“People Who Understood the Implications of Shiller’s Work Were Being Penalized in Various Ways and People Who Continued to Promote Buy-and-Hold Strategies Even Though They Had Been Discredited by the Peer-Reviewed Academic Research Were Being Rewarded. Something Like That Doesn’t Happen by Pure Accident.””

Set forth below are the texts of two comments that I recently put to another blog entry at this site:

I am pretty sure in 2000 you weren’t banned.

The Ban on Honest Posting was in place long before I came on the scene, Laugh.

I obviously didn’t know about it on the morning of May 13, 2002. And I obviously can testify only to developments that have taken place since that date. But there had to have been a ban in place or we would not have seen the reaction we saw to my post of the morning of May 13, 2002.

Shiller published his research showing that valuations affect long-term returns in 1981. If valuations affect long-term returns, there is zero chance that a Buy-and-Hold strategy can work for a single long-term investor.

So everyone should have known by May 13, 2002, that there is zero chance that a Buy-and-Hold strategy can work. That obviously was not the case. So some sort of funny business was going on. I refer to that funny business as “the Ban on Honest Posting.”

People who understood the implications of Shiller’s work were being penalized in various ways and people who continued to promote Buy-and-Hold strategies even though they had been discredited by the peer-reviewed academic research were being rewarded.

I believe that in 1981 very few people appreciated the implications of Shiller’s findings. His work really was revolutionary. It takes some time for revolutionary findings to sink in.

Then the bull market came and people were not looking for anything better than Buy-and-Hold. The general feeling was that Buy-and-Hold worked just fine.

Since the crash there is a widespread desire for something better. But the cover-up has gone on for so long now that people feel a lot of embarrassment over it. So people feel funny talking about the 32-year cover-up. And of course we cannot move forward until we start talking about this stuff openly and honestly and clearly and completely.

Rob

Um, where does he show that? Did you ask him about that? I sincerely doubt he would agree that he showed anything of the sort.

You need to read the book “Irrational Exuberance,” Laugh. The entire book addresses this point.

If we didn’t have a Ban on Honest Posting in place, you would know the answers to all these questions without needing to ask me. And you of course would be a lot better off knowing the answers. Even if you elected not to follow Shiller’s model, you would be better off knowing about it. It is painful to realize that you don’t even know hardly anything about the thing that you have spent 11 years raging at.

In contrast, I know ALL ABOUT Buy-and-Hold. It would be impossible for anyone not to have heard every Buy-and-Hold principle 20 times. But people like yourself who have spent years discussing investing on the internet don’t know understand even the most basic principles of Valuation-Informed Indexing, the research-based alternative to Buy-and-Hold.

Something like that doesn’t happen by pure accident.

Rob