Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“hundreds of thousands of businesses will go under. Millions of people will lose their jobs. Millions of retiremens will fail. Political frictions will worsen. ”
We have already seen this with Covid. People that lack emergency savings will want to know how the government will bail them out (like they are doing right now) and those with resources will be picking up assets at bargain prices, making them even more rich. You already have 2008 as another example. We have already seen things play out, yet you still have nothing new and don’t see the obvious. Sitting around is not a game plan.
Covid has been rough. But that wasn’t something where we had 40 years of peer-reviewed research to help us avoid it. I see an important distinction there.
The 2008 crash would have been the same thing if it had remained in place longer. It scared people. But it did not scare them enough for us as a people to let go of the attachment to the Buy-and-Hold/Get Rich Quick stuff. For the current bull/bear cycle to come to an end, the CAPE would have to drop to somewhere near 8 and we would have to see that drop remain in place for five years or more. I am not saying that it is for certain that that would do the trick. I am saying that I personally believe that it would do the trick. And that I am not capable of playing it the other way in any event.
I would describe your position as a cynical one. I am not sitting around. I am responding to your comments here at the blog. I am writing a weekly column. I am finishing work on a book that I think it would be fair to describe as the most important book ever written in the history of personal finance. That ain’t nothing.
We all have questions in our mind when we are young as to what area of life endeavor we should direct our life energy. If it turns out that Shiller’s Nobel-prize-winning research is legitimate research (I believe it is), then the need to shift from Buy-and-Hold to Valuation-Informed Indexing is the most important public policy issue before our nation today. If I succeed in opening every discussion board and blog on the internet to honest posting re the last 40 years of peer-reviewed research in this field, I will have accomplished 50 times what I thought as a a young man was the most that I could accomplish in a single lifetime. I an live with that, you know?
It is a gratifying feeling to know that you can help millions of people and revolutionize the field in which you work with the work you do. It’s no fun standing up to you Goons, I will give you that one. But I have always believed that the good that there is to achieve here is 50 times more good than the bad that we have seen generated from the Goon side of the table, So I soldier on.
I hope that that is okay with you, my dear Goon friend.
I wish you all good things, in any event.
Rob
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