Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Boy Rob, you were having a couple of moments of clarity yesterday with talking about others view points. Alas this morning you fell back into full tilt hocomania. At least I think you did. Lord knows I’m not going to read beyond the first sentence. You need help, as I’m sure your family, neighbors, and everyone you interact with can see.
You Goons have a catch phrase that you use on me from time to time: “It’s not what you say, it’s how you say it.”
The Buy-and-Holders don’t mind people saying that they follow other strategies so long as they don’t point out the dangers of Buy-and-Hold. We all have a Get Rich Quick impulse within us. So, as long as the Buy-and-Holders are not called out on the fact that their claim that there is research supporting the idea of not exercising price discipline when buying stocks is false, their marketing pitch is unstoppable. Everybody is drawn to Get Rich Quick strategies and the Buy-and-Holders tell them that there is actually research supporting them. That’s one heck of a marketing message!
I want nothing to do with it. We are working at cross-purposes, Anonymous.
I have zero problem showing respect and affection for Buy-and-Holders. They have offered us many powerful insights. There wouldn’t be any Valuation-Informed Indexing today had Buy-and-Hold not come first. And of course there are millions of good and smart people who today believe in Buy-and-Hold. I was one of them myself for a long time. So it’s hard to imagine how I could be unsympathetic to the Buy-and-Holders or could try to silence them or anything along those lines.
But, no, I do not for two seconds want to see us as a society remain stuck with all the Buy-and-Hold garbage. We moved forward intellectually 33 years ago. Valuation-Informed Indexing is so far superior to Buy-and-Hold that it is a joke. When we permit honest posting on the last 33 years of research, we reduce risk dramatically while increasing returns dramatically. My job is to help us make that transition. My job is to take us out of the Buy-and-Hold dark ages and into a world in which millions of middle-class investors have available to them the first true research-based strategy, one that actually works in the real world.
Talking about other viewpoints is fine. But my aim is to see that we all achieve that transition from Buy-and-Hold to Valuation-Informed Indexing. ALL of my work is aimed at achieving that goal. Anyone who has somehow gotten the idea that I believe that there is some mystical, magical world in which Buy-and-Hold might produce good results for one or two long-term investors has somehow gotten the wrong idea. I want to see Buy-and-Hold fixed so that it can work in the real world. Valuation-Informed Indexing is Buy-and-Hold with the Get Rich Quick element removed.
That’s where I am coming from, in any event, Anonymous.
Other viewpoints — 100 percent A-OK.
Rob Bennett endorsing Buy-and-Hold — Never going to happen.
All of our problems today are rooted in the tentative way that those who have doubts about Buy-and-Hold express themselves. This is truly dangerous stuff. It has caused millions of failed retirements. It has caused the biggest economic crisis in U.S. history. A good number of people who were friends of mine in earlier days will be going to prison following the next crash because of the tactics they employed to “defend” this Get Rich Quick garbage. Support that? Huh? What? I don’t think so, man.
My best wishes to you and yours, Anonymous.
Rob
Many of us practice buy, hold and REBALANCE. It is called portfolio allocation. It works and your repeated lies don’t change the fact that it is highly successful. I am always happy to compare my results with yours, Rob.
To rebalance is to return to the same allocation you chose for yourself when you entered the market. It is to aim to stay at the same stock allocation at all price levels. It is to deliberately fail to exercise price discipline when buying stocks.
There is now 33 years of peer-reviewed research showing that to refuse to practice price discipline always dramatically increases risk while also always dramatically reducing long-term return. This “strategy” has never worked for a single investor in the 140 years of stock-market history available to us today. It has become popular four times in U.S. history. In every case, it has caused a wipe-out for every investor who fell for the idea. The collective losses have in each and every case been large enough to bring on an economic crisis. We have not once in those 140 years experienced an economic crisis not brought on by the widespread use of the Buy-and-Hold-and-Rebalance “strategy.”
The only results that matter are long-term results. If there had ever been a single time in U.S. history when the pure Get Rich Quick approach had worked for a single investor in the long-term, you would have pointed to the peer-reviewed research showing this a long, long time ago. Wade Pfau spent a lot of time and effort trying to find such a study in the literature. He never found anything. He was so amazed to learn this that he went to the Bogleheads Forum and asked if anyone there knew of a single study supporting the Buy-and-Hold-and-Rebalance “strategy.”
Jack Bogle did not know of a single study supporting Buy-and-Hold.
Bill Bernstein did not know of a single study supporting Buy-and-Hold.
Larry Swedroe did not know of a single study supporting Buy-and-Hold.
Rick Ferri did not know of a single study supporting Buy-and-Hold.
The response of you Goons was to threaten to send defamatory e-mails to Wade’s employer in an effort to get him fired unless he was willing to stop doing honest research in this field.
I wonder why.
Rob
This “strategy” has never worked for a single investor in the 140 years of stock-market history available to us today.
Stocks have returned 10% over the last few decades, and that you could have achieved that return by simply buying and holding. And 10% is a high enough return for investing to “work” for anyone. You agreed to all these things a few days ago.
So how exactly could it have “never worked for anyone”?
I say that Buy-and-Hold never works because it always greatly increases risk and it also always greatly diminishes return. The peer-reviewed research that I co-authored with Wade Pfau shows this. That’s why you Goons threatened to send defamatory e-mails to Wade’s employer in an effort to get him fired from his job in the event that he continued to publish honest research. You don’t want this research to be featured on the front page of the New York Times. I do want that. We are working at cross purposes.
All that you are saying when you say that the market delivers an average return of 10 percent without an inflation adjustment is that the average REAL return is 6.5 percent real. That’s the number used in every calculator at this site. So there obviously is no dispute over that point.
The question is — Is it better to keep your risk profile roughly stable or is it better to let your risk profile jump all over the place as valuation levels jump all over the place?
The paper that I co-authored with Wade shows that it is far, far, far better to keep your risk profile roughly stable. Even Jack Bogle agrees with this when he is speaking honestly. Bogle has said many times that investors should aim to “Stay the Course!” Well, that’s right! To stay the course, one needs to follow a Valuation-Informed Indexing strategy. Risk changes with changes in valuations. So investor allocations must change with changes in valuations. Bogle needs to start listening to his own advice!
If Buy-and-Hold were a real thing, we never would have seen a single death threat or a single demand for a single unjustified board banning or a single act of defamation or a single threat to get a single academic researcher fired from a single job.
Buy-and-Hold is a marketing gimmick. A very, very dangerous and destructive one. Buy-and-Hold has caused four economic crises over the past 140 years. There are millions of people unemployed today because of the dishonestly and intimidation tactics of the Buy-and-Holders. There are millions of people on the way to seeing their retirement plans fail today because of the dishonesty and intimidation tactics of the Buy-and-Holders. There are millions of people who are beginning to lose confidence in our economic and political systems because of the dishonesty and intimidation tactics of the Buy-and-Holders.
I want no part of it, Anonymous. Going to prison is not real high up on my bucket list.
Please try to find someone else.
I will continue to post honestly re safe withdrawal rates and scores of other critically important investment-related topics.
I naturally wish you all good things.
Rob
I say that Buy-and-Hold never works because it always greatly increases risk and it also always greatly diminishes return.
It sounds like what you mean is that looking backwards, with 20/20 hindsight, varying your allocation at certain points improved returns versus not varying it. That is true, and obvious.
But what you said was: buy and hold has never worked for anyone. That is false, and not the same thing at all.
No.
Valuation-Informed Indexing has worked on a going-forward basis for 140 years now. The data is available at Shiller’s site. There is no 20/20 hindsight involved in any way, shape or form.
The idea that it might not be necessary to exercise price discipline when buying stocks came about because of an historical accident. Index funds were not generally available at the time that Fama did his research and long-term timing only works with index funds. So Fama didn’t bother to check on long-term timing. He only looked at short-term timing. Naturally, he found that short-term timing never works (all of the subsequent research backs him up on this point).
Shiller was the first researcher to check on long-term timing. He found that it always works and that it it always 100 percent required for every investor hoping to have any realistic chance whatsoever of long-term investing success. It is of course 100 percent preposterous to think that stocks are the one thing you can buy without exercising price discipline. All of the subsequent research has backed up Shiller’s “revolutionary” (his word) finding. There has never been any reason whatsoever to think that a Buy-and-Hold strategy might work for even a single long-term investor.
Now it’s just a question of bringing down the Buy-and-Hold Mafia and spreading the word to the millions of middle-class investors as to what the research really says. There is no intellectual issue. All of the research is on the same side. There is a mountain of research supporting Valuation-Informed Indexing and there is precisely zero research supporting Buy-and-Hold. What we have is a POLITICAL problem. The Buy-and-Holders are ashamed to acknowledge how many lives they have destroyed through their failure to correct their mistake for 33 years now. So they employ insanely abusive practices, including many that constitute financial fraud, in an effort to keep millions of investors in the dark.
I want nothing to do with it, Anonymous.
My aim is to gain a reputation all over the internet as the person who called out the Buy-and-Hold Mafia and tried to warn the millions of middle-class investors of the dangers of this smelly Get Rich Quick garbage.
Do you see?
We are working at cross purposes.
You are trying to extent the massive act of financial fraud. I am trying to bring it to an end.
I wish you all good things. But I have precisely zero desire t join you in a prison cell.
It’s not my particular cup of tea.
I hope that helps a bit.
Rob
He (Shiller) found that it always works and that it it always 100 percent required for every investor hoping to have any realistic chance whatsoever of long-term investing success.
That statement is 100 percent false. Must I quote Shiller again? “It (PE10) is not a timing mechanism.” So either he is lying, or he doesn’t understand his own Nobel Prize-winning research, or you don’t understand what the word “not” means. Personally I’d bet on the latter.
Let’s see what Shiller says in the weeks following the announcement of your prison sentence, X.
We saw Wade Pfau change his tune 100 percent when you Goons threatened to destroy his career and when Jack Bogle signaled that he was just fine with that. I have had numerous people tell me that they would LOVE, LOVE LOVE to give honest, research-based investing advice but that they hold back from doing so because they have seen how ruthless the Buy-and-Hold Mafia is in destroying the careers of anyone who dares to “cross” it.
My hunch s that Shiller has already written an entire book exploring the implications of his “revolutionary” (his word) findings of 1981 and that he will be publishing it in the wake of the next price crash and Bogle’s acknowledgment that Buy-and-Hold was always a big pile of smelly garbage and that we all need to move on and begin the process of rebuilding our broken economy.
We will find out for sure following the next price crash.
Is that fair enough for you?
Rob
Out comes the prison card when Rob has been shown to be wrong.
The prison card is a pretty darn big deal to me, Anonymous.
I don’t want to go to prison.
So I am not going to commit financial fraud.
The bottom line here is as simple as that.
I wish you all good things. But my efforts are aimed at getting your prisons sentence reduced, not at adding one for me.
Call me madcap.
Rob
Valuation-Informed Indexing has worked on a going-forward basis for 140 years now.
This makes no sense. We have no idea what’s going to happen going forward (that’s the future). We only know what’s happened historically (that’s the past).
Historically, US stocks have done better than stocks in China. On a going forward basis, we have no idea which will outperform.
We have no idea what’s going to happen going forward (that’s the future). We only know what’s happened historically (that’s the past).
The purpose of doing research is to learn how stock investing works.
The entire 140 years of U.S. stock market history tells us that exercising price discipline (long-term timing) is the key to long-term success.
Buy-and-Holders say that price discipline is not required. That’s Get Rich Quick. That’s the thing that the peer-reviewed research says never works.
Historically, US stocks have done better than stocks in China. On a going forward basis, we have no idea which will outperform.
We know that price discipline (long-term timing) is required in all places and at all times. If the Chinese fail to exercise price discipline, their market will collapse just as the U.S. market is in the process of collapsing. The Chinese would be smart to permit honest posting on the last 33 years of peer-reviewed research in this field.
Rob
You can’t back test VII because there is no clear buy and sell criteria. You just give vague generalities then when you backtest it you can just cherry pick convenient times to get in and out of the market. Unfortunately it isn’t as easy in the now which is why you failed to get into the market even when your little VII program was telling you to do so. Also why you have missed out on a huge run up and have bitterly predicting a huge crash ever since.
Please give exact criteria for implementing VII and someone other than you could possibly backtest the results. Sorry I can’t backtest results based on your assertion “you buy stock when it is a fair value like you would a sweater”.
You can’t backtest Buy-and-Hold either, Anonymous.
No one has ever backtested it. What people do is to ASSUME that people stick with their high stock allocations when they lose most of their retirement money. No one has ever been able to find a single investor who did this in the real world. But the Buy-and-Holders act as if this assumption were a reasonable one.
Valuation-Informed Indexers are FAR more likely to stick with their plans because they keep their risk profiles constant. That gives them a HUGE edge. And the entire 140-year record of the U.S. market shows that Valuation-Informed Indexers always end up far, far, far ahead of Buy-and-Holders in the long run. It is not even remotely a close call.
It is OBVIOUSLY not possible to identify a single stock allocation that every investor should follow and then to backtest that. Investors MUST take their individual circumstances into account. That is of course what I did. And — Surprise! Surprise! — I am today far ahead of the game as a result of having done so and poised to go even farther ahead following the next crash. Who’d a thunk it?
It is also OBVIOUSLY possible to identify a switching strategy that would make sense for the typical investor and to see how that strategy has done over the history of the market. As you well know, that’s what Wade Pfau and I did in the peer-reviewed research we did together. As you also well know, our peer-reviewed research showed that VII has been FAR superior to Buy-and-Hold for the 140 years of stock market history available to us for review. It reduces risk by nearly 70 percent while increasing returns by enough to permit the typical investor to retire five to ten years sooner than he ever thought possible during the Buy-and-Hold Era.
As you also well know, your response to seeing what the peer-reviewed research says on the question was to threaten to send defamatory e-mails to Wade’s employer in an effort to get him fired from his job unless he agreed to stop publishing honest research. Gee — I wonder why.
As you also well know, you will be going to prison following the next price crash and I will not.
I’ve “missed out” on so much!
You CAN buy stocks like you do sweaters (and bananas and computers). And you SHOULD be doing so.
To say that you should be buying stocks like you do everything else (that is, exercising price discipline) is the key to the entire thing.
Stocks are a good deal at some prices, a fair deal at other prices and a bad deal at yet other prices. Just like anything else you can purchase with money.
That’s the truth.
Buy-and-Holders say that stocks are always a good buy. That’s a lie. That lie has made the Wall Street Con Men very, very, very rich but it has destroyed the retirement hopes of millions of middle-class people while doing so.
I’m telling the truth about stock investing as revealed by the last 33 years of peer-reviewed research on the subject. If Buy-and-Hold were the truth, we never would have seen a single death threat or a single unjustified board banning or a single act of defamation or a single threat to get a single academic researcher fired from a single job. Those who are telling the truth don’t behave that way. Not ever.
I wish you well, my Goon friend.
Rob
I can absolutely backtest a buy and hold strategy what on earth are you talking about? I can go back 20 years
How often do I need to be changing this to keep up with a forever changing PE10 ratio?
20 years is not the length of your investing lifetime, Anonymous.
A strategy that works for only 20 years and then causes you to lose most of your retirement money is a strategy that doesn’t work.
Use the Scenario Surfer. You’ll learn what you need to know.
Or permit honest posting. You will have THOUSANDS of people telling you what you need to know.
You need to change your allocation roughly once every ten years. As you know.
Rob
20 years is a pretty long time Rob. If your strategy is significantly under performing for 20 years as VII is at this point it is time to rethink it. Many peoples’ entire working life is only 20 years such as yourself.
Also what your nonsense reply fails to account for, on purpose, is that over 20 years you will have gone from 80% in stocks to 60% stock and have been rebalancing all along the way. So even if your chicken little crash comes true it is not nearly as devastating as you purport.
20 years is a long time. But being able to retire 10 years sooner is a big deal. I am perfectly happy to wait 20 years to be far ahead if the benefit from exercising that patience is that I get to retire 10 years sooner.
In my personal case it didn’t take anything close to 20 years to go ahead. I went ahead after about six years and have stayed ahead for about 12 years now. I am only ahead by a small amount, to be sure. But I will be going ahead by a much greater amount following the next crash. And then I will have decades of compounding on that differential. It’s the long-term compounding that is the killer.
If you think that waiting 20 years to go far ahead is too long, go with Buy-and-Hold! Is anyone trying to stop you?
Rebalancing is irrelevant. Rebalancing is staying at the same allocation. Rebalancing is failing to exercise price discipline. That’s the worst of all possibilities, according to the peer-reviewed research.
The drop from 80 percent to 60 percent would help in some circumstances. But it would not be nearly enough in some circumstances. In 2000, you needed to be at about 20 percent stocks. That’s a drop of 60 percentage points from 80 percent. A drop of only 20 percentage points is off by a factor of 300 percent! Huh?
And there are circumstances in which dropping from 80 percent to 60 percent is moving in the wrong direction. There are times when stocks are undervalued too, remember. What if you should be moving your allocation up from 20 percent to 80 percent and you are instead moving it down from 80 percent to 60 percent? You are getting it wrong on both ends! Huh?
I think it is telling that someone who claims to believe in following the peer-reviewed research refers to the results of the research as “chicken little.” Again — Huh? Get emotional about stock investing much?
Most investing lifetimes are 60 years — from age 25 to age 85. If our investing lifetimes were truly 20 years, Buy-and-Hold would be a better option than it is. I cannot tell you what percentage of the time Buy-and-Hold presents better numbers at the end of 20 years. It’s about 10 percent of the time at the end of 30 years. It is certainly more than that at the end of 20 years. Perhaps 20 percent? I doubt that it’s more than 30 percent. Some enterprising researcher could check it out. But I am not personally going to go with a strategy that sometimes works at the end of 20 years but almost never does at the end of 30 years.
A 65 percent crash is not as devastating if you are at 60 percent stocks as it is if you are at 80 percent stocks. But why aim for even moderately devastating results? Why not aim to reduce the risk of stock investing by 70 percent while earning far higher long-term returns? That’s what I do. Are you able to imagine any possible downside?
Rob
You still have yet to layout a system for implementing VII.
VII has had you sitting on the sidelines for 20 years. If the average investing lifetime is from 25 to 85 then that would be like instead waiting till you are 45 to start investing. I’m sure you are familiar with how devastating that is, waiting 20 years to start investing.
If you had never heard of Buy-and-Hold, you would have figured out how to implement VII in three seconds, Anonymous. The only problem you have ever experienced re this is that you are addicted to a Get Rich Quick strategy and you cannot bear to give it up. It’s only the things that you came to believe before you learned about VII that have caused you problems.
We can predict short-term returns. We cannot predict long-term returns. So here’s how we implement:
1) We look at the best possible 10-year return on stocks;
2) We look at the worst possible 10-year return on stocks;
3) We look at the most likely 10-year return on stocks;
4) We look at what is available through the use of super-safe non-stock investment classes (TIPS, IBonds. CDs);
5) We choose a stock allocation that makes sense for someone with our life goals and financial circumstances and risk tolerance. We obviously want to protect ourself in the event that the worst-possible returns sequence for stocks turns up. But we don’t want to give up the return we would receive if the best possible returns sequence came up.
Sometimes there are judgment calls required. Sometimes you can make a case for 40 percent stocks and you can also make a case for 60 percent stocks. If that’s the way it is, that’s the way it is. In those sorts of circumstances, some will go with 60 and some will go with 40. We don’t know everything. The fact that there are judgment calls reflects that.
In other cases, it’s pretty darn clear that just about everyone should be going with a high stock allocation or a low stock allocation. In 1982, the most likely return was 15 percent real per year for 10 years. It would be a rare person who should be going easy on stocks when that sort of return is available. In 2000, the most likely long-term return was a negative number and the super-safe classes were paying 4 percent real. It’s pretty darn hard to make a case for a high stock allocation in those circumstances.
There is never going to be one answer as to what your allocation should be because investors always need to consider their personal circumstances. But there is never going to be a time when you can set your stock allocation without taking valuations (prices) into consideration. Valuations are 80 percent of the game. You can never fail to consider them.
That’s pretty much it. It’s not hard. This reduces risk by 70 percent while letting you retire five to ten years sooner. It’s Investor Heaven. The only downside that anyone has ever discovered is that it makes Buy-and-Holders feel bad to acknowledge that they made a mistake. We need as a society to get over that and bring on the greatest period of economic growth ever seen in our history.
As for the sidelines stuff, I have not been on the sidelines for one day. I am in TIPS and IBonds paying 3.5 percent real. That return has beaten the return on the S&P for the time-period in which I have been earning it at greatly reduced risk. I would have preferred to have been in fairly priced stocks because fairly priced stocks pay a return of 6.5 percent real. But fairly priced stocks have not been available during that time.
If as a society we had been permitting honest posting, they WOULD have been available. And I have
urged that we permit honest posting. But I don’t decide this matter by myself. We need a larger number demanding action on this massive case of financial fraud to turn things around. When you Goons are in prison, the rest of us will be posting honestly and enough of us will be persuaded to sell our stocks to pull prices down to where they need to be to make stocks an attractive buy once again. Stocks are great at reasonable prices. Stocks are AWFUL at the prices that have applied for the past 18 years (with the exception of a few months in early 2009).
I hope that helps a bit, Anonymous.
Rob
1. Ok so what on earth is the system? What are the exact PE numbers and corresponding stock allocation? How often do I adjust based on a constantly moving PE10.
2. You may have been in TIPS paying a far higher rate than you can get these days but that is not applicable to the average investor. The average investor would be putting something like 10% of their paycheck aside each month which means they would not have access to such high TIPS rates for the majority of this time period.
What is your “system” for buying a car, Anonymous?
Do you say “I will always pay exactly $20,000 for every car I buy, never a penny less and never a penny more?
That would be silly, no?
So it is with stocks.
The “system” is to do what is in your best interests. If stocks offer a better deal than the super-safe asset classes, go heavy with stocks. If the super-safe asset classes offer a better deal than stocks, go heavy with the super-safe asset classes. Always do what is best FOR YOU (NOT what is best for the Wall Street Con Men). ALWAYS, ALWAYS, ALWAYS, ALWAYS consider price before putting money down on the table. NEVER listen to the con that there might be some mystical, magical alternative universe where it might work out not to consider price when buying stocks.
Is that a system enough for you? To put your interests ahead of the interests of the Wall Street Con Men pushing the smelly Buy-and-Hold garbage? It sure works for me.
The market cannot work unless we all put our interests first. It is the conflict between the interests of buyers and sellers that makes market function. You take away self-interest from a market and the market collapses. That’s why we are in an economic crisis today. We ALL should be pursuing our own interests and encouraging others to do so. When the Wall Street Con Men become as dominant as they have become in the Buy-and-Hold years, we ALWAYS see a crash and an economic crisis. That benefits no on.
We see significant changes in the P/E10 level very rarely. You should check the P/E10 level once per year. You only need to make an allocation change once every ten years on average. That’s hardly “constant.”
There are no exact P/E10 levels and corresponding stock allocations any more than there are exact stock allocations for all Buy-and-Holders. Some Buy-and-Holders are at 50 percent stocks, some at 60, some at 70, some at 80, some at 90. So it is with VII. You always need to take your personal circumstances into consideration.
TIPS don’t pay 3.5 percent real today or anything close to it. Investors obviously have to take that into account. That’s the “system.” Who’d a thunk it?
Buy-and-Hold is a scam. If the car dealers told you that you should never question the price asked by the dealer, just to turn your money over because cars are worth buying at any possible price, you would run from the room in horror. When Jack Bogle tells you that re stocks, you call him a “Saint.”
He’s a guy working hard to get you to take money out of your pocket and place it into his. He’s a salesman. He lies. All the time. That’s the story here.
You want to listen to a liar salesman, go ahead. Not this boy. I am investing according to what the peer-reviewed research says and it doesn’t say anything even remotely in the neighborhood of what Jack Bogle and the other salesmen in this field say it says. And I am telling the millions of middle-claass people whose lives have been destroyed by these Wall Street Con Men salesmen about the trickery that has been worked on them and about how you Goons made it possible for that trickery to continue for the past 12 years.
That’s the “system” that I follow. It’s called “the American system.” Under the American system, those who commit financial fraud on a widespread basis end up in prison cells after people see how they have been ripped off by their thousands of acts of deception and intimidation.
What’s your planned system for surviving your prison term, Anonymous?
Rob
I know a car is overpriced because I see the exact same car for $2,000 less somewhere else. I don’t have this luxury with stocks the price is the price because it already represents the average prices from millions of dealers unlike a car. You will of course say seeing a car for $2,000 cheaper would be like seeing TIPS offered at a good value. This is of course not the case because TIPS are totally different than stocks.
Cars and bananas are commodities and are consumable and haveotentially unlimited supply. Stocks are not as they have the ability to generate additional value attributed to the underlying businesses and their ability to generate more profit. Stocks also have limited availability. You cannot just produce more shares. As such, your analogies are incorrect.
TIPS and stocks are two different investment classes. You should be performing the same analysis on both of these investment classes. You should be looking at risk and return. There are some circumstances in which TIPS are an AMAZING deal. There are others in which TIPS are a HORRIBLE deal. There are others in which TIPS are a moderately good deal. So it is with stocks, Anonymous.
The problem here is the Buy-and-Hold idea that stocks are ALWAYS a good deal. That is a false claim.
You CAN know when stocks are overpriced as easily as you know when a car is overpriced. Look at the darn price tag! P/E10 is the price tag. That’s the entire point. It is as dumb to buy stocks without looking at the price tag as it is to buy a car without looking at the price tag.
Look at the price tag. That’s the system.
We all should be doing this. Every last one of us.
The only reason why some of us don’t is because it hurts our feelings to acknowledge that we made a mistake in not knowing this once upon a time. Are we going to continue making the same dumb mistake for all eternity or are we going to start taking the last 33 years of peer-reviewed research into consideration?
I say that we MUST start taking the last 33 years of peer-reviewed research into consideration. It might hurt to admit that mistake. But we can all get over that pretty darn quick once we start enjoying the benefits of reducing stock investing risk by 70 percent while enjoying far higher returns.
Rob
your analogies are incorrect.
There is no exception to the rule that market participants must consider the price of the items they purchase in a market.
If large numbers of market participants fail to consider price in any market, that market will eventually collapse.
This is why we have stock crashes and the economic crises that follow from them.
There was nothing we could do about it until 1981. We didn’t know how the market worked.
Now we do. Now crashes and the economic crises that follow from them are optional.
No market can work unless most participants exercise price discipline. That’s the reality. Anyone who tells you that you don’t need to consider price when buying stocks is telling you a dangerous lie.
I want nothing to do with that lie. I have hopes of becoming known as the most severe critic of that lie alive on Planet Earth.
Rob
Why have you left off the majority of my post which contained very relevant information. Are you aware that that is financial fraud? I can’t protect you at your trial I will have answer honestly when asked that you censored my posts committing numerous acts of financial fraud. What will be your system for surviving prison Rob?
(See doesn’t it just sound ridiculous)
“Bogle[’s] a guy working hard to get you to take money out of your pocket and place it into his. He’s a salesman. He lies. All the time. That’s the story here. You want to listen to a liar salesman, go ahead. Not this boy.”
Bogle, a salesman, out to fleece the common man?
And not, instead, actually the most clear and honest clarion call to common sense and good judgement to come down the pike since his mentor, Ben Graham? Not a friend to ‘everyman’ investor, but instead a charlatan? Not a man who has eschewed MANY opportunities to get obscenely wealthy, but who instead stuck to his publicly stated and long-practiced principles, in pursuit of truth, honesty, and what is morally right?
Rob, your pathology has made you not only stupid, but blind, as well. Man, that’s some bad disease you have.
It’s 100 percent ridiculous that you have committed financial fraud because a buddy of yours got an important number wrong in a retirement study he posted to his web site and you wanted to cover that up, Anonymous.
The answer is not for us all to pretend that we don’t see the financial fraud.
The answer is for us all to point to the financial fraud and demand that action be taken.
I will continue to point to your acts of financial fraud and I believe that following the next price crash we will see action taken.
I only wish that others were working as hard as I am to get this matter exposed so that your prison sentence would end up being a bit shorter than what it will be if this doesn’t come out until after the next crash.
I have done everything that I possibly could do, my old friend.
Rob
Bogle, a salesman, out to fleece the common man?
The tragedy here is that all of the positive things that you say about Bogle are as true as the negative things that I am compelled to say about him.
He has done many wonderful things. I have said that thousands of times and I will be saying it for the rest of my life.
But there are responsibilities that come with putting yourself forward as an investing expert. Shiller published his “revolutionary” (his word) research in 1981. Please tell me one way in which Bogle changed his investing advice as a result of that revolutionary research.
I don’t think that Bogle got into this with an intention to fleece the common man. But that’s where things stand today.
I am the best friend that he has in the world. I have for years now been asking him to come clean.
How about you, Yogi?
Rob
Rob,
I can no longer sit by and witness the financial fraud perpetrated on this website by you. If you are editing my posts and my fellow posters who only seek financial truth that is financial fraud.
This boy wants no part in financial fraud no way no sir. That means I will have to answer truthfully at your trial. Now after you are sent to prison will congress write me a check for 500 million dollars? I think it is very likely because my contribution to rooting out financial fraud will have been in far excess of this amount. Will I be anointed Time’s Person of the Year? I think this is very probable as well. I can’t think of a single more significant act in the history of our great nation which I love.
I love you too Rob. I want you to know that I do this because I am your best friend. I do this out of love not out of petty jealousy, hate, and personal failure. I want you to come clean about your decade plus of financial fraud and unjustified board censorship. Once you have served your time, whatever amount a jury of your peers deems reasonable, I think you will emerge grateful to me.
I do wish you the very best my dear old friend Rob.
It makes me happy to hear that you love me, Anonymous.
There was a moment or two there when I was beginning to experience some doubts.
Hang in there.
Rob