“People Have Not Integrated Shiller’s Findings Into Their Thinking. If a Large Portion of all of Our Portfolios Is Comprised of Irrational Exuberance and Is Not Backed By Anything of Lasting Economic Significance, That Changes Our Understanding of How Stock Investing Works in a Fundamental Way. That’s Why Shiller Was Awarded a Nobel Prize. We Have As a People Only Touched the Surface of What Shiller’s Research Has to Teach Us.”

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

I still don’t get it. Everyone has heard of Shiller. He didn’t need or ask for any P.R. If there is any payment made, he should get it since it is his work, unless you have some king of license agreement with him.

Everyone in the investing field has heard of Shiller. But when I put up my famous post of the morning of May 13, 2002, pointing out the error in the Buy-and-Hold retirement studies, a lot of people reacted with great surprise. Huh? What was that about?

People have not integrated Shiller’s findings into their thinking. If a large portion of all of our portfolios is comprised of irrational exuberance and is not backed by anything of lasting economic significance, that changes our understanding of how stock investing works in a fundamental way. It changes absolutely everything that we once thought we knew about this subject. That’s why Shiller was awarded a Nobel prize. We have as a people only touched the surface of what Shiller’s research has to teach us.

John Bogle was an exceedingly smart man. I don’t think that there is any reasonable person who disagrees. But Bogle did not know what to make of Shiller’s insights. I was amazed when Bogle put forward his post semi-endorsing Valuation-Informed Indexing. He saw that there was too much merit to the concept to dismiss it. But he couldn’t square the fact that Valuation-Informed Indexing relies on market timing to deliver its amazing results with his longstanding disdain for market timing.

If Bogle could not figure something out, then I think it is fair to say that lots and lots of smart people could not figure that something out. So I am doing something important by putting these questions before people. It is by grappling with these questions that we all come to enjoy an amazing learning experience.

Shiller just got the ball rolling., We need to open every discussion board and blog on the internet to honest posting to tap into the full power of Shiller’s amazing research findings. That’s what I have been working on for 18 years now. No apologies, you know?

Shiller P.R. Guy Rob