“If Shiller’s Research Is Legitimate, Then Any Strategy Not Emphasizing the Importance of Market Timing Is a Scam.”

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

For more than a decade you have been confident that your VII will finally work and you have also been confident that you will get a settlement payment.  Unfortunately, none of that ever materialized.  It is obvious that you need another plan.

That’s like saying that the people who didn’t invest in the Madoff fund in the years before it was exposed as a fraud needed another plan because the Madoff fund made tons of money for a long time. No. Either Shiller’s Nobel-prize-winning research is legitimate research or it is not. I believe that it is legitimate research. So my plan is to tell people about it and to make money as a journalist doing that.

If Shiller’s research is legitimate, then any strategy not emphasizing the importance of market timing is a scam. Most people may not appreciate how much falling for the scam can hurt them until the scam is exposed in a price crash. But just about everybody will get it once the mountain of irrational exuberance disappears into thin air. You are the one who needs a new plan. Get Rich Quick strategies remain popular only for so long as prices remain sky high. And they never remain sky high indefinitely. Shiller’s research shows that.

I think my plan is a winner. Get Rich Quick/Buy-and-Hold remains popular today. I see that. But I do not believe that it is going to remain popular after it has destroyed millions and millions of lives. My plan for 19 years now has been to go with the research. That remains my plan. The pure emotion stuff just doesn’t appeal to me.

We’ll see.

Rob