Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
And here you are making a case for buy and hold yet again. Why do I say that? Because buy and hold people held their stock and kept buying. Take a look where the buy and holders are today. They have been richly rewarded, while market timers have suffered significant financial harm.
You count the accumulation of more irrational exuberance in one’s portfolio as a “reward,” Anonymous. I do not. The more irrational exuberance there is in a person;s portfolio, the less able he is to engage in effective financial planning. You need to know how much you really have before you can determine how much you should spend or how much you need to save.
I believe that we should be permitting honest posting re the last 40 years of peer-reviewed research at every discussion board and blog on the internet, without a single exception.
My best and warmest wishes to you and yours.
Rob
Yet more proof that the market is not being driven by the buy and holders. It is the market timers.
https://www.wsj.com/articles/americans-cant-get-enough-of-the-stock-market-11619947800
It depends on what form of market timing you are talking about. It is certainly true that many people buy more stocks when prices rise because it excites them. That is the opposite of what they should be doing. That is a horribly bad form of market timing.
Rebalancing (the strategy recommended by the Buy-and-Holders) is not a good response. Investors who rebalance when prices are rising find themselves taking on more risk than they intended. The common-sense response is market timing in the proper direction. Investors need to lower their stock allocation when prices rise (and the long-term value proposition of stocks diminishes) and to increase their stock allocation when prices fall (and the long-term value proposition of stocks increases) If we all did that, stock prices would be self-regulating. Prices increases would cause investor to sell and the sales would bring prices back to where they should be.
Market timing is the brake on the stock investing car. Rip out the brakes, as the Buy-and-Holders advise, and you turn stock investing into a very risky business. A car NEEDS brakes to function properly. A stock market NEEDS market timing to get the price right. We should all always be encouraging investors to engage in market timing. The research-based kind, not the crazy kind that you are referring to.
My sincere take.
Rob
“ Rebalancing (the strategy recommended by the Buy-and-Holders) is not a good response. Investors who rebalance when prices are rising find themselves taking on more risk than they intended. ”
Wrong, it is just the opposite. Rising stock prices means the portfolio has more in stocks. Rebalancing would then move more from stocks into other assets, such as bonds.
Not enough to get your risk down to where you had determined it should be. To keep your risk profile constant when prices rise, you need to lower your stock allocation. That’s why I am such a big-time advocate of market timing. Market timing is magic It takes most of the risk out of stock investing while not sacrificing any long-term return.
Rob
“Market timing is magic”
Yes, it did an amazing job of making your savings disappear.
“ Not enough to get your risk down to where you had determined it should be. “
Historical returns show that you are wrong.
Yes, it did an amazing job of making your savings disappear.
You’re not even trying, Anonymous.
If stocks continue to perform in the future anything at all as they have always performed in the past, the next price crash will cause millions of failed retirements. Has everyone who worked in this field been encouraging market timing going back to 1981, something like that could never happen. Stock prices would be self-regulating in a world in which honest posting re the last 40 years of peer-reviewed research was permitted.
Name one other market in which there are any reasonable people discouraging participants in the market from engaging in price discipline. Take price discipline out of a market and in time you destroy it. It is no accident that, on every occasion on which the Buy-and-Hold “strategy” has become popular, we have seen massive losses of wealth and an economic crisis. It is a logical impossibility that things could turn out any other way once the brakes are ripped out of the stock investing car.
Rob
Not enough to get your risk down to where you had determined it should be. “
Historical returns show that you are wrong.
This is the precise question that Wade Pfau and I examined in the peer-reviewed research that we co-authored. Wade spent 16 months going through the literature trying to find one iota of support for the Buy-and-Hold claim that market timing doesn’t work and isn’t required. He found zilch. His concise conclusion at the end of the 16 months was that: “Yes, Virginia, Valuation-Informed Indexing works!”
Rob
“the next price crash will cause millions of failed retirements”
You’re so concerned about that. But totally unconcerned about your own retirement, which has already failed.
I am certainly concerned about the country that I live in, Anonymous. I make no apologies for it.
I am concerned about my personal retirement as well. I believe that, if I do right by my country, that will work out more than fine.
Rob
“ I am concerned about my personal retirement as well. I believe that, if I do right by my country, that will work out more than fine.”
Nothing has worked out for you over th3 last 20 years. What makes you think it will be different over the next 20 years?
Everything has worked, Anonymous. It has been just amazing.
We have had thousands of people express a desire that honest posting be permitted at every board. I have become the co-author of the most important research published in this field. Research that will help millions of people live better lives for many, many years to come. Are you joking?
And then we have the behavior of you Goons, If Buy-and-Hold were a real thing, you would invite challenges to it. You would want to learn. If I wasn’t confident that Shiller’s Nobel-prize-winning research was revolutionary stuff before I saw the behavior of you Goons, I sure would be after seeing that.
We all can begin living far better lives any time we choose. All we need to do is shut down you Goons,. And we already have laws in place to protect us from your most abusive tactics!
Does it get any better?
Rob
“ Everything has worked, Anonymous. It has been just amazing.”
If that was true, you would have millions in your investment account right now.
It doesn’t work like that. If a company spends 20 years coming up with a cure for cancer, it might not have any money coming in until the day it gets approval for the drug. That doesn’t mean that those years were a waste. They had to put that time and effort in to obtain the huge profits that will be coming to them.
Shiller’s research findings change everything, Anonymous, The shift from Buy-and-Hold to Valuation-Informed Indexing is the biggest advance in the history of personal finance. Do you think that I knew what I know today back on the morning of May 13, 2002? I did not. I knew that Greaney’s study lacked a valuation adjustment, that’s it. All the rest has followed because I put the time and effort in to figure this stuff out. I earned the $500 million and there is no reason to believe that I will not collect that amount of a much larger amount.
We’ll see, you know? Hang on to your hat! I have a funny feeling that it’s going to be a bumpy ride for my Goon friends!
Rob
“ I earned the $500 million and there is no reason to believe that I will not collect that amount of a much larger amount.”
If you earned it, you would have been paid by now.
“ We’ll see, you know? Hang on to your hat! I have a funny feeling that it’s going to be a bumpy ride for my Goon friends!”
We have seen it all played out. It didn’t work. If Buy and Hold performed like you have, you would be making headlines on a daily basis.
If you hadn’t seen many people show great interest in Valuation-Informed Indexing, you never would have advanced a single abusive post, Anonymous, You would just follow the same procedure that is followed in all other fields of endeavor. You would let them hear about Valuation-Informed Indexing and you would tell them about Buy-and-Hold and they would make up their own minds as to which strategy to follow.
And yet here we are, 19 years later. I can’t help but wonder why.
My best wishes to you, old friend.
Rob
If there was any interest in VII, you would have people posting here, in support, on a regular basis. I have only seen abusive posts from you. I also wonder why you are still doing the same thing for 19 years when you have had zero success.
It depends on how you measure success. If you measure success by dollar bills, then I have been a complete failure for 19 years. I give you that.
I don’t measure success that way. I agree that there is a correlation between success and dollar bills. If your work is important, it should result in financial compensation. But the financial compensation is the last stage in the recognition of the importance of the idea. Earlier signs that the idea is a successful one are that you see thousands of people expressing interest in hearing about it and you have researchers being awarded Nobel prizes and you have researchers declaring that, yes, Virginia, the idea works, and so on. I have seen all of that sort of thing over and over and over again. The universe has told me thousands of times that Valuation-Informed Indexing is the future.
Except it hasn’t brought me financial compensation. That’s what has to change. When that changes, everyone and bis brother will be writing about Valuation-Informed Indexing. I will be invited to be the keynote speaker at the FinCon events. There will be thousands of people posting at my blog every day. Obviously, that sounds good to me. So I need to be thinking about how to make that happen.
I’m not going to make it happen by engaging in self-censorship, by saying, “oh, now I see that my Goon friends were right all along, the Greaney study really does contain a valuation adjustment!” It is because people are afraid of the death threats and all the rest that Valuation-Informed Indexing did not become the dominant model for understanding how stock investing works many years ago. The longer that we live in fear, the worse things get. We need to return to the normal course of business. We need to behave the way people behave in every field of human endeavor other than in the investment advice field.
Once a significant number of us begin doing that, it will all be downhill sledding. Good stuff piled on top of good stuff piled on top of good stuff piled on top of good stuff. We are all in this together. We all want the same things. We all need to know how to invest our retirement money. We all need to stop being so fearful about standing up to the Buy-and-Holders and just say what we sincerely believe about the subject of stock investing, If I were to agree to post dishonestly, I would just make things worse, not better.
That’s where I am coming from, Anonymous. That’s my sincere take. I am going to let the world work this one out. My job is to see that my contribution is a positive one. So long as I post honestly and with a loving spirit (there is a reason why I extend my good wishes to you in every post I write), I am making a positive contribution. And I sincerely believe that the Greaney study lacks a valuation adjustment. So I am going to continue to say that when the subject of safe withdrawal rates comes up on the internet.
My best and warmest wishes to you.
Rob
“It depends on how you measure success. If you measure success by dollar bills, then I have been a complete failure for 19 years. I give you that.”
We can measure success in many ways, such as:
How many experts agree with you
Superior investment returns
Significant following on your board in the comments section/website traffic
People willing to pay you significant sums of money for your advice
You don’t have any of that. You continue to say that it will all come later. If you had anything of value, you would have started to at least see something happen for you, but you have nothing.
I have all of that.
I wrote to 30,000 academic researchers re the Wade Pfau story. Not one pointed out any problems in what I said. They did not all agree with me. Some wrote to tell me why they disagreed with me and we enjoyed helpful, respectful back-and-forth discussions, which of course was a plus. Others told me that they thought that my work was spot on, which of course encouraged me. A number said that the behavior of you Goons and the tolerance of it at many sites was well beneath any reasonable ethical standard.
If there were a legitimate case to be made that the Greaney study contains a valuation adjustment, someone would have made it by now. If there were a legitimate case, I would not have dared to write to those 30,000 researchers. I would have been afraid of being called out. But I knew from earlier experience on the various boards that no one on the Buy-and-Hold side has a case. So I went ahead and sent out those e-mails, And the fact that not one of the 30,000 researchers had any evidence that the Greaney study contains a valuation adjustment just made me that much more confident that I was right in what I said in my famous post of the morning of May 13, 2002.
My best wishes.
Rob
“I wrote to 30,000 academic researchers re the Wade Pfau story. ”
And how many of those researchers post here in your comments section? How many of those researchers have published anything about you and agreeing in any public forum in support of you?
Yet Wade Pfau took the time to make a post as to how you were wrong on Greaney. Wade Pfau also called out your abusive behavior and when it continued, he decided to cut all communications with you. That is not a good track record.
It is an extremely promising track record. All of the researchers who agree with me (and even the ones who disagree with me but who think it is fine to engage in respectful discussions with those with whom they disagree) would be posting here if it were not for the death threats and the acts of extortion and all the other nasty stuff that you Goons bring to the table. And we already have laws in place making that stuff criminal! How much closer to a huge breakthrough could you possibly get?
The crash will be horrible, That one terrifies me. But I believe that the crash is going to bring on the breakthrough that we all need to experience the greatest period of economic growth in our history. I obviously want to do everything in my power to see that we can turn all this unfortunate negativity in a very, very, very positive direction.
Wish us luck!
Rob
There are no death threats or any other kind of threats. Also, those researchers could post here anonymously. There is not one single piece of evidence to back up anything you say.
Greaney’s study is available on the internet for anyone who cares to check things out for himself or herself, Anonymous. The fact that a retirement study has remained uncorrected for 19 years after the error in it was made public knowledge tells the tale that needs to be told.
Rob
“Greaney’s study is available on the internet for anyone who cares to check things out for himself or herself, Anonymous. The fact that a retirement study has remained uncorrected for 19 years after the error in it was made public knowledge tells the tale that needs to be told.”
That has been addressed thousands of times, but you ignore it. Even Wade had to step in and correct your error on this.
At this point in the proceedings, I don’t believe that Greaney himself truly believes that he included a valuation adjustment in his retirement study. If Greaney truly believes that he had included a valuation adjustment, we never would have seen a single death threat or a single act of extortion. I mean, come on.
Rob
You don’t listen to anyone, so you will never learn. You have zero supporters and you feel no guilt in not supporting you family.
And I sincerely believe that the retirement study posted at John Greaney’s web site lacks an adjustment for the valuation level that applies on the day the retirement begins. And I care about the people who read my stuff. If I lie to them about that, that’s on my conscience, regardless of whether or not lots of other people agree to keep it zipped. I have to live with myself. I want to be able to sleep at night. So it is my intent to continue to say that the Greaney study lacks a valuation adjustment.
My best wishes.
Rob
I sincerely believe that you continue to live in this land of make believe and lies in order to avoid having to get a real job.
Okay.
I wish you all good things, in any event. I would like to think that that would help at least a tiny bit.
Rob
“I wish you all good things, in any event. I would like to think that that would help at least a tiny bit.”
To bad you didn’t wish good things for your family.
My family lives in the United States, Anonymous.
Rob