I’ve posted Entry #624 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Will There Come a Time When Short-Term Timing Will Work?
Juicy Excerpt: Prices finally come down when the magnetic pull toward the fair-value price level becomes strong enough to overcome the strength of the collective Get Rich Quick urge. For a short-term timing strategy to work, someone would have to develop a means of predicting when that turning point would be achieved. It cannot be done today. We do not know enough about human psychology to identify the turning point in advance.
Here is a title for your new book:
“How to lose your money, wife and house by pushing timing schemes”.
That’s not the title that I am going to use, Anonymous.
But I do open the book by talking about the divorce. The price that people pay for telling the truth about stock investing is a big part of the story. If we were all thinking clearly, we would all be doing everything in our power to spread the word about Shiller’s research as far as we could and as fast as we could. Doing so would benefit each and every one of us.
Why don’t we do it? Because, when it comes to stock investing, we are not rational. We LIKE irratioanl exuberance. We LIKE bull markets. We LIKE Buy-and-Hold. So we end up with a CAPE value of 29 and all that follows from it.
Can we change?
I believe we can change. But it won’t happen until everyone who believes that Shiller’s Nobel-prize-winning research is legitimate research feels 100 percent comfortable posting honesly at every discussion board and blog on the internet.
The market isn’t efficient today. Not with that CAPE value. But it could be a lot closer to efficiient tomorrow if we all worked on it together.
My sincere take.
Rob
You already admitted that your wife wanted you to knock off the B.S. and get a job. You refused, so she divorced you. The record is already out there.
Okay, Anonymous.
Please take good care.
Rob