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 is a strong correlation between the CAPE value that applies today and the return that will apply for the next 10 years and the next 15 years and the next 20 years.”
It didn’t work like you said it would for the last 10 years, the last 15 years or the last 20 years and you stayed out of the market to your detriment.
If prices crash at some point (I believe that they will), it will have worked as I said it would. Price crashes hurt us. When stock prices crash, trillions of dollars of consumer spending power disappear from the economy and the economy contracts. Irrational exuberance hurts us all. We should all do everything we can to oppose it. We should all be engaging in market timing and encouraging all of our friends and neighbors and co-workers to engage in market timing as well.
Does all of that not make perfect sense?
Rob
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