Unmentionables

Scott Burns puts forward tantalizing hints but doesn’t dare to tell the full story.

William Bernstein took a chance by stating it pretty darn clearly one time and is not inclined to take a bigger one by stating it pretty darn clearly a second time.

John Bogle says enough to permit those who want to know the realities figure them out for themselves, but holds back enough to permit those who do not to remain in the temporary comfort of the darkness.

Jonathan Clements knows enough to see that there is a big story out there, but elects to spend his time pursuing less controversial topics.

I mentioned in yesterday’s blog entry that: “We don’t want it shoved in our faces just how bad things have gotten, just how irresponsible we have been in bidding up stock prices to such absurd levels in recent years.”

It’s a big story that as of yet has not been widely reported. I don’t mean the fact that stocks are overvalued. That’s been written about some. I mean how upset it makes people to think about it, and how much anger some experience when they hear it discussed in a clear and direct and understandable and undeniable way.

The conventional thinking on stocks is that stock investing is primarily a rational endeavor. I challenge anyone to devote 15 minutes to reading the transcript of The Great Safe Withdrawal Rate Debate and to continue to maintain afterwards that stock investing is primarily a rational endeavor. The debate transcript shows that stock investing is primarily an emotional endeavor. I mean, come on.

What are we going to do about it?

I propose that we learn more about it.

Learning that stock investing is primarily an emotional endeavor changes everything. It compels a different starting point for the analysis of every possible investing question. Change all of the starting points, and you change all of the end points.

It would not be overstating things all that much to say that everything we thought we knew five years ago about investing has turned out to be at least a little bit wrong. We’ve got some challenging work ahead of us. Some exciting opportunities to make the world a better place now appear before us too.

Burns, Bernstein, Bogle and Clements are four of the best. Each of them has played a role in the development of the insights we have generated during The Great Safe Withdrawal Rate Debate. Thanks, guys!

Each of them has pulled back from exploring in depth those insights on his own. Way to drop the ball, guys!

I have hopes that we are not going to drop the ball. I have hopes that we are going to hold onto the ball for a run all the way into the end zone.

If it were easy to tell the full truth about stock investing, Burns, Bernstein. Bogle and Clements would have already done it. It’s not easy. We’re going to do it anyway. That’s why we set up this community in the first place, is it not? That’s the job we have taken on, is it not?

The first step is to figure out why Burns, Bernstein, Bogle and Clements have shied away from the task. What are they afraid is going to happen if they tell it straight, with no chaser?

My sense is that they are afraid that telling the stock investing story straight and full and true would make make their readers angry at them. It’s one thing to talk about how stocks work. It’s a very different thing to talk about how people work, especially when part of the story that needs to be told relates to how people sometimes mess up.

People got us to the P/E10 level that we are at today. Isn’t it just like those darn humans to do something like that? Look into a problem deeply enough, and it always seems to turn out that it’s the humans who are at the center of the mess-up!

The humans messed up in a big way. That’s the big Unmentionable in the field of investing analysis today. The human factors are the Unmentionables because it’s humans who buy the newspapers and attend the speeches and subscribe to the newsletters and all that sort of thing.

We all want our fellow humans to like us, and, if we start telling them that they messed up, they might not. So many of the best investing analysts have elected not to say too much about it and to be less than clear and direct in what little they do say.

We need to be charitable. We need to be balanced. We need to be diplomatic. We need to tell the story, though. We need to mention the Unmentionables. It’s an important part of the investing story. The story as a whole does not make sense unless this aspect of it is addressed in some depth.

You might want to click on your seat-belt. It promises to be a rocky ride. We’re going to be doing some truth-telling around this place in the days and weeks and months and years to come.

Our mission, if we elect to accept it (and we have so elected) is — To tell the part of the stock investing story that Burns and Bernstein and Bogle and Clements have never quite possessed the courage to tell.

Wish me — I mean us! — luck!

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