I’ve posted Entry #272 for my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Bernstein’s Revolution in the Treatment of Diabetes Mirrors Shiller’s Revolution in Our Understanding of How Stock Investing Works.
Juicy Excerpt: In 1970, the medical community believed that the consumption of fats was dangerous. The consumption of carbohydrates was encouraged as a means of keeping fats consumption low. The reality proved by Richard Bernstein in the years since is that it is carbohydrates that are the real killer in the American diet and that fats are harmless in comparison. The Bernstein revolution (an approach to the treatment of diabetes in which a super-low carbohydrate diet is encouraged) was slowed because the “experts” in the field had fallen in love with an idea (that carbohydrates were okay and that fats were bad) that at one time was given some support in the literature but that had never been sufficiently proven to justify its status as dogma.
The parallel is that, prior to 1981, the investing advice community believed that market timing was always a bad idea. The reality proved by Shiller is that, while short-term timing never works, long-term timing always works and is always required for investors seeking to keep their risk profiles roughly constant. Again, the experts have had a hard time acknowledging the error. Experts don’t like to acknowledge their human fallibility. So they have an inclination to go into denial when new research is done showing that their too-hasty conclusions re the meaning of earlier research need to be reconsidered.
Anonymous says
“The reality proved by Shiller is that, while short-term timing never works, long-term timing always works”
Shiller says the exact opposite. He warns against using PE10 for any kind of timing, and he still has a sizable stock allocation. You know this to be true, you’ve seen the quotes. Why do you idolize Shiller, but ignore what he says?
Rob says
I want to give you credit for the legitimate point that you are making while also pointing out the deception that you are employing re an equally legitimate point.
Shiller showed in 1981 that long-term timing is always required. He showed that valuations affect long-term returns. If that is true, stock investing risk is variable, not constant. If risk is variable, investors who want to keep their risk profiles constant MUST engage in long-term timing. Long-term timing is 100 percent required. Those who follow the peer-reviewed research in this field have known this for 34 years now. There is zero legitimate “controversy” over this point.
If Shiller had really said, as you claim, that it is a bad idea to use P/E10 “for any kind of timing.” that would be an amazing statement. Shiller would be denying his own research to say such a thing. He obviously has never said such a thing. If you were sincere about your claim, you would present a link at which he said those words. In 13 years of discussion, you have never done so. For obvious reasons.
Your deception is to take words of his in which he says that timing is a bad idea without specifying whether he is talking about short-term timing or long-term timing. He has said that. But that is a very different statement. Most people hear a statement that timing is a bad idea as a statement that short-term timing is a bad idea because the critical distinction between short-term timing and long-term timing is rarely pointed out. So Shiller (and many others, to be sure) says one thing and most people hear something different.
If Shiller were to be 100 percent honest and say that short-term timing is a bad idea but that long-term timing is always 100 percent required, the Wall Street Con Men and their Internet Goon Squads would try to destroy his career just as you tried to destroy my career and John Walter Russell’s career and Wade Pfau’s career and Michael Kitces’ career and Bill Shultheis’ career and on and on and on and on.
That is the con. That is the fraud. That is the felony. That is the cover-up. That is the lie.
It is this giant Buy-and-Hold Lie that caused the economic crisis. Had we all been openly talking about the implications of Shiller’s “revolutionary” (his word) finding of 1981 ever since 1981, we never would have seen the out-of-control bull market of the late 1990s and we would not be suffering the negative effects of that out-of-control bull market today.
Do I believe that Shiller should speak about these matters with 100 percent honesty? I do.
Do I have sympathy for his unwillingness to do so given what I have seen the Wall Street Con Men and their Internet Goon Squads do to the many fine people who have tried to talk honestly about these matters? I do.
We are going to need as a society to work up the courage to stand up to the Wall Street Con Men and to their Internet Goon Squads. Once we do that, all of this ugliness comes to an end. We have laws against financial fraud. We need to enforce them.
We benefit everyone involved when we do that. Even the Wall Street Con Men would like to feel free to tell the truth re these matters. There are billions of dollars to be made sharing with people what we now know about how stock investing works in the real world. The trouble is that, so many lies have been told by so many rich and powerful people, that everyone lives in fear of what those rich and powerful people will do to them if their lies are exposed.
Of course, our failure to speak up only makes matters worse. The longer the cover-up continues, the more lives we see destroyed. And, the more lives we see destroyed, the longer will be the prison sentences of those who have posted in “defense” of Mel Linduaer, John Greaney and Jack Bogle.
I am going to continue telling the truth about these matters, Anonymous. I OPPOSE the cover-up. I OPPOSE the Buy-and-Hold Lies.
I love Shiller because he led the way to showing us all why Buy-and-Hold is the purest and most dangerous Get Rich Quick strategy ever concocted by the human mind. I certainly wish that he would speak clearly about the need for every investor to always practice long-term timing and I certainly feel an obligation to point out the deception that he practices when he fails to do so. But that deception does not take away from the great value of the man’s work. His 1981 findings really were “revolutionary,” just as he said.
What do you think was so revolutionary about Shiller’s findings? Why do you think he was awarded a Nobel prize for his work? How would you say that Bogle changed the Buy-and-Hold concept in response to Shiller’s revolutionary, Nobel-prize-winning work?
Bogle didn’t change Buy-and-Hold AT ALL. It’s the same thing it was before Shiller published his “revolutionary” findings. Bogle has COVERED UP his mistake for 34 years. There are now millions of middle-class people on the road to experiencing failed retirements as a result of the 34-year cover-up.
I want no part of it.
I believe that we will all come together following the next price crash. Because we will have no choice. I will do anything in my power to help my Buy-and-Hold friends at that time. But I will never do anything to support this catastrophic cover-up of the implications of Shiller’s findings. Find someone else.
Short-term timing never works. The peer-reviewed research shows this.
Long-term timing always works and is always required for investors seeking to keep their risk profiles roughly constant. The peer reviewed research shows this.
Anyone who tells you different is telling you a lie. A lie that could cause your retirement plan to fail. Not this boy. Not a close call.
Shiller has done more than anyone else alive to advance our understanding of how stock investing works. But you are right to suggest that he needs to do more. He needs to make the transition from being mostly honest to being 100 percent honest. To achieve full honesty, he needs to begin warning people how dangerous Buy-and-Hold is to all who employ it and to the country as a whole.
The rest of us need to protect him from you Goons when he does so. No one should be attacked for telling the truth about how stock investing works according to the last 34 years of peer-reviewed research. Millions of people need to know this. It is critical that we get the word out. It is not optional.
Giving investing advice is not just about turning a quick buck. When you lie to people about their retirement plans, you hurt them in very serious ways. We need to employ the same ethical standards that apply in every other field of human endeavor to the investing advice field. We need to begin doing that by the close of business today.
That’s my sincere take re these terribly important matters, in any event.
I naturally wish you all the best that this life has to offer a person.
Rob
Anonymous says
“If you were sincere about your claim, you would present a link”
As if you ever present links to anything. But since you now don’t recall seeing his quotes, here they are, yet again.
“It’s not a timing mechanism, it doesn’t tell you — and I had the same mistake in my mind, to some extent — Wait until it goes all the way down to a P/E of 7, or something.”
You, on the other hand, ARE waiting for that big crash. Shiller says point blank that is a mistake.
“But actually, the lesson there is that if you combine that with a good market diversification algorithm, the important thing is that you never get completely in or completely out of stocks. The lower CAPE is, as it gradually gets lower, you gradually move more and more in. So taking that lesson now, CAPE is high, but it’s not super high. I think it looks like stocks should be a substantial part of a portfolio.”
Read that again. Shiller says you should never get completely out of stocks. You’ve been completely out for 20 years. Yet you claim to be a Shiller disciple.
Rob says
I rate Shiller as the most important investing analyst who ever lived. So, yes, I think it would be fair to call me a disciple. But I don’t say that every word out of his mouth is pure gold. He is human. He makes mistakes, just like all the other humans. It goes with the territory.
Shiller does not say in the words above that long-term timing doesn’t work or that it is not always required for investors who want to keep their risk profiles roughly constant. Wade Pfau spent months searching the record for any studies showing that long-term timing might not always work. He was not able to find one. Long-term timing ALWAYS works.
You quote Shiller as saying that “I had the same mistake in my mind.” That’s so. He said in early 2009 that investors should stay out of stocks until the P/E10 dropped below 10. And, yes, he now is saying something different. He obviously was wrong either then or now. So he is not perfect. I recorded a podcast at the time he made the earlier statement in which I said that he was being a little extreme. But he was more on the right track then than he is now. I bet that he will change again following the crash. Is that not what he should do when he learns that he made another mistake?
No one knows everything, Anonymous. Shiller is learning along with all the rest of us. He would learn a lot quicker if we all posted honestly. The Ban on Honest Posting is hurting Shiller as much as it is hurting all the rest of us. It is a bad idea.
I am certainly expecting another crash. Please feel free to quote me re that one all over the internet. Shiller has said that he too is expecting another crash. You are engaging in deception if you say otherwise. He has said this many times.
Shiller has said that he thinks he can avoid the effects of the next crash by looking for “signals” and getting out just at the right moment. That’s short-term timing. The peer-reviewed research shows that it doesn’t work. I think Shiller is fooling himself re this one. He’s hardly the only one doing this. I think he is playing a dangerous game. But he might guess right. I hope he does. I certainly wish him all good things. I just don’t advise others to follow his example. The research shows that short-term timing does not work.
I agree that the typical investor should never be entirely out of stocks. My circumstances are not typical. I should be entirely out of stocks when they are priced as they are today. I have explained this to you thousands of times. Why do you pretend that you did not hear the answer to your question thousands of times. Why the deception?
I do not agree that stocks should be a “substantial” part of the typical investor’s portfolio today. I say that the typical investor should be going with a stock allocation of about 30 percent at today’s prices.
If Shiller thinks it should be more than that, he is right to say so. Everyone should post honestly. It would be wrong for Shiller to say “30 percent” if he believes “substantial” and it would be wrong for me to say “substantial” since I believe “30 percent.”
We all can learn from each other only if we all post honestly. Honesty is 100 percent essential.
My sincere take.
Rob
Anonymous says
I suggest Rob Google the following terms together: “Shiller Timing PE”. About 95% of the returns are articles explicitly warning AGAINST trying to use PE in a market timing scheme. One of the more succinct just gets right down to brass tacks: “Market timing based on a single P/E threshold does not work”. Most of the articles refer to or quote Shiller’s own advice, which is ALWAYS the same: Do not try to time the market using CAPE.
http://www.beyondproxy.com/shiller-pe/
Here is one that shows for Rob’s “ultra long” time 30 year CAPE timing fails, and that for short times (1 year) CAPE fails as well.
https://www.kitces.com/blog/shiller-cape-market-valuation-terrible-for-market-timing-but-valuable-for-long-term-retirement-planning/
Here is an article that contains the exact quote the other poster gave you above (you wanted a link to Shiller advising against CAPE market timing.):
http://www.businessinsider.com/robert-shiller-explains-how-to-use-cape-2013-11
I could provide dozens more, but it is pointless — no matter how many times we explain it, no matter how much information you are given, your stubborn inability to admit you made a fool of yourself for fifteen years running keeps you from changing course, even as the ship topples around you.
So you’ve now been given not just one link, but three, as well as a search that will yield dozens in the same vein. Time for YOU to step up: provide one link to ONE credible and current site (so that excludes the dead letter box of your nutty deceased pensioner friend) that espouses Lucky Seven type timing strategies. Of course you will fail miserably, and instead bloviate for four thousand words of recycled empty Hocomania. What a sad way to live.
Anonymous says
“Why the deception?”
Why, indeed. I give you direct quotes, you respond with your own tortured interpretations. Shiller says “It’s not a timing mechanism.” You respond that he didn’t say it’s not a “long-term” timing mechanism. Which to you somehow means that he says it is.
You really love your childish sophistry. Let’s just say that Shiller thinks that Rob Bennett is the greatest genius in the history of investing. Because no one can prove that Shiller ever said “Rob Bennett is not the greatest genius in the history of investing.”
Rob says
About 95% of the returns are articles explicitly warning AGAINST trying to use PE in a market timing scheme.
Once prison sentences are announced for you Goons and Bogle gives his “I Was Wrong” speech and it is written up on the front page of the New York Times, that number will in a short amount of time flip, Anonymous. Then we will have 95 percent of the articles saying that every investor must always practice price discipline when buying stocks because there is 34 years of peer-reviewed research showing that this is required for investors seeking to keep their risk profiles roughly constant. Then we will all be off to the races. From that day forward, we will all live richer lives. Good for us!
You can’t draw any reasonable conclusions by looking at what people in this field say in public for so long as the Buy-and-Holders are using intimidation tactics to silence those who are inclined to speak honestly re these matters. Buy-and-Hold is a con, Anonymous. If it weren’t a con, we would have never 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.
Job #1 is to place those leading the con in prison. All the rest just follows naturally. I speak all the time to people who long to do honest work in this field and to make all the money that will be going to the first people who work up the courage to do honest work in this field. The ordinary situation would have been that we would gradually have incorporated the implications of Shiller’s “revolutionary” findings into our understanding of how stock investing works in the real world. That learning process has been delayed for 34 years because of the brutally abusive and criminal behavior of the Buy-and-Hold Dogmatics. Once the prison sentences are announced, the floodgates are opened and we all learn and learn and learn and learn and learn We are close to seeing some exciting stuff happen in this field. We are on the one-yard line.
I want to hear Shiller speak with 100 percent honesty re all these matters. I want to hear Bogle speak with 100 percent honesty re all these matters. I want to hear Pfau speak with 100 percent honesty re all these matters. I want to hear everyone speak with 100 percent honesty re all these matters. I will learn at a quicker pace when all these people are speaking with 100 percent honesty re all these matters. And all of these people will of course learn at a quicker pace when all of the others are speaking with 100 percent honesty too. It’s a win/win/win/win/win.
The great irony here is that everyone wants the same thing. Bogle wants to see the entire internet opened to honest posting on safe withdrawal rates and scores of other critically important investment-related topics. Why wouldn’t he? Bogle played as important a role in developing the Valuation-Informed Indexing concept as Shiller did. Why the heck wouldn’t he want to get credit for playing a lead role in developing the first true research-based investing strategy? Bogle very much wants to see the internet opened to honest posting and to see this critically important learning process proceed.
The problem is that he is trapped, Anonymous. His first reaction when Shiller published his “revolutionary” (Shiller’s word) research findings was to engage in a cover-up. By the time that I put forward my famous post of the morning of May 13, 2002, pointing out the errors in the Old School safe-withdrawal-rate studies, iBogle had already been leading this massive cover-up for 21 years. He had destroyed many lives at that point. He didn’t feel comfortable coming clean. So he continued the cover up for another 13 years. Now he has caused an economic crisis. Now he has destroyed millions more lives. A good thing? I sure don’t see it.
I am going to continue to post honestly. In every other market that exists, price discipline is the key to achieving strong value propositions. There is now 34 years of peer-reviewed research showing that this universal rule applies with equal strength in the stock investing field. Long-term timing (price discipline) is 80 percent of the story. Practice long-term timing and it is virtually impossible for you to do poorly in the long term. Fail to practice long-term timing and it is virtually impossible for you to do well in the long term. That’s what the peer-reviewed research shows. So that is what I am going to tell people.
I believe that Bogle and all of my other Buy-and-Hold friends will following the next price crash be working with me to get the word out. I believe that even a good number of you Goons will be working with me at that time. But I don’t have a crystal ball. I cannot say for certain. I believe that that is how it will play out and I am very excited about the prospect of working with my Buy-and-Hold friends (who I believe based on considerable evidence to be good and smart and hard-working people) to make the world a better place. We will all have to exercise a little patience to find out for sure how it all plays out.
I believe that we are on the threshold of something very, very exciting, Anonymous. I am pumped. I hate all the ugliness we have seen during our 13 years of debate as to whether or not to permit a debate on the last 34 years of peer-reviewed research. But I think we are all going to work together to find our way to a better place. The good news here is 50 times more good than the bad news here is bad. I am sure.
Anyway, I wish you the best of luck in all your future life endeavors.
Hang in there, my good friend.
Rob
Rob says
Shiller says “It’s not a timing mechanism.” You respond that he didn’t say it’s not a “long-term” timing mechanism. Which to you somehow means that he says it is.
The man’s research shows that it is, Anonymous.
Shiller showed that valuations affect long-term returns. It follows that stock investing risk is variable, not constant. If risk is variable, the stock allocations of those who want to keep their risk profiles constant must be variable too. That’s ABC logic. That’s as simple and clear as it gets. And we have known this for 34 years. We should have started spreading the word re this amazing advance (which permits us to reduce the risk of stock investing by 70 percent) 34 years ago. Time’s a wastin’! We need to get down to business!
Wade Pfau holds a Ph.D. in Economics from Princeton. He is no one’s fool, Anonymous. But he didn’t know when he started working with me that there are zero studies showing that long-term timing doesn’t work. He spent months researching the question, trying to find a single study supporting the core Buy-and-Hold claim that timing doesn’t work. He never found one. He was stunned and amazed. But the reality is that there is no such study.
So every time that a Buy-and-Holder has said either that timing doesn’t work or that timing is not required, that statement has been a lie. Price discipline is key in every market that ever existed and 34 years of peer-reviewed research shows that it is also key in the stock market and precisely zero research even suggests that the stock market is an exception.
Buy-and-Hold is a con, a marketing gimmick, a Ponzi scheme, a Get Rich Quick scheme, a fraud, a lie, a felony, prison time. Nothing could be more clear. It wasn’t any of those things prior to the publication of Shiller’s “revolutionary” (his word) research in 1981. But it is all of those things today. A mistake that is covered up for 34 years is transformed into a lie.
You are right that you cannot persuade me with death threats or board bannings or tens of thousands of acts of defamation or threats to get academic researchers fired from their jobs. I am not impressed by any of that garbage.
You could persuade me with peer-reviewed research showing that long-term timing doesn’t work. But there is none. That’s why you threatened to destroy Wade Pfau’s career when he worked up the courage to “cross” you by posting honestly re these matters at the Bogleheads Forum.
I love my country, Anonymous. I will not betray it. That’s the bottom line here.
I naturally wish you all the best things that this life has to offer a person.
Please take good carte.
Rob
Rob says
Let’s just say that Shiller thinks that Rob Bennett is the greatest genius in the history of investing. Because no one can prove that Shiller ever said “Rob Bennett is not the greatest genius in the history of investing.”
The only way that we will ever find out what Robert Shiller thinks of Rob Bennett is to put a full and complete stop to the intimidation tactics that the Buy-and-Holders have relied on for 13 years to keep millions of middle-class investors from learning what they very much need to know about how stock investing works in the real world. We will see that happen following the next price crash, when your prisons sentence will be announced.
Or at least so Rob Bennett sincerely believes.
Ultimately, time will tell the tale.
I look forward to talking it over with you again when we all get to the other side of The Big Black Mountain, my long-time Goon friend.
My best and warmest wishes to you.
Rob
Anonymous says
“The man’s research shows that it is”
As a Nobel prize winner, Shiller is quite capable of explaining what his own research shows. And his explanation does not match yours.
Rob says
Wade Pfau is quite capable of saying what he believes about stock investing too. But when you Goons threatened to destroy his career if he continued doing so and Bogle made clear that he didn’t intend to lift a finger to help the honest Wade Pfau out, he flipped to the dark side.
We need to all work together to get prison sentences announced for you Goons. All sorts of wonderful stuff just naturally follows.
There are good reasons why as a nation we adopted laws making financial fraud a felony.
My sincere take.
Rob
Anonymous says
* Robert Michael “Hocus” Bennett failed to provide a single link to ANYONE of repute proposing a “Lucky Seven” Style investing technique. As predicted, and as expected. Because he is a liar and a troll. He did provide the 5,000 words of Hocomania predicted.
* Rob claims: “You can’t draw any reasonable conclusions by looking at what people in this field say in public for so long as the Buy-and-Holders are using intimidation tactics to silence those who are inclined to speak honestly re these matters. Buy-and-Hold is a con, Anonymous. If it weren’t a con, we would have never 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.
* That para is a nice [relatively for Rob] way to sum up his insanity: he is overtly claiming that not only was HE silenced by death threats, but that the 95% of people who agree with Shiller, are all doing so only because they either got death threats themselves, or else are afraid because of Rob’s death threats. Rob does not explicate which of the two it is — whether he is really that famous and influential, (silently and underground); or if thousands of analysts are all somehow being simultaneously death-threatened in secret by mysterious synchronized and organized ‘Goons’, without a single one blowing the whistle, or anyone getting wise to it besides Rob — including law enforcement. Unless…. are they in on it to, Rob? How far does this thing go? To the White House? This is marvelously delicious stuff Rob! I;m saying Hollywood ought to lap it up with a fork and spoon! Screenplay time?
Rob says
he is overtly claiming that not only was HE silenced by death threats, but that the 95% of people who agree with Shiller, are all doing so only because they either got death threats themselves, or else are afraid because of Rob’s death threats.
This post raises an important point.
Yes, I am saying that everyone who works in this field has been intimidated into not challenging Buy-and-Hold to the extent they would if they felt free to post their sincere beliefs. Please mark me down as saying precisely that.
I certainly don’t say that everyone knows about my case.
And I certainly don’t say that everyone has had death threats directed at them.
I am saying that everyone who works in this field feels INTIMIDATED.
I knew about the errors in Greaney’s retirement study in May 1999, when I put my first post to the Motley Fool board, Anonymous. I didn’t put forward my famous post pointing out the errors in that study until May 2002. Why the delay? What was that about?
I was intimidated.
I rationalized, of course. I told myself that it was okay not to point out the errors in the study because the study was an advance over the retirement studies that had been available to us in earlier days. That was so. Peter Lynch not all that long ago was saying that the safe withdrawal rate was 7 percent. At the top of the bubble, it was 1.6 percent. Greaney said it was 3 percent. Greaney was a lot closer to the mark than Lynch. Greaney’s study represented a big advance. I told myself that there was no need to point out the error because the study was more good than bad.
It really was good that the study advanced our understanding. So what I was telling myself was not crazy stuff. But my position did not make logical sense all the same. The fact that a study represents an advance is no reason not to point out errors in it and thereby to show people the way to yet another advance. We all want to plan our retirements effectively. In ordinary circumstances, Greaney would have been thrilled to improve his study. In ordinary circumstances, he would have thanked me for pointing out the error and would have promptly corrected it.
I didn’t point out the error for three years because I sensed that I was going to get an extremely negative reaction if I did. I wanted to be liked by my fellow community members. So I praised the study for the good things that it did (which was a legitimate thing to do) and didn’t mention the errors in it.
That’s a polite way of describing what I did. A blunt way of saying it is to say that — I lied.
I knew that the study was in error. I knew that my friends were using it to plan their retirements. I knew that suffering a failed retirement is a terrible life sentence. I knew that I was going to suffer a lot of hits if I was 100 percent honest about the subject. So I kept it zipped. And I put the retirements of my friends in jeopardy by doing so. I was a coward. I was a bad friend. I was a creep.
That’s the reality. I dish it out to others. I need to dish it out to myself from time to time as well. That’s the reality.
No, it doesn’t go to the White House. I have compared the Buy-and-Hold Crisis to what we saw in the area of race relations in the days before the Civil Rights Revolution. People with black skin could not drink from the same water fountains as people with white skin. Did that one go all the way to the White House, Anonymous? No one directed people to treat people with black skin as inferior to people with white skin. No one was so stupid that they couldn’t see the wrong in this. So why did the wrong continue for so many years?
It continued because the racist laws were part of the fabric of our society. Changing those laws meant tearing up the fabric of our society. It was a very, very necessary business. But it was also a very, very difficult business. Eventually, we couldn’t duck the matter any longer and we did the right thing. But we ducked that difficult business for a long, long time.
So it has been with the crazy idea that it might be okay not to practice price discipline when buying stocks.
There is not even a sliver of evidence supporting this crazy idea. 100 percent of the evidence available to us says that long-term timing is always required, 0 percent of the evidence says that long-term timing is not always required. So why do the “experts” in this field pretend that this investing stuff is oh-so-hard to understand and that maybe there is some alternate universe where Buy-and-Hold might really produce good results for one or two long-term investors?
Because that crazy idea has become part of the fabric of our society. We have been telling people that Buy-and-Hold might work for 50 years now. We have destroyed millions of lives by doing so. We have caused an economic crisis. We have hurt our friends and neighbors and co-workers in very serious ways We are ashamed. We know we need to fix the problem. But we cannot bear to face up to it.
It’s going to be painful coming clean, Anonymous. In other circumstances, I might be inclined to duck this one myself. I don’t like causing people pain. Why not just let it go?
I don’t let it go because I am causing people even more pain by ducking it. We have to get this matter behind us. We are the luckiest generation of investors ever to walk Planet Earth. And we are living through an economic crisis caused by our unwillingness to tell people about the implications of the last 34 years of peer-reviewed research in this field. Huh? That makes no sense. Really.
We need to get past this. We need to open every investing discussion board and blog on the internet to honest posting re the last 34 years of peer-reviewed research. This is not elective. This is imperative.
You wouldn’t be going to prison if someone had done this before you came along, Anonymous. Each day that as a society we elect not to come clean, more lives are destroyed. Each day that more lives are destroyed, your prison sentence grows longer and more people are put in circumstances in which they will likely go to prison. This is a good thing how? It’s not a good thing. It’s a CATASTROPHE. We need to turn this around. We need to do this by the close of business today.
That’s my sincere take re this terribly important matter, in any event.
We now know how stock investing works in the real world. It was Jack Bogle’s dream to learn that. For the past 34 years he has had all the pieces to the puzzle. But he doesn’t make use of them because in an earlier day he didn’t have all the pieces of the puzzle and he thus got some stuff wrong and now he is too ashamed of the pain that he has caused millions of people to come clean. If you don’t find that sad, I would hate to know what you think of as sad.
Short-term timing never works. Long-term timing (price discipline) always works. That’s the story. That’s how it works. I am sure.
The only reason why everyone in this field does not shoot straight with their clients and readers re how it really works is that they are afraid to do so. Millions of investors have been misled by the Buy-and-Holders into making imprudent investment choices. It is too late for them to get all their money back and all along they have sensed that they were being sold a bill of goods (because it defies common sense to believe that price discipline is required in every market but the stock market but that through some magical process exercising price discipline when buying stocks is actually a bad thing). These people are going to explode when they learn the truth. They are going to be angry as hornets. So most of us keep it at least partially zipped.
It’s a national tragedy. I want no part of it. Find someone else.
Shiller doesn’t know half of what he would know about this subject had honest posting been permitted all along. The same is true of Bogle. And of Pfau. And of me. In ordinary circumstances, we all would be learning from each other. We all have been held back by the Ban on Honest Posting. There’s huge leverage in lifting the ban. When the ban is lifted, we all will give ourselves permission to tap into hundreds of insights that we have denied ourselves for three decades and then those insights will be used to formulate hundreds of additional insights. And on and on and on.
I don’t want to be intimidated when I post to an investing board. I can’t do good work when I am intimidated. To do good work, I need to be permitted to put forward honest work.
It’s the same with Shiller. And with Bogle. And with Pfau. And with every last one of us.
The intimidation has to stop.
That’s why we made financial fraud a felony. The announcement of prison sentences brings this ugliness to an end. The announcement of prison sentences brings on the Second Independence Day for the American people.
I can’t wait.
I naturally wish you all the best that this life has to offer a person, my old friend.
Rob