Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
” My objection to your behavior comes when you try to limit what others can hear about these matters. You get to decide for you. I get to decide for me. Others get to decide for others.”
What behavior? You are the one blocking posts on your website. If you can do so, why can’t others block you? Why a double-standard?
“There is not one academic model for understanding how stock investing works. There are two.”
No, there are not just two. There are so many different models out there, but you only focus on two.
The only two models for understanding how stock investing works that are rooted in peer-reviewed research that I know of are Buy-and-Hold and Valuation-Informed Indexing.
There are opinions that are put forward that are not rooted in either of the two academic models. But I left the idea of going with opinion-based strategies behind me a long time ago. I was frustrated with the multiplicity of opinions on this subject and then I heard about Buy-and-Hold and how it is rooted in peer-reviewed research and I knew that this was for me. It was The Great Safe Withdrawal Rate Debate that caused me to switch from Buy-and-Hold to Valuation-Informed Indexing.
Most Buy-and-Holders are proud of the fact that their model is rooted in peer-reviewed research (at least according to their belief). That’s the reason why The Great Safe Withdrawal Rate Debate has been so contentious. When I questioned whether the Greaney retirement study contained a valuation adjustment, I was really questioning the entire Buy-and-Hold Model. I did not intend to do that at the time. I did not even realize that that is what I was doing. But you Goons got it from the first moment. Over time, I came to see that you were right. I was questioning the entire model.
I of course see that as a good thing. Even if it turns out that I am wrong and that the Greaney study really does contain a valuation adjustment after all, the questioning generated lots of discussion and thus supplied us all with an amazing learning experience. I view my famous post from the morning of May 13, 2002, as my finest moment. What I said should not have been so controversial. The obvious thing to do was just to check the study and to see if a valuation adjustment could be found in it. I think it would be fair to say that the Buy-and-Holders don’t want to do that. For obvious reasons.
We would not have seen one-hundredth of the reaction that we have seen had I questioned one of the opinion-based strategies. The people who follow those strategies wouldn’t have cared that there was someone in the world who followed a different one. The Buy-and-Holders believe in research and they very much want to believe that theirs is the only true research-based strategy. So my question posed a major threat to them. Again, that was not my intent. I just didn’t want my friends to suffer failed retirements. But that’s what happened. If Shiller is right, Buy-and-Hold tumbles to the ground. His research findings challenge the premise of the Buy-and-Hold Model — that market timing is not required because stock investing risk is stable, not variable.
Rob
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