Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
How much of that $500 million have you collected so far?
Not one penny, Anonymous.
And that’s a problem.
People respond to incentives. If you want to get someone to do something, give him a reward. If you want to get someone not to do something, give him a penalty. That’s how it works. Right?
Say that I had collected not $500 million but just $1 million. Would that have made a difference? It would have made a huge difference. If I had collected $1 million by promoting Valuation-Informed Indexing, I would be the keynote speaker at the next Financial Bloggers Conference. Everyone would want to know how I did it. And lots of people would want to go down the road that I went down. So you would be hearing about Valuation-Informed Indexing at every site on the internet. It would be wonderful.
I think you agree with me that it has not happened. That’s why you don’t hear about this stuff that often. When I first said “Greaney’s study doesn’t include a valuations adjustment,” people didn’t know what to make of it. Lots of people were able to understand why a valuations adjustment might be required. But they had never heard that criticism of the Buy-and-Hold retirement studies voiced before. So they thought that I must be missing something. If I were right, lots of others would have made that point long before I came along. They hadn’t. So they figured that I must be wrong.
I don’t think that I am wrong. I have a different explanation for why lots of others did not make the point before me. People need to eat. And the Buy-and-Holders are so abusive that they make it impossible for a person who advocates Valuation-Informed Indexing to make a living in this field. So there aren’t many of us around. So you don’t hear about it much.
I want to change that. I want people to hear about Valuation-Informed Indexing every day and at every site. How do we make that happen? I don’t think that I am going to make it happen by agreeing to shut up about my concerns about the Buy-and-Hold retirement studies. I think that I need to hang in there. I would never have had any problems if only there had been people who had come before who refused to back down when Buy-and-Holders attacked them for saying what they believed. If I want other people to hang in there and thereby help me, it seems to me that I need to hang in there and help others myself. That follows, does it not?
That’s why I never back down no matter how much pressure you apply. I want to make money in this field doing honest work. And I honestly do not believe that Greaney’s study contains a valuation adjustment. So I flat-out refuse to say that I believe that it does contain one. I insist on recognition of my right to post honestly about the flaws in the Buy-and-Hold studies and I encourage all others to do the same.
That’s the only way that things are ever going to change. Shiller did a wonderful thing by publishing Nobel-prize-winning research showing that there is precisely zero chance that a Buy-and-Hold strategy could ever work for a single investor. But has his work really done us much practical good? It has not. The CAPE level we saw at the top of the bull market is the worst one that we have ever seen in the history of the U.S. market. Shiller taught us amazing things. But most of us are not taking what he taught us into consideration when setting our stock allocations. That needs to change.
The only way that it can change is for more of us who believe that valuation adjustments are needed to insist on our right to post honestly. Each time one of us backs down, the Buy-and-Holders get stronger. And each time one of us sticks to our guns, the Valuation-Informed Indexers get stronger.I want the Valuation-Informed Indexers to get stronger. So I stick to my guns and I encourage all other Valuation-Informed Indexers to do the same.
That’s the story. I wish you all good things.
Sticking-to-His-Guns Rob
feed twitter twitter facebook