I’ve posted Entry #503 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Once the CAPE Value Drops Below 16, How Long Will It Remain There?
Juicy Excerpt: So I ask myself: “If that can happen on the high side, can it not happen on the low side too?” I don’t deny my bias. I believe that valuations matter. I believe that high prices are irrational prices. The longer high prices remain in effect, the less I trust the market to behave rationally. So I wonder whether we will next see a long string of years with CAPE values lower than 16. Can you imagine where we would be after nearly 30 years of below-fair-value stock prices?
Anonymous says
“ I don’t deny my bias.”
Yes, you do.
Rob says
No, I don’t.
I think that I am right. If I didn’t think that I was right, I would not say what I say.
But of course the funny thing about bias is that it is often the case that a person is not aware of his own bias and the effect that it has on his thinking. A bias can blind a person. And that blindness can extend to the existence of the bias itself.
I certainly possess a bias. I hope that it does not influence my thinking re these matters to any great degree. But, if it did, there’s a good chance that I would not be aware of that. This is one of those darn paradoxes of human existence.
My best wishes to you.
Rob