“The Market Would Find the Proper Equilibrium. That’s What We Should All Want to See Happen. Let the Market Work.”

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

“You’re the one who doesn’t understand, Evidence. You are assuming rationality on the part of investors.”

I am simply following the logic of what you are advocating. You stated “Permitting honest posting re the peer-reviewed research at every site would permit investors to become more rational than they are today.”

If that happened, and investors became “more rational than they are today” then they would look at the low volatility, high return stocks that would be available in your theoretical world and attempt to buy as much as they could (which would be the rational thing to do)

Of course the very act of doing that would drive up the price and lower the return.

The market would find the proper equilibrium. That’s what we should all want to see happen. Let the market work.

Banning honest posting re the peer-reviewed research is a bad idea. A profoundly bad idea. That’s my sincere take.

We know what we know. We obviously know more after the publication of Shiller’s Nobel-prize-winning research than we knew before publication of that research. We should all feel 100 percent free to talk about the amazing and far-reaching how-to implications of that research.

Rob