I’ve posted Entry #271 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called A Story From My Own Life That Shows the Power of the Self-Deception That Also Causes Stock Booms and Crashes.
Juicy Excerpt: I even have a particular reason for taking diabetes seriously. I had an uncle who had to have his legs cut off because he failed to change his diet after being diagnosed. I remember thinking as a teenager how horrible this was. It’s bad enough to lose one’s legs. But to lose them because you didn’t take an action that you knew was needed to prevent the loss — that’s doubly horrible. My uncle — one of the self-deluded humans — did that. Knowing what happened to him as a result of his delusions, I walked a good ways down that same path over the past two years. I’m a mess!
We all are.
That’s the point of Shiller’s “revolutionary” (his word) finding of 1981 that valuations affect long-term returns. If Shiller is right (there is now a mountain of evidence showing that he is), the mis-pricing of stocks is a real phenomenon. When stock prices rise to the levels that they rose to in the late 1990s, we are borrowing from our future selves and we have to pay the money back in years to come.
Anonymous says
“But to lose them because you didn’t take an action that you knew was needed to prevent the loss — that’s doubly horrible.”
How you doing on that weight and fitness, Rob? You have been looking awfully chunky the last decade or so, and it sure doesn’t get any easier, nor is it any better for your health to be carrying all that weight. What good is that 500 million you have coming if you aren’t around to spend any of it?
Rob says
I changed my diet dramatically on the day that I got my diabetes diagnosis (October 2). My highest weight was 260. I am now a little below 190. My doctor put me on insulin when I got the diagnosis. Two months later, she took me off because my blood sugar readings improved so dramatically (380 on the day of the diagnosis to slightly below 100, which is an acceptable level).
My hope is that this will turn out to be a good thing. If the diagnosis was what I needed to change my eating habits, it may have saved me from a heart attack. I like to try to turn negatives into positives.
The hard part, of course, is sticking to the new eating habits for life. That will not be even a tiny bit easy. It’s been fear that’s been driving me to change in the early months since the diagnosis. As the fear dissipates, there will be huge temptations to slip back to old habits. I have already experienced some of that. I allowed myself a few slips in the two weeks following Christmas. So I am by no means home yet.
If I can keep up the good eating habits for six months, I will feel more confident in my ability to make them a lifetime thing. So I am waiting to see where things stand in early April.
Dr. Bernstein is my hero. His life story is amazing and inspiring. For me, it’s proof that there is a God. The man has improved the lives of millions of people in a very big way. I am grateful that he did the work that he did so that I had better options than the diabetics who came before me.
I have had bad eating habits all my life. So sticking to a better way is going to be a tough business. In theory, anything that I can do for three months I can do for 30 years. But there’s a big gap between the theoretical realm and the practical realm. So I guess my plan for now is just to continue putting one foot in front of the other.
I have a funny feeling that I will discover good ways to make use of the $500 million in any event!
Thanks for asking. Kinda, sorta.
My best wishes to you, Goon friend.
Rob
Anonymous says
Can’t wait to get a glimpse of the new you at the next Fincon!
Rob says
Okay.
But I’ve got to stick to the new eating habits until then or it all won’t work out so hot!
Hang in there, man.
Rob