“Adding Market Timing/Price Discipline to the Mix Permits Investors to Employ Rationality When Buying Stocks. Rationality Is a Weighing of Pros and Cons. It’s the Consideration of Stock Prices (Market Timing) That Permits a Weighing of the Pros and Cons of Buying Stocks.”

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

So, in the last 20 years, all you have done is point out something that is not really an error (despite you ignoring what everyone has said) and that is it.  It takes you 20 years to keep repeating the same one-liner.  Really?  That is all you have managed to do?

Valuations matter. That’s it. That’s the entire story, Anonymous.

It’s a very, very, very, very important story.

Adding market timing/price discipline to the mix permits investors to employ rationality when buying stocks. Rationality is a weighing of pros and cons. It’s the consideration of stock prices (market timing) that permits a weighing of the pros and cons of buying stocks. Take that element out of it and you can fool yourself into believing that stocks always offer the same value` proposition. That’s how you get bull markets and then bear markets and then economic crises and then political unrest.

Valuations matter. Rationality matters. Market timing matters.

That’s it. That’s a lot.

Rob