Valuation-Informed Indexing #613: Stock Prices Are More Predictable in the Long Term Because Rationality Comes to Play a Bigger Role

I’ve posted Entry #613 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Stock Prices Are More Predictable in the Long Term Because Rationality Comes to Play a Bigger Role.

Juicy Excerpt: The weird thing about Robert Shiller’s Nobel-prize-winning research showing that valuations affect long-term stock returns is that stock prices become predictable only after the passage of ten years or so. You would think that it would be easier to predict what is going to happen a month out or two months out or three months out. But it is only distant return predictions that work. What’s up with that?