I’ve posted Entry #607 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called During a Price Crash, It Helps to Know How Far Prices Will Fall.

Juicy Excerpt: The 2008 experience is the first time in which the end of a bull/bear cycle did not bring the CAPE value all the way down to 8. Something like that may happen again someday. But given that we have only seen that scenario play out one time in U.S. stock market history, it should certainly be viewed as a long-shot possibility.

I’ve posted Entry #606 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called It’s Not Just Getting the Safe Withdrawal Rate Studies Corrected, We Need to Come to Terms With Why It Took So Long to Do So.

Juicy Excerpt: The analytical failure that is at the root of the analysis that produced the rule is that, if a retirement using that withdrawal rate survived even though it began at a time when valuations were off the charts, that withdrawal rate is retroactively rendered “safe.” That makes no sense to me.

I’ve posted Entry #605 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Today’s CAPE Value Is a National Scandal.

Juicy Excerpt: When it’s hurricane season, there are hysterical reports on all of the television stations warning people who live in the areas likely to be hit to evacuate immediately. We don’t just watch the hurricanes work their destruction without making an effort to protect the people in their path. But isn’t that what we do with stock price crashes? We know what causes them – high stock prices. But we encourage people to continue buying stocks even when prices are already at frighteningly high levels. There are no news reports urging investors likely to see their lives blown to pieces to “Get Out Now!”

I’ve posted Entry #604 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Efficient Market Theory Is an Ivory Tower Concoction.

Juicy Excerpt: I am living proof that not all information has been available to stock investors in recent years. I have been banned from numerous investing discussion boards and blogs. I have never once violated a posting rule. I am banned because I suggest that mispricing should be taken seriously and that investors are hurting themselves by permitting prices to get so out of control.

I don’t mean to suggest that the banning of my posts alone is such a big deal. But I have seen other people making similar points banned many times. And on many occasions I have seen people who have doubts about price indifferent strategies engage in self-censorship to avoid the embarrassment and banning that is visited on those who have doubts about Buy-and-Hold strategies and give free expression to those doubts.

Prices would certainly not be at the same levels if those who believe that market timing is required expressed those thoughts at every internet site. Those arguments obviously would not persuade all investors. But it is equally obvious that they would persuade some. And that would bring prices down. It seems inarguable to me that, if even one person has been banned from an internet discussion board because he advocated market timing at times of high stock prices that not all relevant information is available to stock investors. So the market is not today efficient.

I’ve posted Entry #603 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Is Stock Investing Gambling?

Juicy Excerpt: I remember my parents having a conversation at the breakfast table when I was eight years old. My mother claimed that stock investing was a form of gambling because you can gain money or lose money and you never know in advance which it is going to be. My father strongly disagreed. He said that investors are buying shares in real companies when they purchase stocks and that the fortunes of the companies are determined by economic realities. Today I believe that both of them were accurately describing a significant part of the stock investing experience.

I’ve posted Entry #602 to the weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The First Step to Getting Better at Stock Investing Is Wanting to Get Better.

Juicy Excerpt: The primary emotion that most people have about stock investing is a defensive one. They don’t want to mess up. That makes people want to follow the crowd. One investor said it to me quite bluntly. I argued that, if Shiller is right that irrational exuberance always disappears into the wind in time, things look bad for stock investors when stock prices are as high as they are today. He didn’t argue with me that prices are not high or that the irrational exuberance will not disappear into the wind in time. But he showed no willingness to lower his high stock allocation. He said that, if stock prices crashed, he would be in the same boat as millions of others and he could live with that.

I’ve posted Entry #601 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Logic Produces Gradual Change, Emotion Produces Rapid Change.

Juicy Excerpt: I believe that the reason why we ignore the obvious (to me, at least) realities of stock investing is that they scare us. Stock investing is a serious subject. Knowing the true size of our stock portfolio is important. Accepting that it is investor emotions that are the primary determinant of stock prices is deeply unsettling. So we pretend that this is not so. We pretend that the numbers on our stock portfolio statement are real and reflect something of lasting significance.

I’ve posted Entry #600 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Investment Issues That We Cannot Talk About Are the Investment Issues That We Most Need to Talk About.

Juicy Excerpt: When we develop a strong aversion to looking at something, there is a reason. Often the reason is that it is very important that we look at the thing that we do not want to look at.

I’ve posted Entry #599 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called What Is the Meaning of the Word “Overvaluation”?

Juicy Excerpt: If the word “overvaluation” means what it appears to mean, the entire Buy-and-Hold Model is rooted in error. In fact, the entire Modern Portfolio Theory on which the Buy-and-Hold Model is based is rooted in error. The Modern Portfolio Theory posits that investors are rational and that stocks are thus always properly priced. If that’s so, then the existence of any overvaluation shows that the theory does not hold water. You can have overvaluation or you can have market efficiency. You can’t have both.

I’ve posted Entry #598 to my weekly  Valuation-Informed Indexing column at the Value Walk site. It’s called Valuation-Informed Investing Strategies Are an Exercise in Time Travel.

Juicy Excerpt: The portfolio statement number controls today. But Shiller’s research reflects how the market has been working since the day it was founded. Irrational exuberance doesn’t last. It’s not the portfolio statement number that controls tomorrow. It’s the portfolio statement number reduced by the amount of irrational exuberance present in the stock market price that controls tomorrow. Believing that valuations matter is an exercise in time travel.