“Opening Every Site to Honest Posting re the Peer-Reviewed Research Will Solve the Problem. Investing Will Become a More Rational Endeavor. So Prices Will Correct Quickly.”

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

“I have put forward general time frames in which I said I believed the price crash would come. Those predictions did indeed fail. Those predictions were based on what has happened in the historical record. In recent history, prices have remained high longer than than they did at any earlier time in history. We are in uncharted waters. No one could have anticipated that.”

And did you learn anything from the failure of these predictions that weren’t really predictions?

I learned that we need to stress that the guessing game approach to market timing doesn’t work. I didn’t believe that it worked on the morning of May 13, 2002. I feel stronger re that point today.

We need to ask WHY short-term timing doesn’t work. It doesn’t work because stock investing is such an emotional endeavor. When prices are too high, they SHOULD be lower. But investors don’t care what they should be. Investors WANT prices ton be high. So they push them up even when there is no economic justification to do so.

Opening every site to honest posting re the peer-reviewed research will solve the problem. Investing will become a more rational endeavor. So prices will correct quickly. Investors will be encouraged to act in their self-interest. Prices will never again get so out of hand. So there will never again be such resistance to valuation-based market timing. All of these issues are connected.

Rob