Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“ Valuations matter. Rationality matters. Market timing matters.
That’s it. That’s a lot.”
Even though you rarely respond to the questions answer, I still give the courtesy of addressing your point. So, to the above comment, it is RESULTS that matter. This is what pays the bills. Valuation is merely analysis of where you think it might go. It might be higher or it might be lower, so we look at results to know who was right. We can only spend what we currently have. The grocery store doesn’t care about your opinions on Greaney or Shiller or Pfau.
Long-term results are what really matter, not the short-term stuff that you get from creating mountains of irrational exuberance.
I see all the difference in the world between economic-growth gains and irrational exuberance gains. I say that we should count only economic growth gains when forming our retirement plans. Counting the irrational exubernce stuff is likely to lead to a disaster down the road a bit.
That’s my sincere take, Anonymous.
Rob
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