I’ve had extensive e-mail correspondence and one long telephone conversation with a community members named “Larry” about the need for us to get political leaders involved in speeding up the transition from Buy-and-Hold to Valuation-Informed Indexing. I will be setting forth the text of some of those e-mails here at the blog in days to come.
Set forth below is the text of an e-mail that Larry sent me on November 2, 2009, after a long telephone call on which we conversed about these matters in depth. Larry spent several weeks going over all the materials at my site and at John Walter Russell’s site prior to the telephone call.
Thanks for talking with me on the phone.
I get how big this really is after talking with you yesterday. I think the P/E 10 is an incredible risk management tool that large institutional investors, actuaries, economic forecasters, individual investors, mutual fund managers, and financial planners should all use. Risk management is the one area that the people in these professions understand. The P/E 10 tool has the ability to drastically change how the entire investment industry operates and measures risk.
However, I still believe you need to include the qualitative analysis to back up the numbers in this tool to gain credibility. In my view, overcoming this “last missing link” will take the P/E 10 into the mainstream of the investing world. I could not sleep last night because I believe this tool combined with quality macro economic analysis will change the course of investing in this country.
I am working on a conceptual model of how to take this mainstream. I also think that venture capitalist or angel funding is a very real possibility to fund a business that will promote this tool to the masses. I am more than happy to contact key venture capitalists and even Mr. Perot himself if we can package this properly.
Mr. Perot does not have any money in the market (or very little) presumably because of the risk involved. He has invested in bonds for many years. Suzy Orman takes the same approach as Mr. Perot. Almost all of her personal money is in bonds due to the risk in the market. There is a reason why banks don’t loan money to invest in the stock market!