Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
I guess you are a victim, Rob. The entire world has conspired against you.
We are all victims in some ways, Anonymous. Just please keep in mind that we are all blessed in many ways as well.
Are the Buy-and-Holders not victims? They are responsible for many big advances in our understanding of how stock investing works. They got the market timing thing wrong. Not because they are dumb or evil. They got it wrong because they are imperfect humans. And the rest of us did not serve them well. Had we insisted that honest posting be permitted, the Buy-and-Holders would have learned over time and they would be much farther along in their understanding today.
I think we need to stop worrying about who is a victim and who isn’t and focus our energies on advancing in our understanding over time.
My best wishes to you.
Rob
There are no victims. We each have a personal responsibility in saving and investing for our retirement. We have all the information that we need at our finger tips. If your retirement fails, then it is your own fault. End of story.
We do not have all the information at our fingertips.
When I put forward my famous post from the morning of May 13, 2002, there were numerous people who thanked me for starting the most exciting discussion in the history of the Retire Early board. If people had all of the information contained in that post at their fingertips all along, what were they thanking me for? They hadn’t had the information contained in that post at their fingertips all along. I pointed out that the Greaney retirement study lacked a valuation adjustment. That was something new to think about that many people at that board had not considered.
When people considered that point, they lost confidence in the study. That was why Greaney got so upset. He wanted to maintain confidence in the study. And the point that I was making was undermining confidence in the study. Each time that someone points out the error at the root of the Buy-and-Hold project, it helps people to think more clearly about how stock investing works in the real world. It’s new information, valuable information.
There was a day when people did not know that smoking causes cancer. Research was published showing that it does, just like the research that Shiller published showing that valuations affect long-term returns. The tobacco companies went nuts. They threatened people who told people about the harm done by smoking, just as you Goons have threatened me for telling people about the error in the Greaney retirement study in particular and about the error in the Buy-and-Hold strategy in general. The con doesn’t work if people become aware of it. So the Buy-and-Holders have to keep the error hushed up. But I want to talk about it. I want to help people. A lot of the people who were being misled by Greaney had become friends of mine over the years.
If everyone has all the information at their fingertips, why do we even have academic researchers? Why not do away with them if we already know everything there is to know? We have researchers because we want to continue learning new stuff. Shiller’s research has taught us the most important thing that we have ever learned about stock investing — that market timing is always 100 percent required, that it is the secret to successful long-term stock investing. I want to spread the word all across the internet.
If all retirement failure are solely the fault of the person whose retirement failed. why do we have laws against fraud and against extortion? Those laws suggest that there are lines that those working investment cons should not be permitted to cross, that there is a point at which the retirement failure becomes the responsibility of the person working the con. I believe that those laws are good and necessary laws.
My best and warmest wishes to you and yours.
Rob
“ If everyone has all the information at their fingertips, why do we even have academic researchers? ”
They are not researchers. Research is making discoveries. What they are doing is analytics. This is why you have such a large disconnect.
Shiller made a discovery. He discovered that the market is not efficient, that valuations affect long-term returns, that risk is variable and that market timing is required. That’s huge. That changes the analysis of every strategic question that comes up in stock investing.
If you don’t get the question of whether market timing is required or not right, you can’t get anything right. That one is fundamental.
Rob
Again, it is NOT research. It is analytics. Research is supported by testing a theory. With analytics, you are making observations from data. What you also left out is Shiller said you cannot make predictions with CAPE and that you still need to stay invested.
Shiller has not said what you are saying he has said.
He has said that investors should generally remain investing in stocks at all times. I say the same thing. That doesn’t mean that he doesn’t believe that risk is variable and that investors seeking to keep their risk profile stable must engage in market timing. Shiller has advocated market timing. He said that investor who failed to lower their stock allocation in 1996 would live to regret it within 10 years.
Shiller has never made a clear statement as to whether CAPE can be used to predict long-term returns. He has in many occasions suggested strongly that he believes that predictions are possible. On one occasion, he offered some vague words indicating that he may have changed his mind. The normal thing to do in such a circumstance is for everyone who works in this field to ask him for clarification on this point. Have you ever done this? Are you willing to drop all of the criminal stuff and just ask some Shiller some questions in a non-hostile way for the purpose of determining his true beliefs re these matters?
You don’t want to hear what he has to say. That’s the problem. If we all hear what Shiller has to say, we will in not too much time be hearing what thousands of other people have to say. We will all be enjoying an amazing learning experience. That’s what I want. It is not what you want. Buy-and-Hold got there first and you feel that. so long as discussion of the last 40 years of peer-reviewed research is suppressed, Buy-and-Hold will remain dominant. A strategy that cannot survive open discussion is a gravely flawed strategy, in my sincere assesment.
Rob
Congratulations on getting every single thing wrong in your last post. It’s not surprising you lack any support.
Okay, Anonymous.
I do wish you all the best that this life has to offer a person, in any event.
Rob
Other than JWR, why hasn’t there been just one person that has said that they believe the death threats, job threats, extortion, etc or even has come out to say they support your VII strategy and use it for their own portfolio, or say they agree with your interpretation of what Schiller says?
Are they all afraid of those mystical goons, despite being able to post anonymously?
There have been thousands who have expressed a desire that honest posting be permitted. There have been hundreds who have said they see merit in Valuation-Informed Indexing. Some very effusively so. I have had numerous people tell me that they view me as the first person who has ever spoken about stock investing in a way that makes complete sense.
The intimidation stuff is very scary to people. There was a day when women were not permitted to vote. Why didn’t everybody speak up? Some genuinely supported the policy. But lots and lots of people were just afraid to speak up about something that was so deeply embedded into our way of life. Buy-and-Hold is deeply embedded into our understanding of how stock investing works. If we opened every site to honest posting on the last 40 years of research tomorrow morning, that would cause a massive price crash and an economic crisis. Would you want to be responsible for that?
People are intimidated by the social pressure to pretend that Get Rich Quick/Buy-and-Hold is just fine. The other side of the story, of course, is that, the longer the cover-up continues, the harder things will be for all of us when it finally is brought to a close, as it must be if our economic system is going to remain in place. So I vote for permitting honest posting. But lots of good and smart people have a hard time standing up to you Goons, given the circumstances that apply.
Had Shiller’s research come 20 years sooner, there never would have been any controversy. Had we known how stock investing worked before Buy-and-Hold came along, no one would have ever taken the idea seriously. But that’s not the way things played out. So we have to do things in his unfortunate, mixed-up way instead.
My best wishes to you.
Rob
I guess the rest of us have busted computers. We can’t find those thousands you speak of. Nor can we find the death threats or extortion threats. Our computers all say something different when we read Shiller’s words.
What do your computers say about Shiller’s findings? Shiller was awarded a Nobel prize for his work. So he must be saying something very different from what came before. What is it? What is he saying that is so different and “revolutionary” (that word appears in the subtitle of his book)?
Rob
Schiller doesn’t say what you have said. Of course you say that Schiller is too afraid because of the goons.
You didn’t answer the question. You don’t want to say what the advance was that Shiller brought about. The advance is that he showed that Buy-and-Hold can never work in the long term, that market timing is the key to long-term investing success.
And, yes, he does not say that as clearly as he should because we all have goonishness in us and it hurts out feelings to hear that over 50 percent of our investment portfolio is irrational exuberance of no real or lasting value. None of us likes to hurt our fellow humans. I get that part. But I think that we should be talking about the realities because in the end we hurt people more by not speaking frankly about these matters.
Irrational exuberance is not real money. It is pretend. You have to treat the irrational exuberance in your portfolio differently than how you treat the real gains. You cannot depend on the irrational exuberance to finance a retirement.
Shiller showed that. But, yes, I say it more clearly than Shiller does. For Shiller’s work to benefit us all, we all need to be talking about it in clear terms. So I say things as clearly as I am able even when it upsets people to hear the message. The very fact that so many are upset to hear the message tells me that we all need to be talking about this stuff more clearly than we have in the past.
Rob
In short, you agree that Schiller doesn’t say what you say. Got it.
Not everything that I have said is a precise repeat of something that Shiller said previously. But everything that I have said FOLLOWS from Shiller’s research findings.
That’s how we all learn. That’s how we advance the ball. I would like to see everyone alive on Planet Earth to feel free to say precisely what he or she believes re the implications of Shiller’s research. I certainly wouldn’t expect to hear everyone say that same thing. I would expect to hear lots of different viewpoints. And I would expect to learn from every one of them as we work together to comb through the possibilities, keeping some ideas, rejecting others, modifying still others. That’s what I believe works. That is what is missing today. That is what needs to change.
I believe that the safe withdrawal rate is a number that changes with changes in valuation levels. What do you think, Anonymous?
Rob
Your interpretation is just that. It is NOT what he has said. Anyone can come up with an interpretation.
And everyone should feel 100 percent free at all times to offer their interpretations when participating in discussions of stock investing on the internet. If I say that I believe that the Greaney retirement study contains a valuation adjustment, I feel that I am engaging in financial fraud re a subject of great importance to my fellow community members. Not this boy, you know?
My best wishes to you.
Rob