Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
The last 20 years did not turn out as you said it would. Why should anyone listen to what you have to say?
The last 150 years did not turn out as you said it would. Why would anyone listen to what you have to say?
To be wrong for 150 years is worse than to be wrong for 20 years. And the 20-year thing (it’s really only 15 years) can be explained. We are going through a weird period. I have written several articles explaining why that is so. So has Jeremy Grantham. No Buy-and-Holder has ever offered an explanation for why there has been a correlation between valuation levels and long-term returns for 150 years now (if the market were efficient, there would be no correlation).
If someone wants to say that they are not going to follow my advice because the price crash has been long deferred, I have no problem with that. But you have to do something, you have to follow some investment strategy. And the pure Get Rich Quick/Buy-and-Hold approach has been doing great harm to stock investors ever since the first market opened for business. That’s hardly an improvement. If someone comes up with a third way that checks out, I will certainly take a look at it. As of today, there are only two models that are promoted as research-based. And 100 percent of the data available to us supports one of those models while 0 percent supports the other. I go with the model with 100 percent support. Call me madcap.
Rob
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