I have posted Entry #514 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called If There Were No Market Timing, There Would Be No Stock Price Changes.
Juicy Excerpt: Timing is the means by which participants in the market adjust to change. A new source of oil is discovered and lots of market participants are affected. Prices are lowered, sales increase, workers are hired, some companies gain market share and other companies lose market share. Do we call it “timing” when a company elects to lower its reliance on electricity and increase its reliance on oil because oil prices have fallen? I have never heard that term used to describe that sort of decision. But that’s what it is, isn’t it? Isn’t the company that elects to use more oil in those circumstances doing the same thing as an investor who buys more stocks when the CAPE value drops?
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