Yesterday’s blog entry reported on an e-mail sent by academic research Wade Pfau to me on January 16, 2011. My response is set forth below.
Your last sentence is the amazing thing. I cannot get over this. Shiller’s book was very well received and it has been out for over 10 years. But I have not been able to find anyone who has made a serious effort to explore the practical strategic implications of Shiller’s work. It’s just been sitting there waiting for someone to jump on it.
The subtitle of the paperback version of Shiller’s book is: “The National Bestseller That Revolutionized the Way We Think About the Stock Market.” So it should not be a surprise to anyone that agreement with these ideas leads to the adoption of new strategies.
In fairness, this didn’t hit me either for a long time. I just kept drilling in different areas and then one day it hit me that the common thread was that everything I did was an attempt to identify strategic implications of Shiller’s findings. The reason this is controversial is that no one has done this before. People want to see it approved by experts before they go with it. Somebody needs to go first to get the ball rolling.
I do not have the ability to do research and have no interest in developing that ability. My aim is to be the journalist who tells the story of the shift to the new model and who explains to the typical middle-class investor what the research that
will be done means for him or her. I need to have people do the research so that I can demonstrate to readers that experts have signed off on all this.
It’s an exceedingly odd story. But that’s indeed where things stand, so far as I am able to figure all this out.