Set forth below is the text of a comment that I recently put to the Joe Taxpayer blog:
There are those who swear by gold. I think it’s an ancient relic (only for the fact that Milton Freedman used those words, else, I’d just think it a pretty metal.) There are day traders. I think that’s a losing proposition. It goes on.
There are no Bans in effect on discussion of those other subjects, are there?
What is so different about the 32 years of peer-reviewed academic research showing that Buy-and-Hold is the purest and most dangerous investing strategy ever concocted by the human mind?
I think the difference is that the Buy-and-Holders say that the research SUPPORTS them. That’s their marketing gimmick. They push a Get Rich Quick scheme because we all have a weakness for Get Rich Quick schemes and so that is where the easy money is. But their particular Get Rich Quick scheme is adopted by millions more middle-class people because those people have been told that there is some mystical, magical research somewhere supporting it. Ask to see the URL for the research and they threaten to kill your loved ones. Academic researchers have spent a lot of time trying to identify this magical, mystical research that we hear about so often and no one have ever been able to put his or her finger on it.
I have a funny feeling that the mystical, magical research doesn’t exist. Ssshh! We’re not supposed to say that out loud. It’s sort of rude given how many people are making a buck off this thing, you know?
It’s a marketing gimmick.
Two types of people get very angry when this is pointed out.
The people making a buck off the marketing gimmick (my friends in Northeast Philadelphia where I grew up refer to this sort of thing as a “lie” — it’s a technical term) don’t want to have to climb down off The Big Money Train.
And the people who were taken by the lie are ashamed that they fell for such an obvious untruth and thus cannot bear to look at the actual research and data.
Here’s my question –
What happens when the millions of people who were tricked lose their life savings and then learn that the curious idea that it is not necessary to consider price when buying stocks was a lie all along?
Do you think we might experience a wee bit of political unrest in these here United States when that one gets out?
Yeah, I think so too.
That’s one of the reasons why I think it is important that we all do everything possible to get the word out BEFORE the next price crash, when it might be possible for responsible people to calm the population down by referring to things like cognitive dissonance.
I have a funny feeling that my cognitive dissonance story is not going to go over so well when I try to use it in the midst of a Second Great Depression.
The Buy-and-Holders think of me as Public Enemy #1. My own take is that I am the best friend that any of them ever had by a country mile but they are too blinded by shame and embarrassment over things they did long before I ever came on the scene to acknowledge it.
Rob
Rob,
I am here to say I am wrong. I have put all my “eggs” in one basket that is known as the smelly garbage buy and hold strategy. I only have $2 million dollars. Please tell me how I can invest this money so that my kids don’t go hungry and that we don’t risk having to live in a van down by the river.
Just tell me what to do. How do I invest? Should I call up the New York Times? Do I need to call up my friend Jack and tell him to start working with you?
Yes, you should call up your friend Jack, Easter.
Please do tell him to work with me. But please don’t tell him to work only with me.
Tell Jack to work with Bill and Larry and Rick and Scott and Wade and Bob and the other Rob and lots and lots and lots of others.
Please tell Jack to work with the younger and more honest Jack!
Jack is the one who taught me that Reversion to the Mean is an “Iron Law” of stock investing and that thus the Old School SWR numbers could not be anywhere near the mark. Jack is the one who taught me to use the peer-reviewed academic research as my guide to formation of my investing strategies. Jack played a big role in teaching me that Buy-and-Hold is a big pile of smelly garbage.
Please tell Jack to listen to Jack. He’s a smart guy. He’s a good guy. He’s a hard-working guy. He’s a hero to millions of middle-class investors. We need his input.
We need the old, honest version of Jack back! We need to bury this phony, imposter version 30 feet in the ground where he can do no further harm to humans and other living things (including the real Jack!).
Is all of that fair enough?
Rob
Okay. I called up my good friend Jack (Jack Rabbit). He is willing to work with you.
I look forward to hearing from the fellow with the big ears, Easter.
I wish you lots of lettuce.
Rob
Rob,
You forgot to tell me how to invest my $2 million. I want to be rich like you. What do I do. Since it is a given fact that the market will drop by 65%, should I short the market?
I don’t want to end up with egg on my face, so help me invest this money so that I can be as rich as you.
You should not short the market. That would be a terrible mistake. There is 49 years of peer-reviewed academic research showing that short-term timing doesn’t work.
The most important thing you need to do is to get over the emotionalism that comes through in ever word of your post. Your defensiveness and your anger and your jealousy and your hate are all interfering with your ability to think these issues through clearly. Emotionalism hurts you.
You say that it is a “given fact” that the market will drop by 65 percent. That’s a goonish way to put it. The way I put it is that there is 33 years of peer-reviewed academic research showing that stock prices will fall by about 65 percent sometime over the next year or two or three. Is that not an important thing for investors to be keeping in mind when they set their stock allocations? It sure seems to me that it is. I don’t know if I would say that a finding supported by 33 years of peer-reviewed academic research is a “given fact.” I am certain that it is an important consideration that should be kept in mind by all investors.
I would stop worrying about being “rich like me.” My wealth shouldn’t concern you. You should be trying to invest as effectively as you possibly can, no better and no worse. Do you see how your emotionalism is hurting you in this particular areas as well as in many others?
I think you would benefit from hearing LOTS of people, both ordinary investors and hot shot “experts,” posting honestly on scores of investing-related topics. You need to hear what Bogle honestly believes. You need to hear what Bernstein honestly believes. You need to hear what Shiller honestly believes. You need to hear what Arnott honestly believes. You need to hear what Swedroe honestly believes. You need to hear what Burns honestly believes. You need to hear what Pfau honestly believes. You need to hear what Ferri honestly believes.
And you know what else, Easter? You need to hear what Easter honestly believes. You need to work up the courage to give voice to the doubts about Buy-and-Hold that you have been carrying around in your head for a long time now. Those doubts have been making you go crazy. You need to let out the poison. You need to come to terms with those doubts. You need to ask questions of all sorts of people so that you can determine for the first time whether the strategies you have been following really make sense or whether they were all just based on marketing slogans that sounded great during the most out-of-control bull market in U.S. history but that are not holding up so well to scrutiny now that we are on the downward slope of the Get Rich Quick mountain that has been killing investor dreams since the first market opened for business.
I hope that helps a bit, my excessively emotional friend.
Rob
Haven’t you been predicting that a 65% drop is 3 years out for more than 3 years?
No.
I’ve been predicting that we would fall to a P/E10 of 8 for a long time. That’s because there has never been a secular bear market that came to an end with a P/E10 value of more than 8.
But I didn’t put a three-year limit on it until recently. The drop to 8 has been dragged out for a long time (presumably because we started at 44 and it takes longer to fall from 44 to 8 than it does to fall from 25 to 8). You Goons asked if there was a point at which I would say that the prediction had failed. I felt that that was a fair question, so I tried to assign a latest-possible-date to the prediction of a fall to a P/E10 of 8. I picked the end of 2016 since that is 8 years out from when we saw the first leg of the drop. Eight years seems like a lot of time for a drop to complete itself to me.
I hope that helps a bit, Laugh.
Rob
Well I, for one, will remain in the market. Chances of a crash the likes of which you are predicting are quite low. There will be a correction, eventually, but that’s just a buying opportunity much like the mega crash of 2008/09 was. What will it take for you to jump back into the market, Rob?
Hmmmmm……that timeframe seems to be a problem for you Rob. Jack is getting up there in years. Is there enough time for your stock crash prediction to come true, followed by Jack’s “I was wrong” speech and then your world tour with Jack fixing the entire world economy. Just how is this whole fantasy suppose to work? Jack is not a spring chicken anymore.
What will it take for you to jump back into the market, Rob?
You know the answer to this one, Anonymous.
I focus on the long-term value proposition. When the long-term value proposition of stocks exceeds the long-term value propositions of the alternatives available to me, it makes sense in my mind to invest in stocks.
Rob
Chances of a crash the likes of which you are predicting are quite low.
I don’t hate you for believing that, Anonymous.
I obviously don’t share your view. But I still think of you as a friend.
Maybe you will be the one proven right in the end. That could happen. None of us knows for certain.
I certainly will be rooting for you (while also rooting for me!)
Rob
Jack is not a spring chicken anymore.
He’s not.
I respect and admire and love Jack. I rank him second on my all-time list of the best investment advisors. There obviously would be no Valuation-Informed Indexing had Jack not first built the foundation for it. It would be a thrill to work with him getting things back on track. And I very much want him to see his ideas brought to fruition. So I hope he lives long enough to see that.
If he doesn’t, maybe he will see it from heaven, you know? John Walter Russell once said that he thought these things would work out better than any of us could imagine. I detected the ring of truth to what he said. So I think we may see some twists and turns that none of us are anticipating today.
I will always consider myself a Boglehead. I will always value Jack’s many important contributions. All of that is already written in the book and so there is nothing that can happen from this point forward to change it.
If he dies before he gets to see all the wonderful stuff play out, that would make me sad. But my thought is is that, when things like that happen, there is some reason that we are not able to comprehend immediately. Maybe we figure it out a few years down the line. Maybe we figure it out when we get to the other side
How it plays out is out of my control. I try to focus on doing the right thing for Jack and for all my other Buy-and-Hold friends and for my Valuation-Informed Indexing friends and for the millions of middle-class investors and leave it at that. If I do my part, I have to believe that things will end up in a good place.
I think that Jack has made some horrible mistakes. But I also believe that there is a part of him that very much wants to do the right thing and I believe that we will see that part of him before he dies. I cannot guaranty it. But it is my belief (certainly my hope!) that we will hear some important words from him before he dies. We’ll see.
Rob
Rob,
If you keep your powder dry ’til 2016, I don’t think you’ll have much powder left, will you?
I have enough powder left to go about 12 million years, Anonymous.
That’s why I often put forward that comment that I have not been willing to post dishonestly on safe withdrawal rates for 12 years and that I will not be willing to do so for 12 million years.
After 12 million years have passed, I could see a situation developing where I might run out of powder. In that case, I would have to give consideration to the idea of selling out my fellow community members and the millions of middle-class investors. We must always keep the practicalities in mind, no?
I hope that helps a wee bit, my Goon friend.
Rob
Based on your answer, I don’t think you understand what ‘powder’ is in this context Rob. Of course, you have always shown a deaf ear for analogies and comparisons, even (especially?) those you create yourself. So I’ll be so plain as to eliminate all confusion:
Rob, ‘powder’ here is money, plain and simple.
Not some subtle allusion to gunpowder (i.e. not a death threat) or baby powder or cocaine.
Money. Filthy Lucre. Hard cash. Wampum. Mean Green. Lettuce. Greenbacks.
You know; the stuff that unfortunately, is REQUIRED to support a wife and two children, and a house, car, taxes, and other trappings of modern life.
And I reiterate that I think you’ll be broke (‘Again’? Or is it ‘still’?) come 2016, unless you happen to have even more family members ready to kick off, in order to fund your shiftless ways for a few more years.
Care to explain why not, given your original nest egg, and your self admitted withdrawal rates? Because your [rapidly dwindling!] money ain’t been makin’ no money for quite some time, based on your own claims as to it’s allocation.
I understood what you meant by “powder,” Anonymous.
I got it a long, long time ago, many years ago. Obviously.
My intent is to continue posting honestly on safe withdrawal rates and on many other critically important investment-related topics.
If you think that you can deplete me of my powder reserves, then I guess that’s what you think. Time will tell the tale, no? We’ll all just have to wait and see and compare notes on the other side.
In any event, I certainly wish you the best of luck with whatever investing strategies you elect to pursue, my long-time abusive posting friend.
Rob
Rob
It is pretty clear that you do not have the courage to follow your convictions. During the financial crisis of 2008, the PE10 ratio dropped to levels that you had previously stated were a good value and that you would invest in stocks. Yet you did nothing. I believe you said you didn’t believe in doing things quickly. Quickly!?!?! The financial markets were a complete mess for more than a year, yet you couldn’t bring yourself to invest when your own method was sending strong buy signals.
How do you expect anyone to take you and your *ahem* investing approach seriously when you don’t follow it yourself?
Admit it, this all about you seeking some sort of glory and acclaim and not at all about errors in withdrawal rate studies or investing strategies.
I don’t believe in following “signals,” whether they are to buy or to sell. The idea of following “signals” relates to short-term timing. There is now 49 years of peer-reviewed academic research showing that short-term timing doesn’t work. That’s 16 more years than the 33 years of research showing that long-term timing always works and is always required. Not this boy.
The lowest P/E10 value we saw was “13.” Stocks offer an outstanding long-term value proposition when the P/E10 is 13. That’s certainly so and I was sure to point that out in the RobCasts that I recorded at that time. There are scores of them in which I started out the RobCast by noting the strong long-term value proposition.
I also noted in a good number of those RobCasts the other side of the story. The P/E10 value always falls to 8 or lower at the bottom of a secular bear market. There has never yet been a single exception in the 140 years of stock-market history available to us. So investors who bought at 16 or 15 or 14 or 13 were taking a chance that a returns sequence would pop up that would lower their portfolio values by 50 percent or so. That’s a serious hit. Shiller said at the time that he would advise against investing in stocks until the P/E10 value went at least below 10.
I recorded a RobCast saying that, while I understood where Shiller was coming from, I did not personally agree with him 100 percent. 13 is a good buy so long as you know what you are doing. You might see a 50 percent drop. But the research shows that you will be making that money back and then some if you hold for at least 10 years. So I advised people to buy cautiously. I stand by that recommendation today. I think that made perfect sense.
One did need to act quickly to take advantage of that “13” P/E10 level. I am not going to check how long that was available. But I know that it was only available for a short time, certainly not anything close to a year. I talked to my wife about buying some stocks at that time and, before we were able to have a follow-up discussion, the P/E10 had started rising again.
There’s risk in seeing a 50 percent price drop. There’s a good argument for taking on that risk when the P/E10 value is 13. But there is also a very strong argument for holding off. The P/E10 always drops to 8 or lower following a bull market. And it always stays at those low levels for a good number of years. Depending on the returns sequence that pops up, you can do a lot better waiting until we see the drop below 10 and only then getting into stocks.
We saw a sequence in which it paid to get into stocks. But the amount of gains people have seen from that are trivial given the size of the price crash that is up ahead. Those who got out when the P/E10 value went to insanely dangerous levels are indeed ahead. But how many of them do you think there are? Those who are so anxious not to “miss out” that they jump in quickly are not the types that possess the self-restrain to get out before they lose their temporary gains in a follow-up crash. I have used the Investor’s Scenario Surfer hundreds of times. I think it would be fair to say that I know a great deal more about how the stock market works than some Goon poster who “defends” Buy-and-Hold strategies to this day.
Please check the historical record and point me to a single time in which an investor did well for himself by rushing a decision. Stocks offered a strong long-term value proposition from 1975 until 1996. There was no need for any rush decisions to take advantage of the value proposition being offered then. Stocks offered a poor long-term value proposition from 1996 through today (with the exception of a few months in early 2009). Again, no need for a rush decision. Rush decisions are for Get Rich Quickers. There has never been any need for rush decisions for those who follow research-based strategies.
I follow Valuation-Informed Indexing. Valuation-Informed Indexing never posits that there is a single strategy that is required for every investor. We argue that investors MUST follow strategies that make sense for them and that investors MUST consider emotional realities when making allocation decisions and that there is NEVER a need to make a rush decision. It is salesmen who argue that we will “miss out” if we do not make a rush decision. When a salesmen tells me that I need to sign on the dotted line today or else miss out on the wonderful deal he is bringing me, I tell him to take a hike. The truly good stuff stays around for more than a few days or a few weeks or a few months.
I wish wish you well, Trebor.
Rob
Admit it, this all about you seeking some sort of glory and acclaim and not at all about errors in withdrawal rate studies or investing strategies.
I expect to be one of the richest people in the United States when this is over, Trebor. I also expect to be one of the most applauded. I have taken Buy-and-Hold and corrected the one big mistake in it to make it a workable strategy in the real world. That’s no small thing. That changes history. That helps millions of middle-class people.
It also helps all of my Buy-and-Hold friends. Bogle has shown on many occasions that he would like to come clean and begin posting honestly about stock investing once again. So has Bernstein. So has Burns. So has Swedroe. So has Pfau, So have lots of others. All of those people will see their dream come true when I win my battle to open the entire internet up to honest posting on safe withdrawal rates and scores of other critically important investment-related topics.
It’s not just Wade Pfau who would like to be doing honest research today. Ravick Sethie at Columbia wants to do honest research. And I think it would be fair to say that there are thousands of others. I have e-mailed close to 30,000 academics about the threats made against Wade Pfau. I can count the number of negative responses I received on one hand. I received SCORES of positive responses. The fellow at George Washington University told me that he will be adding a discussion of Valuation-Informed Indexing to his course next year (giving me and Wade credit for the work we did developing the concept). I had a number of others tell me that they are anxiously awaiting the day when they will be able to come clean and feel safe publishing honest research once again.
The Buy-and-Hold Mafia has degraded a lot of good people with their intimidation tactics. All that comes to an end once we have one major site recognize the right of one person (me!) to post honestly on one subject (SWRs). We have seen going back to the first day of our discussions that there is a HUGE demand for honest work on investing now that Buy-and-Hold has caused a fourth economic crisis. The millions who want to learn the realities are going to see their dream come true in days to come.
And, yes, I will have been the person with primary responsibility for making that happen. Because I cared too much about my fellow community members to agree to post dishonestly re the numbers that they use to plan their retirements. I apologize for nothing (except perhaps for not working up the courage to speak up sooner). I am happy to accept all the glory and money that is coming my way. I earned it. And that’s how our system works. We give glory and money to people responsible for huge advances that benefit us all because we want to see more of those advances. It’s a win/win/win/win/win.
I have from the first day invited others to win their share of the glory and the money. I told Greaney that I would be happy to work with him to determine the true safe withdrawal rate. He would have the most popular investing site on the internet today if he had taken advantage of that kind offer rather than engaging in behavior that will be putting him and a good number of his pals in a prison cell for a long time to come following the next price crash. Did his jealousy pay off for him? It did not. It never does.
Bogle is in the same position. He will be ten times as popular as he has ever been when he comes clean and gets back to the business of helping middle-class investors instead of filling up their minds with the smelly Buy-and-Hold garbage that he continues to promote so recklessly and so ruthlessly and so relentlessly to this day. And of course the same is true of all my blogger friends. Those who go honest will be the ones who will win all the applause following the next crash while those who continue pushing the smelly Buy-and-Hold garbage will spend the rest of their days in courtrooms. What fun! Please count me out. No can do.
I want everyone who advocates Valuation-Informed Indexing to win mountains of glory and mountains of money. Why? Because people respond to incentives. We are in an economic crisis because the Buy-and-Hold Mafia has seen to it that the only people who can work in this field are those who are dishonest enough to pretend that the last 33 years of peer-reviewed academic research doesn’t exist.
It exists.
And there now exists a fellow who refuses to pretend that it doesn’t exist no matter how brutal the intimidation tactics of the Buy-and-Hold Mafia.
Hit me with you best shot, Trebor. I will win. The glory. The money. And the feeling of satisfaction that comes from knowing that I truly EARNED that glory and money, that I truly helped millions of middle-class investors rather than exploiting their weakness for the latest Get Rich Quick scheme to come down the pike.
Buy-and-Hold is the past. Valuation-Informed Indexing is the future. The good guys win on the last page of this little saga. I know. I took a peak before I put up that fateful post of the morning of May 13, 2002.
My best and warmest wishes to you, my long-time Goon friend.
Your jealousy is eating you alive. Please fix.
Rob
You Goons asked if there was a point at which I would say that the prediction had failed. I felt that that was a fair question, so I tried to assign a latest-possible-date to the prediction of a fall to a P/E10 of 8. I picked the end of 2016 since that is 8 years out from when we saw the first leg of the drop. Eight years seems like a lot of time for a drop to complete itself to me.
The archives say otherwise.
You wrote here, “[I]f we do not see a crash by the end of 2015, that would be grounds to question this VII stuff. I think that is fair. We cannot say when it will come but there are lots of reasons to believe that it should come by the end of 2015. If it doesn’t, that would suggest that we are missing a big piece of the puzzle and I think it would be fair for my critics to point that out.”
It’s time to stop moving the goal posts and be honest with yourself.
Thank for providing a link to the Post Archives, Pesky.
I’m being safer today by saying that it could take until the end of 2016.
But I don’t think that it would be unreasonable to say that there are grounds to question VII if we do not see a crash before the end of 2015. The first leg of the crash came in late 2008. If we go to the end of 2015, that’s 7 years. That’s a long time to go to see the second leg of a crash. So I don’t have a problem with the point you are making here.
I’m not God, Pesky. I don’t have a crystal ball. I’ve been wrong before and it could be that it is happening again. If it were, I would probably be the last to know.
That said, I am going to continue posting honestly. If the P/E10 value does not drop to 8 before the end of this secular bear market, it would be the first time in U.S. history that that happened.
I wish you all good things.
Rob
You call it being safer. Most people would call it moving the goalposts.
I am going to continue posting honestly.
Always check the Pesky Post Archives first. You don’t want to contradict something you wrote before.
In the words of Judge Judy (who stole it from Mark Twain) …
I don’t have a problem with you calling it “moving the goalposts,” Pesky. I think that’s a fair characterization.
I did not recall giving the “end of 2015” cut-off. You’re helping us all out by pointing out that I said that at an earlier time. It’s called “keeping me honest.” It’s not even a tiny bit Goonish for you to do that. It’s good stuff.
I do wish that you would point out when your side moves the goalposts. Prior to the 2008 crash, you Goons said there would be no crash. Then we saw one. You said that we would never again see a P/E10 value below 20. Then we went below 20. You said that I should get peer-reviewed research showing the superiority of VII. I did that and then you threatened the guy who did the research with me. You guys have been moving the goalposts on a daily basis for 12 years now.
I’m going with 2016 today. You’ve shown that I said 2015 at an earlier time and I can see why I said it. But I’m not going to go with the same number today when we are already five years down the road. I will acknowledge having once said that it should happen by the end of 2015. I have no problem with people knowing that I said that. It’s the truth.
I’d like to hear what other people think on the question. What does Bogle think the cut-off should be? What does Shiller think? What does Arnott think? What does Pfau think?
We all need to know the realities. We all have our retirement money at risk. We all should want to know the realities. We all should want to know what all these people think.
You Goons don’t want to know. You just want to never have to acknowledge having made a mistake. That’s emotion. That hurts you.
I am not God. I am not the only person who can venture an opinion on this matter. Why don’t you ask Bogle and Pfau and Arnott and Shiller? Because you don’t want to know the realities. You don’t want to learn. You just want to shout down the fellow who quotes the findings of the last 33 years of academic research at you.
What if we see the crash this year or next year? Will you say it was a good thing that investors were kept in the dark as to what the last 33 years of research says? You have doubts yourself or you wouldn’t be so defensive.
I’m not responsible for any losses that people suffer because they followed a VII strategy. Because I have said from the first day that I could be wrong. You Goons ARE responsible for any losses that people suffer as a result of your 12-year cover-up. You made use of death threats and unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs.
I am not at risk of going to prison for financial fraud. You Goons are. So I think it would be fair to say that I am miles and miles and miles ahead of any of you re this stuff.
As for when the crash comes, we are just going to have to wait and see. I say that it should come before the end of 2016 and I acknowledge that I once said that it should come before the end of 2015.
I hope that helps a bit.
Rob
Always check the Pesky Post Archives first. You don’t want to contradict something you wrote before.
I cannot check the hundreds of thousands of posts in the Post Archives every time I put forward a new comment.
If you Goons wanted to learn, there would be no problem. We would all have our say and we would all learn together.
You don’t want to learn, you want to intimidate.
That’s why you’re going to prison following the next crash and I am not.
And that’s why I want nothing to do with the Goon tactics. I want to be known all over the internet as the strongest voice speaking in opposition to the tactics employed by Mel Lindauer and John Greaney alive today.
I wish you well.
Rob
So if the “price crash” doesn’t occur by 2016 will just push out your prediction to 2017? 2018?
That’s the hardest question that you could ask me, Trebor.
It’s possible that I would push the prediction forward. But I would also feel bound to tell people that I had at an earlier time given a date that had passed and that I said that if the crash did not take place by that date it was a sign that there’s something wrong with VII.
I cannot go back to Buy-and-Hold. I believe in research-based strategies and there is 33 years of peer-reviewed research showing that Buy-and-Hold can never work for a single investor. So going back to Buy-and-Hold is out of the question for me.
There are no other research-based strategies. It’s just VII and BH and in the hypothetical you are describing there would be grounds for having grave doubts re both of them. That’s a hard spot to be in.
I would take it as a sign that we need to learn more about how stock investing works. I would hope that other people would get involved in the discussions and perhaps we would come up with a third research-based approach. But it is very hard for me to imagine today what that new approach might be.
We have to accept the realities. If we get to a place where no research-based approach works anymore, then we have to acknowledge that that’s where things stand and try to move forward to a better place. That’s general-sounding language. But it’s the best I can offer you.
One of the reasons why I think the Buy-and-Holders have been so dogmatic is that this is not an area where we can put ideas forward and tell people “here, try this out and see how it goes.” If we get this stuff wrong, the consequences are horrible. I think the Buy-and-Holders really believed in their model at one time and felt a need to push it hard and were not able to just put it out for comment because people must invest their money today, they cannot just say “Oh, I’ll wait until it is more clear what really works.”
You have to take sides in this field. That’s true of the Buy-and-Holders and that’s true of the Valuation-Informed Indexers. It makes me feel sympathy for the Buy-and-Holders when I reflect on this point. I think it is one of the drivers of the strangeness.
Anyway, I don’t really know what I would do. I can see pushing the prediction further out for lack of any good way to respond to the hypothetical event you describe. But I would want to tell people that the earlier predictions failed so that they could take that into consideration when forming an assessment whether it made sense for them to go with a VII strategy or not.
Do you think that makes at least some sense?
Rob
“Do you think that makes at least some sense?”
No.
Okay, Anonymous.
I think it would be fair to say that that response reveals why you are in the situation you are in today.
I wish you all good things.
Rob