“Has Shiller Improved the Lives of People? He Has Not. The Measure of Whether He Has Improved the Lives of People Is the CAPE Value. Shiller’s Research Shows That a High CAPE Value Destroys Human Lives. A High CAPE Value Is Like a Cancer on Our Economic System. Today’s CAPE Value Is One of the Highest Ever Seen in U.S. History.”

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

It looks like Shiller did the work. Shouldn’t he be the one that gets the $500 million, instead of you?

It would make sense that we would both get $500 million. The shift from Buy-and-Hold is obviously worth a whole big bunch more than $1 billion to the people of the United States.

You are right in a sense that Shiller “did the work.” Shiller did the intellectual work. Prior to 1981, the academics believed that the market was efficient. If that were so, Buy-and-Hold would be the ideal strategy and the safe withdrawal rate would always be the same number. So Shiller did something of earth-shaking importance.

But I have have a chapter in my book titled “Robert Shiller Is a Failure.” I have devoted 18 years of my life to exploring the far-reaching implications of Shiller’s research. How could I say that he is a failure?

Shiller’s job is not just to provide intellectual insights. Ultimately, those insights serve no good purpose unless they improve the lives of people. Has Shiller improved the lives of people? He has not. The measure of whether he has improved the lives of people is the CAPE value. Shiller’s research shows that a high CAPE value destroys human lives. A high CAPE value is like a cancer on our economic system. Today’s CAPE value is one of the highest ever seen in U.S. history. We have had high CAPE values for 24 years running. This is the longest stretch of high CAPE values in U.S. history. Shiller’s powerful insights have not changed the way people invest. Not nearly enough.

What do we need to do with Shiller’s work to improve human lives? We need to promote it. We need to discuss it. We need to explore its implications. That’s a journalist’s function. That’s what I do. Or at least that’s what I try to do. I have not had as much success as I would have wished for because the criminal behavior of you Goons has been holding me back for 18 years now. But I have been giving it my best shot. And it is my intent to continue doing that until we break through the Big Black Wall of Ignorance and Complacency that is causing us all so much pain.

The part that I am doing — opening every discussion board and blog on the internet to honest discussion of the last 39 years of peer-reviewed research in this field — is every bit as important as the part that Shiller has done — publishing research showing that the key to long-term investing success is always, always, always practicing market timing (exercising price discipline!) when buying stocks.

We need both. We need the research and we need to have it widely discussed. Once the entire internet has been opened to honest posting, I have a funny feeling that we will no longer be looking at CAPE values of 30. Holy moly!

My best wishes to you, Anonymous.

Rob the Journalist