Despite risks that I fully expect to devolve into a roughly -65 % loss in the S&P 500 over the completion of the current market cycle, it's absolutely critical to distinguish the long - term effects of valuation from the shorter - term effects speculative pressure. (hussmanfunds.com)
I believe that the primary reason why the Shiller - based model for understanding how stock investing works (Valuation - Informed Indexing) has not become dominant in the 35 years since publication of his research is that the the huge effect of the valuations factor is a highly counter-intuitive reality. (valuewalk.com)
While long - term and full - cycle market outcomes are tightly determined by market valuations, the effect of valuations on outcomes over shorter segments of the market cycle depends on the psychological preference of investors toward speculation or risk aversion. (hussmanfunds.com)