Valuation-Informed Indexing #485: The Effect of Interest Rates on Stock Valuations Is Exaggerated

I’ve posted Entry #485 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Effect of Interest Rates on Stock Valuations is Exaggerated.

Juicy Excerpt: The idea that interest rates influence stock valuations is just one more in a long list of things that we believe because it makes sense. It DOES make sense. But we know from Shiller’s Nobel-prize-winning research that the stock investing realm is not a realm where logic and rationality and reason prevail. It is a realm where emotion prevails, especially at a time like today, when stock valuations are off the charts. We need to learn to discount beliefs that are the product of our desire to flatter ourselves by portraying ourselves as the reasoning animal.