“I Believe Strongly That Shiller Showed Us All Something Important With His Research. He Would Not Have Been Awarded a Nobel Prize If He Had Not Done So. I Believe That Every Investor Alive Should Be Trying to Get Clear on What That Something Important Is.”

Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

What is funny is that after several years of watching your predictions fail time after time, you were asked about your predictions given your track record of failure. You stated that if a market crash did not happen by the end of 2015, we should all question using CAPE as a predictor as well as VII. Well, 2015 was a long time ago.

You keep telling us as to how some day you will be vindicated. Even if people see a temporary big drop in their portfolios, they are all so far ahead by not following your advice. These people would all be searching for jobs like you instead of enjoying retirement. What a horrible track record.

I agree in part re this one, Sammy.

I ask myself every night before I go to sleep if it is possible that I have missed anything. Lots of people do not agree with my views on stock investing and lots of people who were once friends have become angry with me over them. So I need to question whether I have gotten on the wrong track somehow.

The only thing that I have ever come up with that supports the Buy-and-Hold case is the missed predictions. You are certainly right that I thought we would see another stock crash a long time ago. I give you that one. And it does cause even me to experience a tiny bit of doubt.

I don’t agree that Buy-and-Holders will end up ahead even if we do experience the price crash that Shiller’s reseach indicates that we should be expecting. That one’s a math exercise. The three earlier bull/bear cycles that we have experienced in U.S. stock market history did not end until the CAPE level reached “8.” That’s a 70 percent drop from where we are today. If people going with high stock allocations experience a 70 percent price drop, they will not be ahead. That’s a crushing blow.

I believe that I will be vindicated. I absolutely believe that. Too many people have told me how excited they are about these ideas for me to believe otherwise. And even the behavior of you Goons tells me that I will be vindicated. If you possessed a deep confidence in Buy-and-Hold, we could have friendly discussions and try to learn from each other. You have never been willing to engage in friendly discussions with me, not one time in 17 years. That’s defensiveness. And defensiveness on your part is not a good sign for the investment strategy that you advocate.

I don’t say that I know it all. But I believe strongly that Shiller showed us all something important with his research. He would not have been awarded a Nobel prize if he had not done so. I believe that every investor alive should be trying to get clear on what that something important is. If some of us end up sticking with Buy-and-Hold after doing that, that’s fine. But we all should be seeking to develop a deep understanding of the far-reaching implications of Shiller’s Nobel-prize-winning research before deciding on what investment strategy to follow on a going-forward basis.

That’s my sincere take, in any event, dear friend.

Rob