Valuation-Informed Indexing #506: Buy-and-Hold Is a Product of the Enlightenment

I have posted Entry #506 to my weekly Valuation-Informed Indexing column at the Value Walk site. It is called Buy-and-Hold Is a Product of the Enlightenment.

Juicy Excerpt: Those two premises seem highly dubious to me. I know with certainty that investors do not have easy access to the information they need. I know this because my examinations of the implications of Shiller’s research are banned at numerous investing sites even though many investors have praised them effusively when they have been able to gain access to them. Buy-and-Holders do not want people to hear challenges to their strategy. And Buy-and-Hold is the dominant strategy today. So Buy-and-Holders have been able to silence challenges to the strategy just about everywhere and everytime that they appear. Most investors have heard the case for Buy-and-Hold but not the case against it. They do not have access to the information they need to make sound choices.

Are investors rational? Robert Shiller obviously does not think so. He titled his book “Irrational Exuberance.” It follows that he does not believe that the Modern Portfolio Theory is valid (although I have never heard him make this precise claim).