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:
Quote from your blog:
“But the bottom line is that she (Mrs. Bennett) is one of those darn humans and her fears poke through her goodness from time to time and cause her to believe crazy stuff. She says ‘What if Valuation-Informed Indexing doesn’t prevail in our lifetimes?’ or some such nonsense.”
First of all, that was in fact an excellent question. But more importantly, do you often dismiss your wife’s concerns as “crazy stuff” and her questions as “nonsense”?
No, I don’t.
But I do believe that it is crazy to believe that Valuation-Informed Indexing is not going to become the dominant model for understanding how stock investing works following the next price crash. Shiller was awarded a freakin’ Nobel prize in 2013. If you really wanted to stop this, you had to do something to stop him from being awarded a Nobel prize. It’s a little too late to get this particular genie back in the bottle, in my assessment.
My wife is a smart and grounded person. But she is one of those darned humans. So, yes, she is capable of having her fears poke through her goodness from time to time, causing her to say crazy stuff. I am too, to be sure. I was a Buy-and-Holder once. I failed to speak up about the errors in John Greaney’s retirement study for the first three years that I posted at the Motley Fool site. I don’t say that I am smarter or less crazy than my wife, just that I have watched this one play out from a front-row seat and that it is not too hard to see how things are going to play out in time if you are familiar with a lot of what has gone on over the past 15 years.
We’re all a little crazy in certain ways, Dan. We need to acknowledge that to be able to make sense of ourselves and of our world. When we try to convince ourselves that we are 100 percent rational (this is the Buy-and-Hold mistake), we end up putting pressure on ourselves never to make mistakes and we end up becoming MORE crazy. Paradoxically, it is the fellow who can acknowledge his own irrationality who is thereby best able to control it and it is the one who insists on perfect rationality from himself who goes totally bonkers.
This has been my experience in my travels through the Valley of Tears, in any event.
Take good care, man.