Valuation-Informed Indexing #486: The Hill-and-Valley Return Pattern Explains High Stock Valuations

I’ve posted Entry #486 to my weekly Valuation-Informed Indexing columns at the Value Walk site. It’s called The Hill-and-Valley Return Pattern Explains High Stock Valuations.

Juicy Excerpt: But the point that I would like to advance today is that it may not be necessary to offer any particular explanation at all for the investor irrationality that produces high stock prices. The core point of Shiller’s research is that stock investing is a highly emotional endeavor. People who are acting emotionally are often unreliable narrators. We certainly like to think that there are reasons for our behavior when we are acting emotionally. But as often as not we possess only a dim understanding of our true motivations.