I’ve posted Entry #616 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Investors Never Possess Full Confidence in Irrational Exuberance.
Juicy Excerpt: Why don’t investors just let high stock prices remain in place? We like the feeling of getting something for nothing or else there never would be out-of-control prices in the first place. So why give it up? What makes us want to see irrational exuberance disappear?
It’s that we never entirely believe in it in the first place. We want to believe in it. We want prices to be higher than what is justified by the economic realities. We like that feeling of getting something for nothing. But we don’t truly believe. Our Get Rich Quick impulse is not the only thing that drives us. We also have a common sense impulse within us. No matter how high stock prices go, it never goes away.
feed twitter twitter facebook