Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
The 24 years refers to your plan. You are the promoter and advocate of VII, not Shiller. You have failed to show even one successful person that has implemented VII and have also failed to show one failure with buy and hold. Like I said, just one big waste of time.
The 2008 economic crisis is a HUGE failure associated with Buy-and-Hold. Permit honest posting and we would never again see a CAPE value high enough to cause an economic crisis like that. Stock prices are self-regulating in a world in which honest posting re the peer-reviewed research is permitted. When prices go up, the value proposition of stocks goes down. So people sell. That brings the price back to reasonable levels. When Buy-and-Hold is pushed relentlessly, rational investing decisions become impossible. Investors are not able to see how much damage they are doing to themselves by following a pure Get Rich Quick/Buy-and-Hold approach. So the only way that the market can get prices down (getting prices right is the core function of any market) is to crash them. A price crash takes trillions of dollars of spending power out of the economy, causing hundreds of thousands of businesses to go under and causing millions of workers to be thrown out of their jobs and causing political frictions to increase dramatically.
No Get Rich Quick/Buy-and-Hold for this boy. I am a big-time believer in letting people learn about what the last 39 years of peer-reviewed research teaches us about how stock investing works in the real world.
My best wishes to you, Anonymous.
Rob
“ The 2008 economic crisis is a HUGE failure associated with Buy-and-Hold. ”
Wrong. Buy and holders just kept buying and have made a fortune. Meanwhile, you stayed out of the market and fell even further behind and can no longer catch up.
There were hundreds of thousands of businesses that went under as a result of the 2008 Buy-and-Hold Crisis. Were the owners of those businesses winners?
There were millions of people thrown out of work in that crisis. Were those people winners?
We saw political frictions increase on both the left and the right as a result of that crisis — the Occupy Wall Street movement and the Tea Party movement were both fueled by it. Are we all better off because of the increases in political frictions that we have seen in recent years?
Please mark me down as saying that we need to open every discussion board and blog on the internet to honest posting re the last 39 years of peer-reviewed research in this field. Having millions of people invest their life savings in the stock market while discouraging market timing (price discipline!) is like driving a high-performance car down a highway with a high speed limit without brakes. Doing something like that always ends in tears. It is not safe to drive a car without brakes. And it is not safe to encourage people to invest in stocks without making clear to them how essential it is to practice market timing so that prices do not get out of control and bring on an economic crisis that causes an ocean of human misery.
Not this boy, you know? No can do. No freakin’ way, no freakin’ how. Not my particular cup of tea.
I do wish you all the best that this life has to offer a person, in any event.
Rob
“ There were hundreds of thousands of businesses that went under as a result of the 2008 Buy-and-Hold Crisis. Were the owners of those businesses winners?”
They went out of business due to debt and not the stock market.
The people hurt by 5hecmarket were market timers.
We disagree, Anonymous.
If irrational exuberance is a real thing, there were trillions and trillions of dollars of pretend money floating around in our economy in 2008. Naturally, that was going to cause a collapse sooner or later. In September 2008, that collapse happened.
There’s always going to be something else that you can blame for an economic collapse. A guy who was driving a car with no brakes could blame the toll booth for causing him to crash. I think that’s silly. If he had had brakes in the car, he could have handled the toll booth without too much of a problem. And, if we had done something to lessen the irrational exuberance, we could have handled any debt problem that came up. Market timing is the tool that we use to lessen irrational exuberance. So the key to everything is making sure that all investors always practice market timing (price discipline!).
My sincere take.
And my best and warmest wishes to you.
Rob
The 2008 financial crisis was due to the debt obligations in the high risk mortgage debt markets. It has nothing to do with stocks. To say otherwise indicates your lack of knowledge.
Okay, Anonymous.
I do wish you all good things, in any event.
Rob