Hi Joanne,

My comment was not about active vs. passive investing, it was about the degree of free-will involved in the different sciences. However, regarding your question about ETFs...hmmmm, I had not seen that data, but would love to see it. It is strong evidence of the irrationality of investors, and in this case, passive investors since they blindly sink money into ETFs. Also, parenthetically, it makes me wonder about the mechanics of how such a thing is possible. In any case, any blind bid for an asset divorced from a sense of the underlying and fundamental value would tend to raise the P/E all other things equal. Said else, if the earnings level is the same but there are more bids for those earnings than previously you would expect the price paid for those earnings to rise. This, in turn, because of how I calculate the equity risk premium, would tend to lower the premium.

Yours, in service,

Jason