I recently posted Entry #458 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Permitting Honest Posting on How Stock Investing Works Changes How Stock Investing Works.
Juicy Excerpt: Is there a giant conspiracy? Yes and no. I don’t believe that a bunch of people met in a room and decided to mislead. What I like to say is that there is a conspiracy of ignorance. Up until 1980, we only knew a limited number of things about how stock investing works and, given what knowing that limited number of things told us, Buy-and-Hold looked like a very plausible strategy. Robert Shiller changed that when he published his Nobel-prize-winning research showing that valuations affect long-term returns. If Shiller’s research is legitimate, stock investing risk is not stable but variable and investors who want to maintain a constant risk profile over time have no choice but to adjust their stock allocations in response to big valuation shifts. But most of us have not incorporated Shiller’s findings into our understanding of how stock investing works because the old understanding permits us to continue to believe that the numbers on our portfolio statement accurately reflect the true, lasting value of our portfolio and we like being able to continue to believe that.
Just like Rob, I can interpret what Shiller is really saying. For example, I see that noted Nobel prize winner, Robert Shiller, is once again calling Rob Bennett a liar. Rob Bennett has been telling people that this next crash is going to be even bigger than the Great Recession. In this recent article, Robert Shiller says that is not the case and that Rob Bennett is once again lying.
https://finance.yahoo.com/news/economist-robert-shiller-were-sneaking-back-into-the-old-2006-mentality-134537232.html
From the article:
“You have to remember, that the drop in home prices in the financial crisis was the most severe drop in the U.S. market since my data began in 1890,” Shiller said at the time. “I wouldn’t expect anything as severe as the great financial crisis coming on right now.”
And there you have it.
There’s a lot of desperation in this comment.
Your first sentence is a good one. You can indeed offer your own interpretations of Shiller, as can everyone else. That’s positive. That’s healthy. That’s helpful. What is not even a tiny bit helpful is when you advance intimidation tactics against those who offer interpretations other than your own. Do enough of that stuff and you find yourself on the wrong side of the felony line, which is not a good place to be.
At no place in that article does Shiller call me a liar. That is of course a false claim.
Shiller is commenting on how big the real estate crash will be. I have never commented on that. I think that it is likely that the next stock price crash will be much worse than the 2008 crash. It probably will take us to a lower CAPE value, since the 2008 crash only took us to a CAPE Value of 13, which is only a bit below fair-value levels. And it will almost certainly be a price drop that will remain in place much longer. So the pain experienced by the people living through it will be worse.
I don’t even see Shiller addressing that point in this article. If we were all thinking straight, we would all want to hear him address such points in great depth. Once you Goons are placed in prison cells, where you belong, I am 100 percent certain that Shiller will be helping us all out re these matters. He wants to help, just as Wade Pfau wanted to help and just as Bill Benrstein wanted to help and just as Michael Kitces wanted to help and just as Rob Arnott wanted to help and on and on.
We all feel a need to be protected from the sorts of individuals who have put up posts in “defense” of Mel Linduaer and John Greaney. That’s why we have laws against advancing threats of physical violence and against extortion and against financial fraud and all the rest. Once as a society we work up the courage to insist on criminal prosecutions, we will see every discussion board and blog on the internet opened up to honest posting re the last 38 years of peer-reviewed research in this field and we will all begin better richer lives from that point forward.
That’s Rob Bennett’s sincere take re these terribly important matters, in any event.
Rob the Liar
“What is not even a tiny bit helpful is when you advance intimidation tactics against those who offer interpretations other than your own. Do enough of that stuff and you find yourself on the wrong side of the felony line, which is not a good place to be.
At no place in that article does Shiller call me a liar. That is of course a false claim.”
I just did exactly what you do every day. Shiller is holding back, so I have to fill in the blanks as to what he means and what he wants to say, but is afraid to say. I am just posting honestly, just like you. Once you VII goons are in prison, the entire financial community will no longer be afraid about speaking as to the terrible mess we are in due to market timing schemes peddled by VII goons.
Once the intimidation tactics come to a full and complete stop, everyone will be saying what he or she believes. If we all were thinking clearly, that’s what we all would want. That’s why we have laws in place to assure that people cannot get away with the sorts of intimidation tactics that we have seen over the past 18 years.
I do wish you all good things.
VII Goon Rob
It is in your power, Rob. If you stop with the intimidation tactics, Rob, then hopefully the other VII goons will stop with the intimidation tactics. We need to be able to speak freely about the benefits of buy, hold and rebalance and avoid the big black mountain of those evil timing schemes being peddled by the VII goons. We can’t tolerate the massive fraud brought on by these VII goons. O way, no how, not this boy. I am not crossing that felony line, like those nasty VII goons.
Okay, Anonymous.
Nasty Rob