“If We Take a Vote, You Are Going to Win the Vote. We Essentially Have Already Taken a Vote. The P/E10 Level Is the Product of a Vote by the Community of Investors on What They Think of the Idea of Investing Rationally. Peer-Reviewed Research Is a Search for Truth. It Is Not Determined by Vote-Taking. The Truth Is Not Always Popular. But It Is Constant. That’s the Cool Thing About Truth. The Truth Has Staying Power.”

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

“We’ll have to wait and see how it all plays out in the days following the next price crash.”

Read the first post again. We already know how it will play out.

The vast majority of investors obviously believe that things are going to play out in the way that you are saying, Anonymous. We know that because prices are so high. Prices couldn’t get that high if most investors were exercising price discipline.

So, if we take a vote, you are going to win the vote. We essentially have already taken a vote. The P/E10 level is the product of a vote by the community of investors on what they think of the idea of investing rationally. Today’s P/E10 level is 30. We are as a people not too keen on the idea of investing rationally at this particular point in time.

Peer-reviewed research is a search for truth. It is not determined by vote-taking. The truth is not always popular. But it is constant. That’s the cool thing about truth. The truth has staying power.

The world changed in 1981, when Shiller published his “revolutionary” Nobel-prize-winning research. Those who care to now know the truth about stock investing. I believe that it is the most important public policy issue of our time that we get the message re the truth about stock investing out to every investor on the planet as quickly as is humanly possible. I believe we are going to do it (not anywhere near as quickly as I would like, but eventually, perhaps just in the nick of time).

I am shocked and amazed and surprised and saddened that we didn’t get to work on that important piece of business on the morning of May 13, 2002, when I put forward my famous post pointing out that there is no valuations adjustment in the retirement study posted at John Greaney’s web site. But I sure don’t see the issue as being any less important today than I saw it as being on the morning of May 13, 2002. What I have seen over the past 15 years tells me that it is a far more important project than I believed it to be on the morning of May 13, 2002. I still believe that we should be telling our friends the truth about how stock investing works. I will solider on.

I think it is going to play out just fine for all of us. As John Walter Russell once put it: “I believe that it is going to turn out better than any of us can now imagine.” I believe that even those of us who land in prison cells following the crash may in time come to see how their prison sentences were part of a process that had to play out for us all to protect the country we love from the economic crises that bring on the political frictions that hurt all of us. So we’ll see, you know?

I don’t believe that you are 100 percent confident that things will play out without a prison sentence for you. I believe that, if you were confident, you wouldn’t post here. Every post that you put forward just convinces me all the more than I am right in my beliefs about how things are going to play out.

What I believe determines my behavior. So that part is settled.

What determines your fate is how millions of middle-class investors react to losing 50 percent of their life savings in the next crash. We are all going to have to be a bit patient and then watch together to see how that one goes. No, we don’t know with certainty today. You SAY you know. But if you were confident in what you say, you wouldn’t even post here. Your actions tell a different tale than your words.

My best wishes to you.

Rob