Set forth below is the text of a comment that I recently posted to another blog entry at this site:
What new information do you have that you believe people have not already heard from you?
That’s a super great question, Anonymous.
It’s not information that people need. Everything that I say is rooted in information supplied by Shiller back in 1981. People can hear the phrase “valuations matter” 10,000 times and not have it have any influence on how they invest.
What people need is discussion. People need to talk these things through.
And people need exploration. Most people do not today appreciate the many far-reaching implications of the finding that valuations matter. One of the reasons why I posted so frequently is that the finding that valuations matter affects every strategic question that comes up in stock investing. I want to show people that this advance in our knowledge changes everything we once thought we knew about how stock investing works. It is not a single information bit that I am supplying. It is an entirely new way of thinking about the stock investing project. People can only come to appreciate how important this is if Valuation-Informed Indexers show them how it applies in hundreds of different circumstances.
And people need multiple sources of confirmation of the insights. I am not going to be the only one posting about Valuation-Informed Indexing in days to come. We need to have THOUSANDS of posters doing this. People are just not going to believe what one person says and for good reason. We need to hear Bogle comment on VII. And Bernstein. And Burns. And on and on and on and on.
Those people are not going to offer only positive comments. That’s good. People will not learn from hearing only positive comments. People need to hear positive comments from posters who believe that positive comments are warranted. And people need to hear negative comments from posters who believe that negative comments are warranted. That’s how learning experiences work. We need a National Learning Experience re the last 33 years of peer-reviewed research in this field and re how the findings of the post-1981 research relate to the findings of the pre-1981 research (which also contains many powerful insights, to be sure).
Do you see?
There was a fellow named “Earnabuck” at the Bogleheads Forum when I posted there. He didn’t agree with most of my investing ideas. But he was a big defender of mine because he believed strongly that all posters should be permitted to post their sincere views. He said one time that he was present for the Motley Fool discussions and that at the time he agreed with Greaney but that over time he had come to agree with me that the valuation level that applies at the time the retirement begins must be taken into consideration in the calculation of the safe withdrawal rate.
That was an amazing statement.
The guy was obviously not biased against me. So when he agreed with Greaney, he was not being a Goon. And the guy was obviously smart. So why couldn’t he appreciate the simple point that I made on the morning of May 13, 2002, within one or two hours of the time I made it?
He couldn’t. That’s clear beyond any reasonable doubt.
The point is a painfully simple one. The price you pay matters when buying stocks just as it does when you buy anything other than stocks. Could anything be more obvious? But this guy really did not get it for a long, long time. It took him YEARS.
We do not lack for information, Anonymous. That is not our problem. Humans are not information processing machines. That’s not how they operate.
We need to talk about this stuff. Openly. Honestly. Bluntly.
We need to be friendly to those on “the other side.” We need to be respectful.
But we MUST all say what we truly believe. That’s how humans learn.
I could talk about this aspect of the question for a long, long time. So I am going to stop there unless you ask further questions.
But the question you are asking here could open all sorts of doors if you would ponder the matter a bit.
You Goons are not bad people. I do not say that.
The Wall Street Con Men are not bad people. I do not say that.
We all want the same things. We are all on the same side.
If you could LISTEN to what the other side is saying without so much defensiveness, you could learn some amazing things. In time you would come around.
Or not. I believe that you would come around. Perhaps I am wrong. If you did not come around, you would still gain from the experience. By letting the other side have its say and seeing that you were not persuaded, you would be confirmed in your current beliefs. You would over time become more confident in what you believe. Which is a big plus when you are following a strategy that you must stick with for it to work.
People don’t shift to a new model because they are exposed to some “information” about it. Conversion is a more gradual process. People need to be permitted to talk things out. With LOTS of different proponents of the new idea. They need to be able to challenge those people, to ask lots of hard questions. They need to ponder things over time. They need to be able to watch to see the extent to which friends of theirs are convinced over time. They need to try out different possibilities.
We have had the information we need for 33 years. Now we need to take it to the next step and start enjoying the big-time learning experiences that follow from it.
Rob
Anonymous says
You have repeated the same stuff for 13 years. People have had plenty of time to consider your opinions.
Rob says
The peer-reviewed research has shown for 34 years that there is zero chance that a Buy-and-Hold strategy could ever work for even a single long-term investor.
Time is not the issue here, Anonymous.
What we need is enforcement of the laws against financial fraud. We need the announcement of prison sentences.
It’s all downhill from that point forward
I wish you all good things.
Rob
Anonymous says
Your post indicates it is a time issue.
Rob says
No.
It will take time to bring people around once the internet is opened to honest posting. That is so. The change here is a fundamental one and a dramatic one. A tiny number of people will make the change quickly. But that is more likely to be the exception than the rule. So, yes, time is a factor.
But the clock does not even begin running until the laws against financial fraud are enforced. People will not participate in discussions for so long as the sorts of individuals who have posted in “defense” of Mel Lindauer and John Greaney and Jack Bogle roam free. For obvious reasons. I mean, come freakin’ on.
My best and warmest wishes to you and yours, Anonymous.
Rob
laugh says
Rob’s conspiring against himself to keep his charade from never ending. 13 years in and ‘the clock hasn’t even started ticking’.
Rob says
That’s the entire story, Laugh.
You and I are not enemies. We want exactly the same thing — to become better investors. If I win, you win big-time. That’s true of everyone on the planet. This is a win/win/win/win/win for millions. So what the heck is holding us all back? Figuring that one out has always been the obstacle.
When we figure that one out together, we begin working on every other question TOGETHER. Once we are working on these questions together, we will be able to figure them all out in little time. There will be no friction. Just learning experiences everywhere we turn.
Intellectually,we figured out what we need to know in 1981. I didn’t figure out what we need to know. This fellow Shiller did that. He showed that valuations affect long-term returns. That changes everything. Absolutely everything. It means that we need to rewrite all the textbooks. Have we done so? Has every textbook on how stock investing works been rewritten since 1981?
We haven’t rewritten ANY textbooks. Wade Pfau holds a Ph.D. from Princeton and on a daily basis he was asking ME questions about how stock investing works. How could that be? It’s all documented. It be. But HOW? How could such a thing be? It’s crazy. I don’t have a Ph.D. from anywhere. I never took a single course on investing. So how is it that Wade needs to ask me these questions? How it is that I know more than these recognized experts?
I know more because I take the last 34 years of peer-reviewed research into consideration with every question and I address and the recognized experts (except for a small number like Rob Arnott and Robert Shiller — and even these two do not go as far as I go) do not.
So —
Did the clock start ticking 34 years ago when Shiller showed that there is zero chance that a Buy-and-Hold strategy can work for even a single long-term investor in this or any other solar system?
Or has the clock not started ticking yet?
The clock started ticking intellectually in 1981. We learned what we need to know to click in the last piece of the investing puzzle at that time.
But the clock hasn’t started ticking in a practical sense for the vast majority of experts to this day. Bogle cannot give a good answer to the question “How did you change your investing advice when you learned about Shiller’s “revolutionary” (Shiller’s words) findings” because Bogle didn’t change his investing advice one iota in response to Shiller. Bogle has been giving the same investing advice in the post-1981 period as he was giving in the pre-1981, as absurd as that reality is.
So Bogle isn’t an “expert” anymore. He is a fool. Anyone giving investing advice that is 34 years out of date is a fool. That’s 100 percent true as an objective matter. I don’t personally think of Bogle as a fool. He is a giant in this field. I learned as much from him as I have learned from anyone else in the field, with the possible exception of Shiller. None of my work would have been possible had Bogle not made all of his powerful and genuine insights available to me before I started coming up with my own. So Bogle is a true giant. But because of his failure to incorporate the implications of the last 34 years of peer-reviewed research into his thinking he is today a true giant fool. That’s where things stand.
There is no intellectual case for Buy-and-Hold. There never was. Buy-and-Hold was rooted in an easy-to-understand mistake — the failure to distinguish short-term timing and long-term timing, which happened because index funds were not available at the time the mistake was made and thus no one saw the important of the distinction (long-term timing works only with index funds). So it is not an intellectual weakness holding us back and no amount of intellectual discussion can ever advance the ball.
Our problems are emotional in nature. The Buy-and-Holders are ashamed of themselves because so much time has passed since their mistake was uncovered by the peer-reviewed research and they have destroyed so many millions of lives by their failure to say the words “I” and “Was” and “Wrong” for so many years now. I cannot change that. I don’t have access to a time machine. So I cannot take us back to 1981 and spare the Buy-and-Holders their shame.
My job is to stop the shame from spreading. My job is to help the Buy-and-Holders to understand that the sooner they say the words that they should have said 34 years ago, the sooner they can go back to feeling good about themselves for helping people to understand better how stock investing works.
Someone has to stand up to you Goons, Laugh. There is no other way to get the clock ticking in a practical sense. Once one large site permits honest posting, it won’t be long before they all do. The benefits of permitting honest posting are too great for anyone in this field to ignore them once their readers have access to one place that tells the story in a fully straight and true and research-based manner. My job is to be the person who makes that happen. My job is to free us all to learn what works, to move beyond Buy-and-Hold to the first true research-based strategy, Valuation-Informed Indexing.
The clock started ticking 34 years ago in an intellectual sense.
The reason why I am so far ahead of most of the “experts” is that I took advantage of that revolutionary breakthrough and they have not yet done so.
Circumstances will not permit the experts to continue to ignore the last 34 years of peer-reviewed research. If they remain on the path that they are on today, the research shows that our economic system will collapse. I know with 100 percent certainty that that’s not what they want. So I have a funny hunch that they are not going to want to remain on the current path following the next price crash. At that time the clock will start ticking in a practical sense and we will all get what we have all wanted deep in our hearts going back to the first day.
Our society is working its way through a difficult process. The rewards on the other side of The Big Black Mountain will be huge. We will see the biggest surge of economic growth that we have ever seen. I am honored and humbled to do the work that I have been elected to do.
I wish you all good things, my long-time abusive posting and future prison-dwelling friend.
Rob