VII #88 — Taking Valuations Into Account When Setting Your Stock Allocation Reduces Risk by 80 Percent

I’ve posted Entry #88 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Taking Valuations Into Account When Setting Your Stock Allocation Reduces Risk by 80 Percent.

Juicy Excerpt: Actually, I think the full reality is a little better than that. If you buy stocks because the P/E10 value predicts a strong long-term return (or avoid stocks because the P/E10 value predicts a poor long-term return), you are concerned only with mispredictions in a downward direction (or in an upward direction). So in most cases only half of the unknown aspect of stock returns can do you harm. That is, only half of the unknown aspect of stock returns represents risk in a practical sense. So long-term returns are only 19 percent unknown for Valuation-Informed Indexers. Those who make the shift thereby reduce the risk of investing in stocks by roughly 80 percent.

Comments

  1. kimber says

    How did you calculate the r2 value? Is the correlation statistically significant and how did you test that? How was the line fitted?

  2. kimber says

    By the way, I did try going to the original source you cited (Early Retirement Insights), but could find only the chart with no explanation. If the methods of calculation are given there, could you tell me exactly where?

  3. Drip Guy says

    Rob, it appears you were right to question using a 50% loss figure for estimating your own risk tolerance.

    It appears new research puts that number at more like 43.4%; when using all historical data, Monte Carlo simulation, and applying the latest fat tails analysis methods.
    (link to article)

    Funny how since you claim EMH is so very very dead, that the assumptions it forces are still actually applied within the preferred methods that actual finance managers chose to use to actually determine what to actually do with their own actual funds.

    Guess it’s hard for some people (but not you!) to quit that allegedly dead horse, when the horse is still somehow saddled up, stomping around, and actually carrying your actual cargo ever closer to the actual destination!

    http://www.fa-mag.com/component/content/article/10459.html?issue=189&magazineID=1&Itemid=73

  4. Rob says

    If the methods of calculation are given there, could you tell me exactly where?

    I cannot, Kimber.

    I believe that you will be able to figure out everything John did if you understand statistics and spend some time with it. I don’t have the statistical background needed to be able to do this.

    For a long time John make all his workpapers available on a Yahoo Briefcase. Unfortunately, that service went under and the briefcase is no longer available.

    I have been arguing for 10 years now that we should open the internet to honest posting on SWRs and many other important topics. Once we do that, the problem is solved. We will have every expert in the field commenting on John’s work. That’s what we need to move forward.

    I can tell you that there are a good number of Goon posters (including you!) who have been hoping for 10 years now to find some flaw in John’s work and no one has ever come up with anything. That’s impressive testimony.

    But I do favor opening the internet to honest posting on these questions. No one of us is perfect and that includes John. If he did make any mistakes, we need to know about them And, of course we also need to be sure that he gets the recognition he merits for all the wonderful research he did to benefit all of us.

    Take care, Goon friend.

    Rob

  5. Rob says

    It appears new research puts that number at more like 43.4%; when using all historical data, Monte Carlo simulation, and applying the latest fat tails analysis methods.

    I haven’t looked at the link.

    What you are saying makes zero sense, Drip Guy. How could the greatest loss be 43 percent when we already have a case on the record in which stocks suffered a nominal price drop of 89 percent and a real price drop of 80 percent?

    Rob

  6. Rob says

    Funny how since you claim EMH is so very very dead, that the assumptions it forces are still actually applied within the preferred methods that actual finance managers chose to use to actually determine what to actually do with their own actual funds.

    It’s not funny, Drip Guy. It’s sad. This is why we are in an economic crisis.

    You use the phrase “actual finance managers” as if these people knew more than the people who use common sense as their guide. They do not. If they knew more, they would be confident in their beliefs and would be open to questioning of them. If they were open to questioning, there would be no ban on honest posting. I mean, come on.

    There’s one point you make here that I believe does carry some weight. You note that the “actual finance managers” themselves follow the advice they offer to others. I believe that is so in the vast majority of cases, perhaps in every single case. This is not a case where people are fooling others while investing intelligently themselves. This is a case where people are first fooling themselves and then fooling others.

    Is it hard to accept that people who are so intelligent could do such a thing.? It is until you think about it a bit.

    Do you know of any highly intelligent people who smoke? Who overeat? Who gamble excessively? Who get mixed up in bad relationships?

    The people who came up with the Efficient Market Hypothesis are as smart as the day is long. This is beyond dispute. The fact remains that they are humans and are subject to all the human emotions. This is a case in which they let their human emotions dominate their intellects. The name given to this phenomenon in the psychological literature is “Cognitive dissonance.”

    It’s a real thing, Drip Guy.

    Rob

  7. Rob says

    Guess it’s hard for some people (but not you!) to quit that allegedly dead horse

    I understand that your intent is sarcastic here, Drip Guy. But the reality (in my assessment!) is that you are hitting here on an important truth.

    It is very, very, very, very hard for people to quit the dead horse.

    These people are in emotional pain.

    This has been proven beyond any reasonable doubt whatsoever.

    People tend to go to two extremes. Some say that there is nothing wrong with continuing to advocate Buy-and-Hold 30 years after it was discredited by the academic research. Others go 100 percent cynical and suggest that the experts in this field push Buy-and-Hold solely as a money-making thing. No!

    Money considerations do play a role here. It would be naive to pretend otherwise. But it is clear to me that the majority of those who promote Buy-and-Hold sincerely believe in it and follow it themselves. It is possible that every last one does this. We shouldn’t assume bad motives when there is not proof of them. We face a difficult task in persuading the Buy-and-Holders of their mistakes and adding cynicism to the mix just makes the job that much harder.

    The Buy-and-Holders are good and smart people. They started us on a path that in recent years has led us to some amazing and wonderful places. We all owe them our gratitude for the many powerful investing insights they developed.

    Rob

  8. kimber says

    You can’t tell me how the numbers were calculated or even point me to a spot to find this out? That’s quite disturbing.

    Do you think it is ethical to promote an approach to investing that arises from an unknowable source? Would you follow the advice of a doctor who said “Take this medicine. I found it on the shelf of a closed drugstore and I don’t know what’s in it.”

  9. Rob says

    After posting my responses, I went ahead and took a look at the article at the link. I didn’t read the entire thing, but what I read was intelligent stuff. So I see that article as being helpful.

    The author makes the point that stock returns do not fall in a normal distribution. I would like to know whether valuation-adjusted price levels fall in a random distribution. It seems to me that they should. It also seems to me that it would be an easy thing to check this out.

    Do you happen to know the answer?

    Stock returns SHOULD fall in a normal distribution, no?

    For many years, we have just chosen as a society to ignore the important finding that they do not.

    If valuation-adjusted returns DO fall in a normal distribution, does that not solve the riddle?

    I think that all that is going on is that people are treating the nominal price as the real thing and the valuation-adjusted price as the imaginary thing. If you flip it, everything lines up as it should.

    I cannot do the statistical work. But this is what makes sense to me.

    People in this field begin with a bias in favor of investor rationality. No one has ever demonstrated that investors behave rationally, it has just been assumed. What we are seeing with the economic crisis is that this is a DEADLY assumption. If the assumption is wrong (there is now 30 years of academic research showing this to be the case), all of the conventional investing wisdom is not only wrong but DANGEROUS. And it’s dangerous not only for investors but for our entire economic and political systems.

    There has never been a bigger mistake made in the history of personal finance. Drip Guy. This is why I would like to see the internet opened to honest posting. Once we all give ourselves permission to express our sincere views, we can begin working on solutions to the problem. We obviously cannot get to first base on developing solutions until we acknowledge the nature of the problem we are up against.

    Do you know of ANY reason to believe that the nominal stock price is a good indicator of the real value of the market? I do not know of any. I do not think that anything showing that to be the case exists. If you do know of something, I would be grateful to learn about it.

    Rob

  10. kimber says

    How can someone possibly find a flaw in JWR’s work if that work isn’t available to inspect? Your defense seems to be name-calling. I suspect that readers will conclude that this means that you have no real defense.

  11. Rob says

    You can’t tell me how the numbers were calculated or even point me to a spot to find this out? That’s quite disturbing.

    You are disturbed about the wrong things. Kimber.

    John Walter Russell was the most loved poster in the history of the Retire Early and Indexing boards. He worked to help us ten hours per day. seven days per week for eight years. He came up with insights that none of the Big Shots being paid millions to do similar work ever even hinted at. He is the most honest and loving person who has ever posted to our boards.

    You, in contrast, are a Greaney Goon. You have spent the last 10 years of your life relying on death threats and defamation and board bannings to keep people from learning about the errors that Greaney made in his retirement study and to protect him and you from the thousands of lawsuits that will be brought against you when your behavior becomes public knowledge.

    I have zero concern that Russell’s work will stand the test of time. I believe that you and the other long-time Goons will spend most of your remaining days in prison cells.

    You need to re-focus your energies in a more positive direction, my long-time abusive posting friend.

    That’s my sincere take re this important matter.

    Rob

  12. Rob says

    How can someone possibly find a flaw in JWR’s work if that work isn’t available to inspect?

    John is not the only researcher who has done work along these lines, Kimber.

    THere is now 30 years of academic research showing that there is precisely zero chance that a Buy-and-Hold strategy could ever work for any long-term investor. If there were flaws in any of these studies, one of the Buy-and-Holders would have pointed them out a long. long time ago.

    John did his research in public. There were thousands of fine and honest and intelligent people who looked it over and found that it passed every test they could come up with. There is a group of Goon posters who I think it would be fair to say possess zero ethics who have threatened to kill any community member who posts honestly on these questions. And you wonder why I doubt what these people say?

    Integrity matters, Kimber. John Walter Russell had it. You and the other Goons do not. So, yes, I place my trust in his work until I learn of some reason to question it.

    No Buy-and-Holder has ever put forward a single study supporting their highly counter-intutive claims that it is not necessary for investors to lower their stock allocations when prices reach insanely dangerous levels. I asked for a URL at the Bogleheads board. The response I obtained is that the fact that I asked that question made me a “troll.”

    What does that tell you about Buy-and-Hold?

    Rob

  13. Rob says

    Do you think it is ethical to promote an approach to investing that arises from an unknowable source?

    John Walter Russell’s work is supported by common sense, 30 years of academic research and 140 years of historical data.

    Buy-and-Hold is today supported by death threats, defamation and board bannings.

    I think it is ethical to make the case for either model, depending on the circumstances. There are millions of good and smart people who believe in Buy-and-Hold and it is of course 100 percent ethical for them to state their sincere beliefs. But, no, it is not ethical for them to put forward death threats, defamation or board bannings. Nor is it ethical for them to associate with people who do so.

    It is 100 percent ethical for me to demand (not ask!) that the internet be opened to honest posting on what the academic research of the past 30 years says on these questions. This is how such questions are worked out in our society. If there are flaws to the VII approach, we will learn about them through a sincere exchange of views. If there are no flaws, we will learn that. Either outcome is a win/win/win for all concerned.

    The ethical problem is the death threats and the defamation and the board bannings. In every case, it has been the Buy-and-Holders engaging in unethical behavior. I am not able to recall a single case in which a Valuation-Informed Indexer engaged in such behavior.

    Rob

  14. Drip Guy says

    You are quite literally insane. You make up these mythologies, and then state them as if they are facts. No one ever peer reviewed the grumpy pensioners scribblings. Listen to yourself:

    “30 years of academic research” You using that phrase again and again does not make it so, Rob. WHAT DOES THIS MEAN? Provide links, sources, specifics. You can’t, except the gobbledy gook you and the bizarre Civil Service retiree threw back and forth to each other.

    “there is precisely zero chance”
    Rob, you do not have a clue what those WORDS mean to one who is not innumerate layman who works solely on his ‘feelings’ and ‘intuitions’ and ‘spidey sense’. When you hijack them and throw that phrase around again and again, it indicates nothing so much as your own ignorance of what math is about. ‘Precisely’ means something. “Zero” means something. However, as you have applied them, they mean NOTHING.

    ” that a Buy-and-Hold strategy could ever work”

    “Ever.” Again, with the pesky meanings of those pesky words. I suppose you just grab them because they are emotionally exciting to you, or sound particularly emphatic. But they MEAN something Rob. Something that could not and has not ‘ever’ worked means there cannot be a single example in existence, nor could there ever have been. Yet, we have many many retirees, current and past, who were more than happy to use buy -n-hold type principles to manage their nest eggs, quite successfully. I’m one of them.

    “for any long-term investor.” Again with those pesky absolutes. “Any”, “Ever”.

    “If there were flaws in any of these studies, one of the Buy-and-Holders would have pointed them out a long. long time ago.”

    Rob, many people have tried diligently do disabuse you of hundreds if not thousands of your poorly thought-out and completely wrong clap trap ideas, and done so over many conversations, in many forums over many years, and provided you many sets of resources, refutations, examples, data, etc.

    You know that to be the case.

    Yet, you have ultimately labeled almost every one of those people, who were mostly nice, caring, kind, learned, helpful people, many of them working with math, statistics or finance as a living… and the label you have given them is ‘Goon” and you now claim bizarrely that by simply disagreeing with you, they all ought to spend their lives in prison.

    You are insane.

    Authors, professors, professionals, investors, retirees, bloggers, housewives, etc.

    Have you no limit to the well of inane hyperbole that you draw from, Rob?

    To borrow a phrase from way back: “At long last sir, have you no decency left?”

  15. Rob says

    You make up these mythologies, and then state them as if they are facts.

    I read a book, Drip Guy.

    Have you ever read Shiller’s book.

    Have you even made it as far as the subtitle?

    The subtitle describes the book’s premise as representing a “revolutionary” change in our understanding of stock investing.

    You prefer the word “insane” to “revolutionary” because you want to “defend” Buy-and-Hold.

    I don’t think Robert Shiller is insane.

    He’s a Yale Economics professor, Drip Guy.

    Rob

  16. Rob says

    No one ever peer reviewed the grumpy pensioners scribblings.

    The Old School SWR studies were peer-reviewed, Drip Guy.

    And now that everyone agrees that they get the numbers wildly wrong, how many of the people who signed off on the peer reviews have acknowledged their mistake?

    Rob

  17. Drip Guy says

    Actually, it’s the most helpful thing I could possibly say to you Rob. The flavor of investing you or I decide to employ in our individual quests for financial independence is not NEARLY as important as being an emotionally healthy, and mentally stable individual, one who does not appear to be in danger of harming himself or others.

    Rob, I personally think you are crossing some vital lines that keep most people from doing the otherwise unthinkable in society.

    So please, just for a moment, be a simple man, listening to another simple man: forget about blogs, arguments, methods, etc. Think about your wife and your children and the safety of your community.

    I implore you: Get help!

    It’s abundantly clear you need it.

  18. Rob says

    [i]Provide links, sources, specifics. [/i]

    Once we open the internet to honest posting, you will have thousands of people giving you specifics, Drip Guy.

    Wade Pfau would like to give specifics. Bill Bernstein would like to give specifics. Larry Swedrow would like to give specifics. Scott Burns would like to give specifics. John Bogle would like to give specifics.

    Are you willing to give these people some assurances that you will not be organizing Goon Squads to kill their loved ones if they dare to tell you the truth about stock investing?

    That’s the first step, my long-time Goon friend.

    Rob

  19. Drip Guy says

    Rob persisted in his DELUSIONAL THINKING: “now that everyone agrees that they get the numbers wildly wrong”

    No.

    They.

    Don’t.

    Rob, how many times do you have to be told, shown and proven the EXACT same thing, in dozens of different ways, through independent sources, and in as many words as needed — little words, big words; formal words, casual words….

    That what you are claiming with specificity… simply IS….. NOT…. TRUE.

    No one — not one person — other than you claims some “Error” in any particular study, much less all studies, that need to be corrected, with the result of inaction being imminent economic collapse.

    There simply is no ‘there’ there, Rob.

  20. Drip Guy says

    Rob asked: “Are you willing to give these people some assurances that you will not be organizing Goon Squads to kill their loved ones if they dare to tell you the truth about stock investing?

    That’s the first step”

    Sure Rob. I promise.

    Good enough?

    Why not call that number now, okay?

  21. Rob says

    [i]‘Precisely’ means something. “Zero” means something. However, as you have applied them, they mean NOTHING.[/i]

    A logical impossibility has precisely zero chance of coming through for you, Drip Guy.

    The idea that you could do yourself some good by taking deliberate steps to get your stock allocation wrong is a logical impossibility.

    The chance that Buy-and-Hold could work is equal to the chance that someone can invent a perpetual motion machine. The concept defies the laws of physics.

    There was a day when we did not know as much about physics in which we believed that perpetual-motion machines were a live option. Those days are gone. So it is with Buy-and-Hold. There was a day when smart people believed it could work. Those days have passed. They passed 30 years ago, when Shiller published his research.

    It is now just a question of getting the word out and repairing the damage that was done to our economy during the Buy-and-Hold Era.

    Then we all shake hands and live happily ever after. There are no two sides to this, Drip Guy. Every last one of us is on the same side. You are just in too much emotional pain to acknowledge this obvious reality.

    Rob

  22. Drip Guy says

    703.777.0320
    (Emergency Intervention Services, Loudoun County Mental Health)

    703.547.4077
    (Crisis Link Regional Hotline)

  23. Rob says

    Something that could not and has not ‘ever’ worked means there cannot be a single example in existence, nor could there ever have been.

    That’s correct.

    Yet, we have many many retirees, current and past, who were more than happy to use buy -n-hold type principles to manage their nest eggs, quite successfully. I’m one of them.

    Your life isn’t over, Drip Guy.

    No one says that a pure Get RIch QUick approach could not work for a time. That’s the entire appeal of Get RIch Quick.

    What I say is that it can never work in the long-term.

    GRQ never has worked in the long term. It never will. It never can.

    Rob

  24. Rob says

    [i]and the label you have given them is ‘Goon” [/i]

    No.

    Goons are those who have put forward death threats or engaged in defamation or who urged board bannings.

    There are many Buy-and-Holders who have not done this. Those people add an important measure of balance to our discussions. I applaud them and I thank them warmly for their contributions.

    That said, the number of non-Goon Buy-and-Holders who have spoken up in opposition to the Goons is small.

    What does that tell us?

    Rob

  25. Rob says

    “At long last sir, have you no decency left?”

    Got it, Drip Guy.

    I will continue to post honestly re safe withdrawal rates all the same.

    Rob

  26. Rob says

    No one — not one person — other than you claims some “Error” in any particular study

    Good point, Drip Guy.

    Truly outstanding!

    Rob

  27. Drip Guy says

    Rob pretended to preach on topics he knows not, i.e. “Physics”: “The chance that Buy-and-Hold could work is equal to the chance that someone can invent a perpetual motion machine. The concept defies the laws of physics.”

    Rob, there is a terrific old saying. And it applies in spades to trying to deal with you, and it is why so many people “Ask” you so many “questions”. (You pretend that their “asking” is somehow about them wanting to tap your expertise. It is not. Ever. It is about your ‘apartness’ for lack of a friendlier word, and them trying to ‘grok’ your way of thinking!)

    Anyway, the saying is: “Seek first to understand, THEN to be understood.”

    I *think* I *might* understand (see, I’m trying) what causes you to say that, but please (now it’s your turn) please try to understand MY position as to why what you have said cannot be accepted as fact or truth by anyone you speak to — unless you understand their goal — their expectation — their needs, for what they hope to achieve through “buy and hold” (usually to capture the average of market returns — whatever those might be), then you cannot say with such authority that it cannot “work.” The word “work” in that context means “fit for intended use.” IF the ‘intended use’ of buy-n-hold for a retiree is merely to not have to store the money under the mattress, then it DE FACTO ‘worked’ for that person, Rob.

    You hijack terms of art, like ‘defies laws of physics’ when you yourself are clearly unlettered and incompetent in the very fields you draw those words, analogies and phrases from, Rob, and you choose to put them in the most absolutist terms.

    Many people think you do this on purpose, and that is the nature of a ‘troll’ — just to get a response. I used to think that of you.

    Now, though, I’ve come to think it’s much more complex. I think you have some scrambled wiring, maybe a bit of chemical imbalance (note that since I am not a professional, my use of PROVISIONAL terms here, Rob? Take a hint from that!), but the end result is the same — you are off-putting and hostile, and are alienating everyone that you ostensibly are actually trying to so vigorously and vociferously desperately reaching out to make contact with.

    I admit that for a long time, it was an amusing thing to watch, and that’s probably a character failing of mine. Like others watching American Idol. But now it’s turning mostly sad to observe. That’s why I wish you would reach out for some help, Rob. Seriously. I think you know it’s the right thing to do. See what that person thinks about your ideas, and methods. Maybe they will tell you you are on the right track, going about it well. Would that not be a relief? If you are sure you are right, why not do it then, for the support!

  28. Rob says

    unless you understand their goal — their expectation — their needs, for what they hope to achieve through “buy and hold” (usually to capture the average of market returns — whatever those might be)

    That’s a good description of what the typical Buy-and-Holder hopes to achieve with the strategy, Drip Guy. We agree re that much.

    I say that there is zero chance that this hope will be realized.

    Stocks were priced at three times fair value at the top of the bull. Stock prices always fall to one-half fair value in the bear market that follows the bull market caused by promotion of Buy-and-Hold strategies. That means that all Buy-and-Holders will be losing roughly five-sixths of their accumulated life savings.

    No middle-class person can take that kind of hit. We should not be encouraging people to follow strategies that are likely going to cause them to lose five-sixths of their life savings. It is unconscionable.

    I do not have the heart to endorse such a strategy. The rules of every board and blog to which I have posted say that I do not need to violate my personal integrity to post on investing topics. I have a right to post honestly. I expect to see that right respected by those seeking to promote Get Rich Quick strategies. I am not asking. I am demanding.

    I of course demand the same for all my fellow community members. In other areas of life endeavor, it is standard practice for people to express their sincere views. That’s how it should be in discussions of stock investing. The very fact that the Buy-and-Holders feel that their strategy cannot survive unless they engage in death threats and defamation and board bannings tells me that this is not the strategy that I want to be recommending to my friends.

    You need to do something to rein in your hate. That’s an inside job. I am confident that, once you have gotten better control of your emotions, the rest will follow with relative ease. It is the hate stuff that is holding you back. I’m sure!

    Rob

  29. Rob says

    The word “work” in that context means “fit for intended use.” IF the ‘intended use’ of buy-n-hold for a retiree is merely to not have to store the money under the mattress, then it DE FACTO ‘worked’ for that person, Rob.

    No.

    Following a Buy-and-Hold strategy always lowers your long-term risk-adjusted return. That’s not what you want. You want just the opposite. You want to increase your long-term risk-adjusted return.

    Buy-and-Hold is dangerous.

    People need to be warned of the dangers. We need to open the entire internet to honest posting on ALL investing-related topics.

    If we did that, we wouldn’t have to worry about Buy-and-Hold anymore because no one would follow it. There’s no one who WANTS to achieve poor results with his retirement money. We need to permit honesty in this field. That’s the answer. It works in lots of other fields and I am confident it can work here too.

    At least that’s my sincere take re this matter.

    Rob

  30. Rob says

    see, I’m trying

    You’re going to need to try harder, Drip Guy.

    Millions of people have lost their jobs in this economic crisis.

    It’s not a joke.

    Rob

  31. Rob says

    I think you have some scrambled wiring, maybe a bit of chemical imbalance

    It’s called a conscience, Drip Guy.

    It’s not such a rarity in fields other than stock investing.

    This is where money comes into the picture. Money tempts people to ignore their consciences.

    We should be working together to encourage people to follow their consciences, not to penalize them for doing so.

    During the Buy-and-Hold Era, the industry has come to turn everything upside down. We now need to begin a rebuilding effort.

    Anything that we can destroy we can also rebuild. There’s life after Buy-and-Hold.

    Rob

  32. Rob says

    you are off-putting and hostile

    Did you find it off-putting and hostile when I posted the accurate SWR numbers ten years before anyone else in the field?

    If yes, you need to ask yourself why that is so.

    To find it off-putting that someone would report retirement numbers accurately is a highly emotional response.

    Buy-and-Holders are suffering great emotional pain. I get that loud and clear. I am willing to help in any way I possibly can. It is not helping to tell them more lies.

    It is the truth that is healing, Drip Guy. Every bit of life experience I possess tells me that this is so.

    Rob

  33. Rob says

    and are alienating everyone that you ostensibly are actually trying to so vigorously and vociferously desperately reaching out to make contact with.

    People are afraid, Drip Guy.

    The Buy-amd-Holders need to take away the things that are scaring them.

    I have had bloggers tell me that they are afraid that if they post the truth about stock investing at their sites, they will be sued by the multi-millionaires on Wall Street.

    Why not ask Jack Bogle to assure these people that nothing like this will ever happen and that he will step in if he ever hears of such a thing?

    I cannot assure these people today that Bogle will act. I have written Bogle three e-mails asking for his help with the LIndauer matter and he has not responded.

    What does that tell us about Buy-and-Hold?

    Rob

  34. what says

    Dude, drip guy…why do you post here? Clearly you aren’t having any fun. This Rob Bennett critter is way too far gone for anyone to change his mind about…anything. If he believed that up was down he would create a vast conspiracy theory about some group trying to keep that from millions of middle class something or others.

    Rob,

    Who are these bloggers that are ‘scared to post the truth’? I would like to confirm your conspiracy theory.

  35. Rob says

    Who are these bloggers that are ‘scared to post the truth’?

    We are ALL scared to talk honestly about what Buy-and-Hold has done to us, What.

    THere have been thousands of articles written about the economic crisis. How many have pointed out that it was caused by the promotion of Buy-and-Hold Investing?

    It’s not at all hard to show this. It’s numbers. Stocks were overpriced by $12 trillion in 2000. Even John Bogle, the king of Buy-and-Hold, acknowledges that stock prices always return to fair value levels after 10 years or so. There’s your 2008 economic crisis. No economy can withstand the shock of losing $12 trillion in buying power.

    I would like to confirm your conspiracy theory.

    Was there a conspiracy that kept us from knowing that the earth revolves around the sun rather than the other way around?

    Yes and no.

    For a time, it was just ignorance.

    Then some people figured this out. That made some other people very defensive and angry. It put them in great emotional pain.

    That’s what we have here. We all know the reality on some level of consciousness. Some of us are happy to let it in and explore it. Some of us are hurting and striking out at others to stop the knowledge from being discussed and spreading.

    The defensive group (Buy-and-Holders) have never sat around a table and formulated plans together. But they respond in similar ways to honest reports of what the last 30 years of academic research shows. They experience the same pain to hear the realities spoken aloud and they feel the same sense of desperation and they face the same limited range of options.

    We should all care about these people and go about things in as gentle a way as possible. But there is no kindness in keeping quiet and thereby causing them to suffer even more pain.

    Rob

  36. Rob says

    The gold bunny brought it to my house in a basket, Kimber.

    Some people like chocolate. Some people go for the harder, longer-lasting stuff.

    Rob

  37. Rob says

    You remember what the good Sister Mary Margaret told us when we were youngsters, don’t you, Kimber?

    It’s a mystery.

    Rob

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