“If Irrational Exuberance Is a Real Thing, There Were Trillions and Trillions of Dollars of Pretend Money Floating Around in Our Economy in 2008. Naturally, That Was Going to Cause a Collapse Sooner or Later.”

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

“ There were hundreds of thousands of businesses that went under as a result of the 2008 Buy-and-Hold Crisis. Were the owners of those businesses winners?”

They went out of business due to debt and not the stock market.

The people hurt by 5hecmarket were market timers.

We disagree, Anonymous.

If irrational exuberance is a real thing, there were trillions and trillions of dollars of pretend money floating around in our economy in 2008. Naturally, that was going to cause a collapse sooner or later. In September 2008, that collapse happened.

There’s always going to be something else that you can blame for an economic collapse. A guy who was driving a car with no brakes could blame the toll booth for causing him to crash. I think that’s silly. If he had had brakes in the car, he could have handled the toll booth without too much of a problem. And, if we had done something to lessen the irrational exuberance, we could have handled any debt problem that came up. Market timing is the tool that we use to lessen irrational exuberance. So the key to everything is making sure that all investors always practice market timing (price discipline!).

My sincere take.

And my best and warmest wishes to you.

Rob