I’ve posted Entry #183 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called What Others Around You Believe About Investing Affects What You Believe About Investing.
Juicy Excerpt: At the close of the third day of discussions, I put forward a post saying that I now saw that I was wrong and apologizing for the trouble I had caused. My views on safe withdrawal rates have since been confirmed by some of the biggest names in the field. So I am often asked today what the story was with that crazy apology. Did I really believe that I was mistaken? Was I pretending? Or lying? What the heck was going on?
I still have good recall of the confused thoughts that were jumping around in my brain that night. I was confident that the studies were in error. It just isn’t possible that a study that doesn’t include a valuation adjustment could get the numbers right given that we know that valuations affect long-term returns. But logic wasn’t all that was in my head. There were lots of people whom I liked and respected who were very, very, very sure that the studies were just fine and that I was the one who was in the wrong. When you hear numerous people saying the same thing, it gives you pause.