“Your Abusive Posting Is Evidence That Shiller Is Right. To Post Abusively Is To Give In To Emotional Impulses. We Should Be Talking About This Stuff On Every Site. The Buy-and-Holders Cannot Imagine Talking About Abusive Stuff Because They Cannot Imagine Talking About Emotional Stuff. But This Is the Stuff That Drives Stock Prices, According to Shiller’s Nobel-Prize-Winning Research.”

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:

You have said that we should avoid retirement failures and (as said above) be focused on effective investing. Those are your words. Why do you avoid taking about your track record and your own experiences? Don’t you think people can learn from your failures?

My investment strategies have worked fine, Sammy. If you presume that we are going to see a 60 percent price drop sometime over the next year or two or three, I am ahead of the game because I locked in a return of 3.5 percent real from TIPS and IBonds back when that was available.

The only reason why I need to reenter the work force is because of the insanely abusive posting of a small number of Buy-and-Holders (and because of the reluctance of the larger community of Buy-and-Holders to call them out on their abusive and in some cases criminal behavior.) The conclusion that people should draw from that is that there is something wrong with the Buy-and-Hold strategy. If advocates of the strategy believed that they could defend it in civil and reasoned discussion, they would avoid abusive tactics.

You follow the strategy, I am sure of that. To that extent, you have confidence in it. But you believe that the strategy will lose supporters if people who do not believe in it are permitted to make the case against it in civil and reasoned discussions. So your level of confidence is not at all high. That’s the worst of all worlds. You have enough confidence to go with the strategy but not enough to stick with it when your belief in it is tested, which is what will happen in the next price crash.

Please consider for a moment what it means that stock prices always drop to a CAPE value of 8 at the end of a bull/bear cycle That’s crazy. Why would we as a people elect to price our holdings at one-half of their fair value, making ourselves feel like we are much poorer than we are in reality? That’s just as crazy as the irrational exuberance we are living through today. It’s irrational depression. Do you know what brings that on? We get to those crazy low prices when the last Buy-and-Holder gives up and sells.

Shiller’s breakthrough is to show that stock investing is primarily an emotional endeavor, not entirely a rational endeavor. Your abusive posting is evidence that Shiller is right. To post abusively is to give in to emotional impulses. We should be talking about this stuff on every site. The Buy-and-Holders cannot imagine talking about abusive stuff because they cannot imagine talking about emotional stuff. But this is the stuff that drives stock prices, according to Shiller’s Nobel-prize-winning research.

Emotional (But at Least I Am Aware of It and Try to Rein It In) Rob