee true research-based strategies achieving the dominance that Buy-and-Hold achieved in the days of crazy high prices in the days following the crash that will show us all in stark and scary terms the long-term pitfalls of following Buy-and-Hold strategies.

Today’s stock investors are in the process of developing self-knowledge. We are getting close to the point where we will be able to see how emotional we have become about stock investing just by looking at the P/E10 level and seeing how out of whack we have collectively permitted it to become. We are in the process of learning how to keep our Get Rich Quick impulse in check and for the first time in stock-market history to act in our true self-interest.