“All Human Beings Want to Be Liked…. And So We End Up With Bull Markets. And the Bear Markets That Follow From Bull Markets. And the Economic Crises That Follow From Bear Markets. Shiller Showed Us the Way Out of the Craziness.”

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

So Bogle, Buffett and Shiller are all worried about job threats, death threats and getting banned from the boards, so they hold back. Got it.

All human beings want to be liked. All humans beings want to be able to work in the profession in which they have trained for years. No human beings enjoy seeing their words upset others.

I believe that these feelings of not wanting to go against the herd have been installed in our being by evolution. I believe that millions of years ago those who did not go along with the herd did not survive. So we all have this inclination to try to go along with majority opinions.

That’s why we have bull markets, Anonymous. We all would be better off if we did not have them. We all would be better off if we saw stock prices increase by 6.5 percent real every year without fail. But we don’t “vote” in the way that would serve our best interests. Some of us push prices higher and higher and higher, even to insanely dangerous heights. And the rest of us tolerate that behavior. Lots of us limit our participation in bull markets. But few of us actively try to stop them in their tracks. Few of us call out our friends and neighbors and co-workers on their b.s.

And so we end up with bull markets. And the bear markets that follow from bull markets. And the economic crises that follow from bear markets.

Shiller showed us the way out of the craziness.

But he hasn’t helped us in a practical sense because we have not yet given ourselves permission to post honestly re what the last 37 years of peer-reviewed research shows us re how stock investing works in the real world.

I think we are going to give ourselves permission in the days following the next price crash. I think that we are going to realize at that time that we don’t really have any other choice available to us.

We’ll see.

My best to you and yours.

Rob