Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
If Shiller told you that you should not use CAPE to time the market, would you finally admit that you are wrong about Shiller’s work? Do you think you know more about investing than Shiller?
That’s a super question.
If Shiller said that, I would tell everyone that he said it. Shiller played such a key role in the development of the Valuation-Informed Indexing strategy that anyone considering the strategy would need to know that he said that if in fact he did.
I would not necessarily say that I was wrong. If Shiller gave a reason for not using CAPE to time the market that I found persuasive, then I would change my mind and I would tell people that I now thought I was wrong about what I believed in the days before Shiller persuaded me. But I doubt Shiller would say anything that would persuade me. In that case, I would continue saying what I believe. I would let people know that Shiller has a different opinion in in fact he said that he did. But I would not say that I thought I was wrong about my own opinion.
I think it would be fair to say that I am the world’s foremost authority on two subjects: (1) The Valuation-Informed Indexing strategy, which I have been developing full-time for over 18 years now; and (2) The efforts by Buy-and-Holders to block millions of middle-class investors who very much want to and need to hear about these ideas from learning about them. Lots of people know lots more than me about all sorts of investing topics. But no one has put in the time and effort on those two that I have. There’s no one in a close second place.
I put the time in because I think those two issues are of immense important. People invest their retirement money in stocks. So we have to find some means of getting information about accurate and honest research-based strategies out to people no matter how bad it makes the Buy-and-Holders feel for us to do that. The process issue is more important than the substance issues. Because, once we solve the process problem, we will have thousands of people making great contributions on the substance side. I won’t be the foremost authority anymore in those days. And that will be a good thing. I SHOULDN’T be the world’s foremost authority on research-based investment strategies. It’s only because of the insanely abusive posting of you Goons that it became possible for me to attain that status.
I very much look forward to seeing Shiller’s book on the how-to aspects of his model for understanding how stock investing works. My guess is that we will be seeing that someday after we all suffer the horrible effects of the next price crash.
Rob
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