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 even a few things you say were true, why have you failed to get just one single person to come on here and say that you are right?
Because, if someone says that one of the things that I say is right, they know that they will be led by logic to saying that all of the things that I say are right. That puts them in the position of saying that the thousands of powerful and wealthy and well-connected people who have been promoting the Buy-and-Hold concept for many years got it wrong and caused great financial pain for millions of people. If Shiller’s Nobel-prize-winning research is legitimate research, it was the promotion of Buy-and-Hold that served as the primary cause of the 2008 economic crisis. How do you think it makes the Buy-and-Holders feel to hear someone say that? What do you think the career prospects are of someone who angers that many powerful and wealth and well-connected people?
The national debate re whether or not market timing is required should have been launched in 1981, when Shiller published his peer-reviewed research showing that there is precisely zero chance that an investment strategy that does not require market timing could ever work for a single long-term investor. Had it been done that way, the ideas that I talk about at this site would have gradually spread throughout the world and gotten slowly more popular over time and would probably be the dominant ideas today. The problem is that Shiller’s core finding was so at odds with the conventional thinking of the time (if the market were efficient, market timing would be a bad idea) that people’s minds just couldn’t take it in. People in this field suffered cognitive dissonance.
Which meant that they continued to promote the Buy-and-Hold idea that market timing is not required. The longer that continued, the harder it became to come clean. Now that the cover-up has continued for 40 years, it would look very, very very bad for the Buy-and-Holders for someone just t give voice to the obvious research-proven realities. So we are stuck.
We wont get unstuck by continuing to live in fear of you Goons. Those of us who believe that Shiller’s Nobel-prize-winning research is legitimate research need to work up the courage to speak honestly. On safe withdrawal rates and on scores of other critically important investment-related topics. There is no other way to get to the place where we all want to be deep in our hearts, a place where we all can take advantage of all the research available to us, both the pre-1981 research and the post-1980 research, and live richer and fuller lives from that point forward.
It shouldn’t take 19 years to determine whether or not the retirement study posted at John Greaney’s web site contains an adjustment for the valuation level that applies on the day the retirement begins, Anonymous. I mean, come on.
Rob
“Because, if someone says that one of the things that I say is right, they know that they will be led by logic to saying that all of the things that I say are right. ”
And to the opposite, when we see you say several things that are clearly wrong, then we look at everything you say with suspect and doubt.
Of course.
But there has never been one time in 19 years in which you have shown that I got something wrong. The only point you make is “well, other people don’t say these things.” That’s so. But you never consider the insane level of hostility you show when people do say these things (and there have been many, many occasions in which they have). The hostility silences people. You were hostile from the moment that I pointed out that the Greaney retirement study lacks a valuation adjustment. Insanely hostile. And entirely without cause. I have been proven 100 percent correct in my claim that that Greaney retirement study lacks a valuation adjustment. But it has not been corrected to this day. And the hostility has continued. If anything, it has increased. So we don’t have people saying it all the time. People are afraid to do so. But on every occasion on which someone has calmly looked at the study to determine whether or not it contains a valuation adjustment, the person has discovered that I was right all along on a very important point.
There has never been any intellectual debate. Every piece of evidence that we have looked at has lent support to the claim that market timing is always required. But, no, you don’t often hear people say that. The problem is not that it is not true or that the truth is not a terribly important one. The problem is that we have thousands of people who have built careers around the idea that market timing is not required or might not even always work. So there is huge institutional pressure to keep Shiller’s Nobel-prize-winning findings covered up.
The other side of the story is that, if Shiller is right that more than half of the value of today’s market is just irrational exuberance with no lasting economic substance, we are as a society going to get killed in the next price crash. We are going to see millions of retirements fail and hundreds of thousands of businesses go under and millions of people thrown out of work and a big increase in political frictions. And all of this will have been 100 percent unavoidable. All that we needed to do was to apply the same laws that apply in every field of human endeavor other than the investment advice field in the investment advice field as well and none of this bad stuff would have taken place. Permitting honest posting re the last 40 years of peer-reviewed research in this field is good stuff piled on top of good stuff piles on top of good stuff.
The “idea” that there might be some mystical, magical alternate universe in which market timing (price discipline!) is not always required for all investors is the worst mistake ever made in the history of personal finance. The amazing thing is that even our Buy-and-Hold friends would very, very, very much like to be released from the trap in which they find themselves so that they could direct their human energies to doing good for people rather than destroying their lives. But how do we get there? Tell the truth today and you make the Buy-and-Holders feel very bad about the 40-year cover-up. The only way out of the trap is coming clean and the cover-up has already gone on so long that coming clean is going to hurt some people terribly.
My answer is to do everything we can to make the Buy-and-Holders feel better about the mistake they made by pointing out the dozens of powerful insights that that they developed and shared with us all while being 100 percent unwilling to continue engaging in criminal behavior to keep the cover-up going. It will be interesting to see how it all play put.
My best wishes to you.
Rob
“But there has never been one time in 19 years in which you have shown that I got something wrong.”
All of your crash predictions were wrong. Which you acknowledged, but now seem to have forgotten.
“We are going to see millions of retirements fail”
Your retirement has already failed. Why can’t you admit that, and discuss what you are going to do about it? That would be far more interesting than your endless delusional talking points.
The crash predictions did not prove out. It’s important that people know that because making those predictions was a real-time test of the Valuation-Informed Indexing concept. I don’t think it is quite right, though, to say that those predictions were things that I got “wrong.” I said at the time that I made them that predictions often do not work out because short-term timing never works. If a crash never comes, then those predictions really were wrong. But, if a crash comes a number of years later than what was predicted and is bad enough that any reasonable person would wish that he had taken action in response to the prediction, then the prediction was not “wrong,” it was just off the mark re the particular timing, which is not terribly important. I certainly have never said that I believe that short-term timing works or is required or is a good idea.
If Shiller’s Nobel-prize-winning research is legitimate research, we all need to be engaged in market timing (price discipline!). We all should be working every day to get better at it. The best way to make progress is to open every discussion board and blog on the internet to honest posting re the last 40 years of peer-reviewed research so that we all can learn from each other.
My sincere take.
My best and warmest wishes to you.
Rob