“A CAPE Value of 34 Is Always a Very Shaky Thing. Let People Tell the Truth About What the Peer-Reviewed Research Says and That CAPE Value Collapses. So There Need To Be Very, Very Tight Restrictions on Posting re the Peer-Reviewed Research. Keeping the Fantasy Going Is Hard Work. That’s Where You Goons Enter the Picture.”

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

The vast majority of investors are not following buy and hold. The majority of stock, however, is held by the top 10% and those are the real buy and holders. They have significant liquidity and can snap up cheap shares every time a market timer gets cold feet.

Your explanation doesn’t hold water.

The CAPE value is set by the entire population of investors. You don’t get a CAPE value of 34 without a whole lot of Buy-and-Holders entering the mix.

Common sense tells you that it is a bad idea to price stocks at two times their real value. How do you persuade millions of people to ignore their common sense? You tell them that you have a funny feeling that there might be an alternative universe 50 billions light years away in which everything works the opposite of how it has always worked on good old Planet Earth and so this might be the first time in history in which someone achieves long-term success in stock investing without engaging in valuation-based market timing.

Today’s CAPE value reveals the current popularity of Get Rich Quick/Buy-and-Hold thinking. A CAPE value of 34 doesn’t just pop into existence for no reason. I mean, come on.

But a CAPE value of 34 is always a very shaky thing. Let people tell the truth about what the peer-reviewed research says and that CAPE value collapses. So there need to be very, very tight restrictions on posting re the peer-reviewed research. Keeping the fantasy going is hard work. That’s where you Goons enter the picture.

Not this boy, you know? I am good with how things are done in every other field of human endeavor.

Rob