Set forth below is the text of a recent comment that I posted to the discussion thread for one of my columns at the Value Walk site:
His words are clear. Stop making things up. PERIOD.
His research is also clear. And his Nobel prize is clear.
I can accept that Shiller may not have a complete understanding of how long-term timing works. My sense is that he does not. He has a partial understanding. To make his understanding more complete, he needs to engage in daily back-and-forth with lots of people exploring the subject from lots of different angles. That’s how we humans learn.
It is this daily back-and-forth in which lots of us offer lots of different takes that has been missing in investing discussions for 35 years now and which has been holding up progress for 35 years now. I mentioned up above that Shiller has made it his life’s work to show why exercising price discipline is required when buying stocks. I have made it my life’s work to get this national debate started.
I have chosen to do this because having the national debate is so darn important. You are not wrong to point out that Shiller said that P/E10 should not be used for timing. He really did say that. It is an exceedingly odd thing for the person who discovered the importance of price discipline to say — it is only through the practice of long-term timing that investors can exercise price discipline! So we really need to get to the bottom of the issue that you brought to the table with your post.
Where we get on very different tracks is when you point out one aspect of the puzzle and ignore the other. Shiller really did publish research showing that price discipline is required back in 1981. He really did write a book explaining why Buy-and-Hold can never work for a single long-term investor. He really was awarded a Nobel prize for his work in this area.
We need to get Shiller to address these matters. You cannot do the subject complete justice and I cannot do the subject complete justice. We need Shiller to address the subject head-on in a clear and complete and firm statement. If you really believe that Shiller thinks that long-term timing does not work, you should feel comfortable encouraging him to address the matter.
You Goons have contact with Mel Linduaer and Mel Lindauer has contact with John Bogle. If you asked nicely, Lindauer would be willing to ask Bogle nicely to ask Shiller nicely whether he believes that long-term timing works or not. And Shiller is a nice man. Shiller would agree to the request if Bogle put it to him in a nice manner. So we have the means by working together to get a FINAL answer to this perplexing question.
The key is that you need to be open to hearing what Shiller really thinks. He may issue a statement agreeing with me rather than with you and Bogle. So you are taking a risk going ahead with this suggestion to contact Lindauer. I encourage you to do it. If Shiller says “this Rob Bennett fellow is a fool, I do not AT ALL believe in long-term timing, I think thus guy is dangerous,” I will write a column here reporting on what he said and putting that statement in the headline.
Working together, we could learn something important. Working together, we could advance the ball in an important way for lots of people. If you are game, I am certainly game.
I naturally wish you all the best that life has to offer a person in any event, my good friend.