Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
William Bernstein does not time the market and says Rob Bennett is wrong.
If you dropped all the criminal stuff and all the non-criminal abusive stuff, Bill would be happy to participate in our discussions in a 100 percent honest way and we would learn what he really thinks about all these matters. Full truth be told, HE would learn for the first time what he really thinks re all these matters.
I was a Buy-and-Holder once. I detected some of the contradictions. But there were so many good and smart people who thought that Buy-and-Hold was a good strategy that I didn’t trust my own instincts. I finally worked up the courage to express my doubts out loud and then I saw that there were a good number of smart and good people who shared my doubts and that there was an insane amount of defensiveness on the Buy-and-Hold side of the table. So those doubts grew. And over time I was able to put all the pieces of the puzzle together and become a confirmed Valuation-Informed Indexer (which is just Buy-and-Hold with the one huge error (that market timing is not required) corrected.
Bernstein already believes that the Buy-and-Hold retirement studies get the numbers wildly wrong. That’s a good start. Chapter Two of his Nine Pillars of Investing book is the best concise statement of the case for Valuation-Informed Indexing that I have ever seen. So we are not going to have much trouble bringing Bill Bernstein on board once we open the internet to honest posting and he is expressing his sincere views and hearing lots of others express their sincere views. We just need to take that one critical step. We need to follow the laws of the United States in discussions of stock investing just as we follow them in every other field of human endeavor.
I think we are going to get there, Anonymous. In the event that stocks continue to perform in the future at least somewhat as they have always performed in the past, we will be seeing a devastating price crash in the not too distant future. That will give a lot of people the courage they need to stand up to you Goons. And then we are on our way. It will not be too long a time after that when we will see people like Bill Bernstein singing the praises of market timing to the skies. I am sure.
Perhaps not 100 percent sure. But pretty darn sure. The intellectual case for market timing is just too strong for me to imagine that we could not get a guy like Bernstein to join the party once he could see that it was safe to do so. And I think that it is going to become an entirely safe thing in the days following the next price crash, when irrational exuberance over Buy-and-Hold/Get Rich Quick becomes irrational depression over Buy-and-Hold/Get Rich Quick.
We’ll see.
Bernstein Fan (The Chapter Two Version!) Rob
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