Set forth below is the text of a comment that I recently posted to another blog entry at this site:
|Is Shiller emotional since he is heavily invested in the market?Shiller certainly has emotions. All humans have emotions.The statement you are referring to is one in which Shiller said that he is currently going with a 50 percent stock allocation. That is certainly on the high side for where things stand today. But it is possible for someone with particular stock-picking skill to do not awful with a 50 percent stock allocation even at today’s prices. I think a 30 percent stock allocation would make more sense today. But I wouldn’t call a 50 percent stock allocation an insanely “heavy” allocation.
That said, you are making a good point in noting that Shiller’s stock allocation does not seem entirely consistent with the things he wrote in his book about how stock investing works. Why don’t you bring the conflict to Shiller’s attention and see if sense can be made of it?
You want to know how stock investing works, don’t you? Why not try to find out what Shiller is thinking? I can speculate. But Shiller knows better than I do what he is thinking. Perhaps he will say something that will help us all come to a better understanding.
The sense I get is that you don’t want to know. Bogle puts forward tons of contradictions in his public statements. None of the Buy-and-Holders ask him about them. It’s the same with Bernstein. It’s the same with Swedroe. Now you are focusing on Shiller. Ask!
And reporters should be asking! Isn’t that the darn job? Don’t we want to know? Don’t we want to work through the puzzles that present themselves to us and learn now to become better investors?
Ask! And don’t accept answers that don’t add up. Ask and then ask again until you have something that makes sense.
I am NOT suggesting that you be rude or that you try to hurt Siller’s feelings or Bogle’s feelings or anyone else’s feelings. Yes, Shiller is emotional, as you suggest. Perhaps he doesn’t see some of his own contradictions. Many of us are blind to our own contradictions. If you point them out to him, he may well enjoy a great learning experience. And he may share that experience with you and with lots of others.
There is never any harm done by asking any of these questions to the people who are far more likely to know the answers than I am. You direct them to me because you hate me and because you want to trip me up. But you should not be spending your time hating people on the internet or trying to trip up people on the internet. You should be spending your time trying to get answers to these questions. And you are more likely to get good answers by asking Shiller than you are by asking me.
I sometimes feel that we are under a spell. The Buy-and-Holders did lots of wonderful things. Then they made one mistake. Then lots of people were hurt by that mistake. And somewhere along the line a wicked witch cast a spell on us that we would never say the words “I” and “Was” and “Wrong.” Instead, we would just let the mistake take us lower and lower and lower until we were totally destroyed.
Shiller is a great guy, as Bogle is a great guy. Ask them your questions! Put them on the hot seat! Don’t take phony baloney explanations for answers. Dig deep. Find out what is really going on.
You are not just helping yourself when you do this. You are helping Shiller and Bogle too. They both want to help people. They both have blind spots. They both need to be put on the hot seat from time to time to do their best work.
That’s my sincere take, in any event.