Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
What is my beef with market timing schemes like VII? It doesn’t have a successful outcomes track record like Buy, Hold and Rebalance.
That’s a reason for not following it yourself, Anonymous. It’s not a reason for blocking other people from hearing about it. That’s where you cross the line.
I have zero problem with people who favor Buy-and-Hold over Valuation-Informed Indexing. There are many millions of good and smart people in that camp. I was once a Buy-and-Holder myself.
But we have to permit discussion of these issues at every investing discussion board and blog on the internet. Buy-and-Hold was dominant in 1981, when Shiller published his research showing that the market is not efficient. For the new model for understanding how stock investing works to gain support, there has to be widespread discussion of the issues. Until we have that, we cannot say that most people genuinely prefer Buy-and-Hold. Most people have only heard one side of the story. That ain’t the American way.
My sincere take.
Rob
If I have my own board on investing topics, do I have to allow you on my board to discuss VII?
Sure.
Why wouldn’t you?
If you are starting a board on investing topics, you clearly see merit in having people discuss investing. The only thing different about me from the Buy-and-Holders is that I believe that Shiller’s Nobel-prize-winning research is legitimate research. Having somebody who discusses the last 39 years of peer-reviewed research as well as the pre-1981 research obviously adds something important to the discussion. So what possible reason could you have for not encouraging me to participate in the discussions?
If you adopted a rule saying that no one could mention Shiller’s Nobel-prize-winning research, then I wouldn’t belong there. That rule would put people there on notice that they are not getting the full story. I think you would be crazy to adopt such a rule. But, if you had the rule, I think that would take things to the right side of the felony line because people would be put on notice that this was a very, very, very flawed board. But, if you did not have such a rule, I think it would be fair to say that people who ended up losing money because of your ban on honest posting would he very pissed about it and might sue you for damages. If I were on a jury hearing such a case, I would be very sympathetic to the person bringing the charge because it would be so outside the norms of American society to not permit posting on the last 39 years of peer-reviewed research. Huh? What the f?
Say that you are a confirmed Buy-and-Holder despite Shiller’s Nobel prize. Is there any harm that could come from permitting honest posting re that research? I sure cannot imagine what it might be. One possibility is that Fama is right and Shiller is wrong. In that event, this would surely come out in the discussions, which would be a big plus for Buy-and-Hold. There’s certainly no harm there. The other possibility is that Fama is wrong and that Shiller is right. In that event, that would surely come out in the discussions, which again would be a big plus for the Buy-and-Holders. If you are following a bad strategy, you want to learn that as soon as possible, no? It would sure seem so to me.
Every discussion board and blog on the internet should be permitting (and encouraging!) honest posting re the last 39 years of peer-reviewed research in this field, without a single exception. That’s my sincere take, Anonymous.
There’s a reason why every board and blog has language in its published rules permitting honest posting re the peer-reviewed research.
My best wishes to you.
Honest Posting Advocate Rob