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 about the research that refutes your conclusions from work done more recently than Shillers 1981 paper and concluded the following:
“Our search over economic relations that us to study the price divided by 30-year moving average of earnings may have stumbled upon a chance relation with no significance. In other words, the relation studied here might be a spurious relation, the result of data mining. Neither the statistical tests nor the monte carlo experiments take account of the search over other possible relations.
It is also dangerous to assume that historical relations are necessarily applicable to the future. There could be fundamental structural changes occurring now that mean that the past of the stock market is no longer a guide to the future.”
There are millions of good and smart people who still believe in Buy-and-Hold. Those people obviously need to be heard as well. When those people share their thoughts, they are helping. Those people are our friends.
But every last person on the planet should agree that the criminal stuff needs to be brought to a full and complete stop by the close of business today. There is no legitimate controversy re that one. The debate cannot produce good fruit until as a society we insist that both sides follow the laws of the United States in making their case. There is no place for death threats or for demands for unjustified board bannings or for thousands of acts of defamation or for threats to get academic researchers fired from their jobs.
Obviously.
I should add that those words sound like Shiller’s words to me. I am not sure. But it would not surprise me even a tiny bit if that turned out to be the case. That’s Shiller’s spirit — humble, willing to acknowledge that he does not know it all.
Think where we would all be today if Greaney had that spirit, if Greaney included a paragraph in his study noting that there is 39 years of peer-reviewed research showing that the market is not efficient and that therefore the safe withdrawal rate may be a number that varies and that all the numbers in his study may be wildly off the mark. If Greaney’s study had included such language on the morning of May 13, 2002, there would have been no hysterical reaction to my famous post, the Buy-and-Holders would have just said “oh, Rob must be one of those Shiller guys” and we all would have enjoyed an amazing learning experience. That’s the way it it supposed to work in these United States. That’s the way in which I believe it WILL work in the days following the next price crash, when millions of people will have suffered horrible life setbacks as a result of Greaney’s unwillingness to evidence Shiller’s wonderful humble spirit in his own work.
Captain Obvious Rob
Once again, Robert Shiller says that Rob Bennett is wrong.
https://www.reuters.com/article/us-health-coronavirus-shiller/your-money-coronavirus-fears-shake-yale-economist-robert-shiller-idUSKBN2163LD
Note that he never says that buy and hold has anything to do with the drop. It is all about Covid-19 and that there is risk now in all assets, except cash.
Again, thanks for the link.
Again, I find no fault with anything that Shiller says here.
Again, I think it would be a good thing if he stressed that the high CAPE value that applied prior to the appearance of the Coronoavirus put us at great risk that we would suffer terrifying losses in the event that something like this came along (which is something that sooner or later always happens).
Again, please mark me down as saying that Buy-and-Hold was certainly not the direct cause of the crash but that, in the event that stocks continue to perform in the future at least somewhat as they always have in the past, our failure as a society to practice market timing effectively will make it a much worse event than it would have been had we been permitting honest posting re the last 39 years of peer-reviewed research at every investing site on the internet.
Again. my best wishes to you and yours in any event.
Rob
The fact that Robert Shiller has NEVER blamed buy and hold, it makes your whole campaign worthless and lacking any support or substance.
He’s talked about irrational exuberance. It is the title of his book.
If there is irrational exuberance, it is something that hurts us all. It is something that we should all be working to diminish. It would be wonderful if Shiller and thousands of others did that on a dally basis. I certainly don’t think that it would help if I did less of that. We need more people making the effort, not fewer.
I have a chapter in my book titled “Robert Shiller Is a Failure.” I of course love and respect Shiller. All of my work is based on his research. So why would I call him a failure? I call him that because the CAPE value in recent decades has been higher that at any earlier time in history. Shiller’s research shows the horrors of irrational exuberance and yet it has gotten more out of control since his research was published. Huh?
That’s because of the factor that you point to. Shiller are many, many others are afraid to call the Buy-and-Holders out on their b.s. They try to be “nice” and not mention that the Buy-and-Holders made a terrible mistake in thinking that market timing is not required. We have to stop thinking like that. There’s nothing nice about it. The Buy-and-Holders were trying to help people and by making that horrible mistake they have instead ruined millions of lives. If they were thinking clearly, they would want us to point out their mistake and to do everything in our power to get it corrected.
Drop all the criminal stuff, Anonymous. Drop all the criminal stuff and tell Shiller that you have done so and ask him to come to the Bogleheads Forum and tell people there whether he believes that the safe withdrawal rate is always the same number. I am personally 100 percent certain what he will say if you do that. But there is only one way to find out, right?
We all are in the same boat. We all want to know how to invest effectively. Find out what Shiller really thinks re these matters and you are helping every single investor on the planet, including yourself.
I don’t think you will do it. But I wish you would. And I believe that Shiller is going to address the matter sooner or later, whether you do or not. Sooner is better for everyone, But this sort of thing just cannot be covered up indefinitely in a free society in any event. Not in Rob Bennett’s sincere assessment of the matter.
My best wishes.
Rob the Campaigner
“He’s talked about irrational exuberance. It is the title of his book.”
No, he has NEVER talked about buy and hold and that not only irritates you, but also undermines your whole story. Are you still expecting to get your story on the front page of The New York Times? Are you still expecting your $500 million windfall? How do you think either are still possible?
Yes, I still expect those things.
Shiller revolutionized our understanding of how stock investing works with the Nobel-prize-winning research that he published in 1981. In every other market that has ever existed, price discipline is 100 percent required. If anyone questioned whether price discipline is required in any other market, everyone would laugh at him. The stock market is the one big exception. In the stock market, investors exercise price discipline by engaging in market timing (changing their stock allocation in response to changes in valuations). But the idea that market timing might not work became popular because before Shiller there was a belief among academics that the market is “efficient.” If that were so, Buy-and-Hold (failing to engage in market timing) would be the ideal strategy. Shiller blew that one of of the water in 1981. Since then, it has been a cover-up. Our Wall Street Con Men friends don’t want to admit that they made a mistake. So they are in the process of destroying millions of lives with the relentless promotion of the Buy-and-Hold strategy 39 years after it was discredited by the peer-reviewed research.
Do I think that is going to change? Absolutely. It has to. Our economy cannot continue to function if we do not find some means to get honest and accurate investment advice out to millions of investors. This is not optional, it is 100 percent imperative. I believe that the only reason why it did not happen long ago is that we all have a Get Rich Quick urge residing within us and so we find a lot of appeal in the Buy-and-Hold lies. That appeal is going to diminish dramatically when prices fall to a CAPE of 8, which is nearly 70 percent down from where we were before the Coronavirus came on the scene. People are going to be angry at seeing their retirement hopes destroyed. They will all be a lot more willing to stand up to you Goons at that point and we all will be able to make enormous strides in our understanding of how stock investing works once we have placed you in prison cells, where you belong.
Once I learned that Buy-and-Hold is garbage (this happened for me on the evening of August 27, 2002, when John Greaney advanced his first death threat), I refused to write another word supporting that strategy. All of the work that I have done since is rooted in the Valuation-Informed Indexing strategy, which is identical to Buy-and-Hold in all respects except that it corrects the one error that the Buy-and-Holders made — it says that market timing always works and is always 100 percent required.
I have an encyclopedia’s worth of material on Valuation-Informed Indexing, which is the first true research-based strategy. Millions of middle-class people need access to this material. Nobody else has ever supplied it because everyone else is afraid of the criminal acts that you Goons employ to keep people in this field from offering research-based (that is, non-Buy-and-Hold) investment advice. I have a monopoly on the good stuff today. Not because I want to have a monopoly. Because everyone else is intimidated by the threats of physical violence and of career destruction that have keep Buy-and-Hold handing on for years after it was discredited by the peer-reviewed research.
My site goes 500 miles deep on how stock investing works. It is an amazing asset.
But it only goes about three inches wide because the penalty is so great for any other site that wants to link to my material. So the insights set forth here have not reaching many people.
That is going to have to change if our economic system is going to survive. So I think it is going to change. Lots of people love this country. As prices continue to drop, people are going to work up the courage to stand up to you Goons and things will begin getting better and better ans better for all of us. The site will no longer be only three inches wide — it will reach all over the internet. But it will still go 500 miles deep. Everyone in the country will enjoy an amazing leaning experience because of the thousands of powerful investment insights that I haves developed over the past 18 years by working with the thousands of our fellow community members who have a genuine interest in learning how stock investing works and in passing along what they learn to others.
After your prison sentence is announced, the long national nightmare is over, Anonymous. It will be all downhill sledding from that point forward.
My sincere take.
Downhill Sledder (Not Quite Yet, But Soon!) Rob