Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
News flash, Rob. It is not all about what you think. It is what the broader community thinks. Of course, you also think the community is not being honest or is holding back, yet that is just you again inserting your opinion.
What I think matters a great deal re one aspect of the question, Anonymous. I do not feel even a tiny bit comfortable posting dishonestly re the numbers that my friends use to plan their retirements. So, if I do not believe that the retirement study posted at John Greaney’s web site contains a valuations adjustment, I need to say that whether my fellow community members dare to do so or not. It is not ALL about what I think. But what I think influences my posting given that I do not feel comfortable posting dishonestly.
I agree with you that what the broader community thinks matters a great deal. If the broader community is not willing to insist on recognition of my right to post honestly, then you Goons can be successful in your efforts to get me banned from any board or blog at which I post. If my views are not heard, then in a practical sense the fact that I am posting honestly doesn’t matter much — no one is hearing those honest views. So in that respect, yes, what the broader community thinks matters a great deal. I don’t disagree.
I wish the broader community would insist on recognition of my right to post honestly. That’s what I have always wanted. It has not happened. I am not sure what you would have me do re this reality. I cannot change it. I have to accept it. I do. I don’t like it one tiny little bit. But I accept the reality.
I believe that the reality will change in the days following the next price crash. Stocks are today priced at two times fair value. A 50 percent price drop would just bring us to fair value. Following a 50 percent price drop, a fellow who today has a portfolio valued at $1 million would have a portfolio valued at $500,000. A fellow who today has a portfolio valued at $100,000 would have a portfolio valued at $50,000. And like that.
Will that change affect how millions view the question of whether honest posting on the last 36 years of peer-reviewed research should be permitted at every discussion board and blog on the internet? I sure believe that it will. I believe that many of my fellow community members will be stunned to see half of their life savings vanish into thin air. I think they will be looking for explanations of what happened to them. I think that the Ban on Honest Posting offers a pretty darn persuasive explanation. I believe that following the next price crash there will be as many people referring to Jack Bogle as “Saint Jack” as we have today referring to Bernie Madoff as “Saint Bernie.”
Could I be wrong?
It’s been known to happen. I believed on the morning of May 13, 2002, that the broader community would shut down you Goons within two or three days. I think it would be fair to conclude at this point in the proceedings that the joke was on me re that one. It is at least theoretically possible that that will prove to be the case re this other matter as well. I don’t expect to see it happen. But you never know, right?
It seems to me that we are just going to have to wait to see how things play out. I have a hard time coming up with any other realistic options to offer you at this point in the proceedings.
I don’t say that what the broader community thinks doesn’t matter. In fact, I think it would be fair to say that I believe that what the broader community thinks matters a great deal. I have put millions of words forward during the first 15 years of our discussions. I do that to persuade members of the broader community of the merit of the last 36 years of peer-reviewed research in this field. I wouldn’t bother if I didn’t think that what those people think matters.
I guess you could say that I don’t think that what those people think AT THIS POINT IN TIME matters enough to me to persuade me to post dishonestly. It does not. But the broader community may change what it thinks in response to the hit it takes in the next crash. And, even if I knew in advance that the broader community would never change what it thinks, I still would not to sacrifice my personal integrity by saying that I believe that Greaney’s study contains a valuation adjustment. So, even if the broader community didn’t change, I would still feel compelled to post honestly re these matters.
My personal view is that this stuff should not even be a tiny bit controversial. Honest posting is permitted in all other fields and no one even remarks on it. It is just taken as a given. Why is the investing advice field so different? I think it’s that darn Get Rich Quick impulse that resides within all of us. It makes us act contrary to our self-interest. That’s what makes this story so exciting. What Shiller has really done is to teach us what we need to know to for the first time in history act in our self interest when buying stocks. That’s no small thing.
Consider this one, Anonymous. Stocks are today priced at two times fair value. And there is now a Ban on Honest Posting in effect at every large investing board and blog on the internet. Do you think those are unrelated phenomena? I do not. If you ponder it a bit, I think you will see that we could never get to a P/E10 value of 30 without a Ban on Honest Posting being in effect. If honest posting were permitted, lots of people would tell us what the research says and that would cause us to sell stocks and that would bring the P/E10 level down to fair-market levels. It’s only the Ban on Honest Posting that permits us to continue acting in so self-destructive a manner as to push the P/E10 value up to 30.
The Ban on Honest Posting serves a purpose today. It’s not a constructive purpose. It is a self-destructive purpose. It is like the hiding place that an alcoholic uses to keep his addiction from being exposed. But it does serve a purpose. The Get Rich Quickers/Buy-and-Holders want to keep that P/E10 at 30 or thereabouts. And they can’t do it if we all gain the freedom to post honestly re the peer-reviewed research. So most of us go along with what has to be done to keep that P/E10 value at 30 even though it includes some pretty darn nasty stuff.
Does the alcoholic need a hiding place any more after he hits bottom and is lying in the gutter? It seems to me that he does not. There is no purpose served at that point in putting the bottles in a hiding place. So it is with Buy-and-Hold after prices have crashed. What good would it do anyone at that point to lie about this stuff? Once prices have crashed, you cannot keep them up by telling more lies. Once there is no need to feed the fantasy, it is my view that telling the truth re these matters will catch on like wildfire.
But we are going to have to wait to find out for sure. There’s no other way for me to persuade you that that is what is going to happen except for you to see it with your own eyes. And there’s no other way for you to persuade me that that is not what is going to happen than for me to see it with my own eyes.
Does all of that help at all?