Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:
Yes, it makes sense. What doesn’t make sense is for you to sit home playing the role of an internet troll for year after year, instead of working a job to support your family.
I was kidding around when I said that it makes sense, Sammy.
The last 35 years of peer-reviewed research is the most important 35 years of peer-reviewed research in the history of investing analysis. If we could go back in time, I am 100 percent certain that my good friend Jack Bogle would make a different choice when confronted a second time with the publication of Shiller’s “revolutionary” (Shiller’s word) research findings. Bogle loves his country. Bogle has devoted his life to helping people. Bogle believes in using the peer-reviewed research as a guide to one’s investing strategies. It is impossible for me to imagine that this great man would even consider any other option when faced with such a momentous decisions and when armed with knowledge of the consequences of making a bad choice (which Bogle would posses were he to be able to retain his memory of how things have actually played out when he took his trip backwards to 1981 in his time machine).
We all make mistakes, Sammy. One of the things that we all learn from experience is that the best thing to do when a mistake is uncovered is to come clean about it. Once one acknowledges a mistake, a great learning experience commences. When instead of coming clean, we go into cover-up mode, terrible consequences that one could not imagine when making that choice often follow. I think it would be fair to say that that is what happened when our good friend Jack Bogle made a decision in 1981 not to incorporate Shiller’s finding into his Buy-and-Hold Model (which would have transformed that model into the Valuation-Informed Indexing Model, the first true research-backed investing model).
Look at what happened to Hillary Clinton. If she could go back in time to the day when she was first asked a question about her private e-mail server, do you think that she would again choose to go into cover-up mode? I sure don’t. She could have come clean immediately and put the entire thing behind her following two or three days of news articles and the entire matter would ultimately have proven to have been no biggie. She was embarrassed and she thought she could get away with a cover-up and her friends did not dare risk her wrath by trying to advise her to take a wiser course and then an incredible series of events followed that ultimately placed her in the circumstances in which much of her life’s work has been put into disrepute. That all was good for Hillary Clinton how?
Bogle has advanced hundreds of powerful insights that have enriched all of our lives in important ways. I want to see the man get credit for those insights. To get that credit in a permanent way he needs to come clean re what the last 35 years of peer-reviewed research shows. It does not show that the market is efficient. It shows that valuations affect long-term returns, which means that risk is variable and not static and that investors therefore must be willing to adjust their stock allocations in response to big changes in stock valuations to have any hope whatsoever of keeping their risk profiles roughly constant over time.
That’s my sincere take re these terribly important matters, in any event.