Hi all my friends and wise investors, 

You may be surprised to hear that valuation does matter. There are numbers of people who believe that we shouldn't invest in individual stocks because it is straight up gambling. To me, even a few of the Great Legend themselves are nothing but more than a lucky gambler. At the right time and at the right place. Lucky? Sure. Smart?  Surer!

We are in a complete agreement regarding the need for simplicity. Sensible. That's what I loved about. You probably heard of the phrase " The majestic of Simplicity'" Simplicity is truly what makes investing special. Any idiots can do it and make it a success. Market timing, which possible, is much harder than many people, including you seem to think it is. If market timing is so easy, then I'm sure most of you wouldn't have missed the spectacular 2009' buying opportunity.

The bottom line is your approach to investing take something that works and that is simple and needlessly complicated. Just took a look at your own performance over the past 5-10 years and compare it with any diligent indexer's performance.

BOTTOM LINE IS VALUATION DOES MATTER.

Buy and hold base on valuation is an emotional roller coaster. One day you're riding high, the next thing is your retirement plan is wiped out. That's not simple. That's panic inducing. For a strategy to work long term, it has to take human emotions into account. Ignore human emotions and you will make the thing 10 times more complicated than it needs to be. Investors that are jumping around wildly, are not staying the course a meaningful way.

But if you were making an argument against the short term timing on simplicity grounds,  I would agree strongly. There is no place for it for the average person. Long term timing is not even a tiny bit complicated. You need a few minutes of your time checking the vital fundamental principles once a year and every few years or so, you need to make an allocation to change. 

For the peace of mind, come from that you're knowing your portfolio will never drop more than 20%. That few minute evaluation per year are the best ever few minutes you will ever spend on your investment stuff.

If there are Value-Investor finds Buy and Hold more simple, that's certainly their business. They should go with what sounds good to them. But no desire to market as simple can justify deception on fundamental issues. Investors need to be honest to themselves. They never should have even been any questions about that.

PRICE AFFECTS THE VALUE PROPOSITION.

Simplicity is perfectly simple. The reason why people are being stubborn about it is their pride is hurt. If those who believe in Research Base strategies had warned people about dangers of high valuation back when valuations first went to insanely dangerous levels, there won't be any major economic crisis at all. We will all be 50 times better off.

People don't find it difficult and complicated to consider when they buy a car or a shoe or a banana. There is no reason why they should find it complicated to consider the price when buying stocks either.

By understanding the importance of VALUATION and Buy and Hold simplicity, by pricing the endeavor to buy stocks when they are quoted below their fair value and hold them. Sell them when they rise above what they worth. 

The factor is a valuation level that applies when the stock is purchase is made. If you look at valuation when you're setting  your stock allocation, you are a good investor. That one factor is 80% of the game. Do that and you can't lose. Failed to do that and you can't win.

All investors that do not take consideration about valuation and yet appear to be doing well, just got lucky. But only for a TIME! To buy stocks at a high valuation and then do well means ending up on owning not just over-priced stocks but insanely over-valued stocks.

Luck doesn't matter in the long term, what matters long term is whether you pay attention to price discipline when setting your allocation or not. 

IT IS THEREFORE POSSIBLE TO KNOW MARKETS ARE OVERVALUE?

It is easy in an intellectual sense the coming Great Depression will cause hardship to millions of medium class people. The big question remains, however. Why we are not acknowledging the obvious cause of the event? Why do we pretend ourselves, it is another unrelatively inconsequential matter that is the causes?

What is important is invest effectively as long as valuation is not out of hand. It is to every investor benefit to learn the real issues of investing, especially you're a young generation investor.

Avoid stocks that price value are insanely high because bankers are greedy, politicians are venal, regulators are blind and accountant is ignorant. 

Invest wisely. ~~


P/s: if given a chance for you to choose between great and lucky, which one will it be your choice?