Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“That’s not so. He was referring to a lot of the dogmatic stuff put forward by the Buy-and-Holders.”
Show a link.
You show a link supporting your claim that he was referring to people engaged in market timing.
The easy way to solve this is to open the entire internet to honest posting and ASK HIM. Buffett would be happy to respond to questions, just as Shiller would be, if it is made clear that the discussions were going to be civil and reasoned. That means no death threats, no demands for unjustified board bannings, no acts of defamation, no acts of extortion. Lot of people are willing to help if you show that you genuinely want to know the answers to the questions, not just to bully people into pretending that everything you have ever said on the subject of stock investing is correct.
Greaney hasn’t corrected the error in the retirement study posted at his web site to this day. What does that tell us about Buy-and-Hold? An investment expert who does not correct errors is an investment expert that you do not want to be paying attention to. My sincere take. Making errors is fine. The only people who never make mistakes are people who never do anything. But not correcting errors after they are brought to your attention is not even a tiny bit fine.
Dial the Goon stuff back about 4,000 notches and Buffett (and lots and lots of others) will he happy to answer any questions you have. We should have started engaging in productive discussions re these matters back on the afternoon of May 13, 2002. That is why I proposed it at the time.
Rob
You say that you have thousands of supporters and mountains of evidence, yet we can’t find even one supporter and we can’t find even one single piece of evidence to support your claims. Either this is the biggest cover-up in the entire history of the world with millions of people actively colluding or you have made up everything. Which is more likely?
It’s a very big cover-up.
But the vast majority of people following or advocating Buy-and-Hold strategies believe in them. So I do not think that you could say that they are participating in a cover-up. They continue to believe because they have never heard the other side of the story.
Even you Goons believe in what you advocate and personally follow what you advocate. You demonstrate bad intent when you participate in criminal acts. But your intent is just to keep people from learning. You don’t make money when people follow bad strategies. You obtain emotional relief when the strategy in which you have a great emotional investment is not criticized.
The comparison that I make is to what would happen if someone came up with a pill that cured cancer. People who make huge salaries treating cancer using today;s methods might fight very, very hard to keep people from learning about the pill. They might even engage in criminal acts. But they also would probably rationalize, They would tell themselves that “the current methods are fine” or that “that pill might not work, people are better off not knowing about it.”
Shiller’s Nobel-prizei-winning research has presented our society with the greatest advance that we have ever achieved in the personal finance realm. But there are a good number of powerful and wealthy and well-connected people who very much do not want to see us achieve these advances, They no doubt tell themselves that they are doing good. But won’t help the millions of people who will suffer terrible setbacks in the event that stocks continue to perform in the future at least somewhat as they always have in the past.
The answer is to just permit honest posting re the last 40 years of research and let each investor decide for himself or herself which strategy to follow. None of us has the right to deny that option for millions of people.
If I had made up everything, you would be able to point to the section of the Greaney study that contains the valuation adjustment. Even Evidence now acknowledges that it cannot be done. Evidence now says that “nobody” truly believes that the Greaney study contains a valuation adjustment, including Greaney himself. I agree with Evidence re that one.
Did all of the investors in the Madoff fund “collude”? They just fell for a Get Rich Quick scheme and swore by it. That’s what is going on here, Humans were created with a desire to obtain something for nothing and the “idea” that we can count irrational exuberance gains as if they were real plays right into that. We like the Pretend Money and there’s a lot of money to be made telling people that their retirement accounts are a lot larger than they really are. When people like you, they buy from you. And people love being flattered.
My best wishes.
Rob
“It’s a very big cover-up.”
There is no evidence of that. We would have seen how all the information pertaining to you had existed and then was removed in total. What we all know is that it is impossible to erase everything from the internet as information is archived.
Evidence said that Greaney’s work does not need an adjustment, yet you conveniently leave that out.
There is no evidence of that. We would have seen how all the information pertaining to you had existed and then was removed in total. What we all know is that it is impossible to erase everything from the internet as information is archived.
We don’t disagree on the point you are making here.
Forget the stuff about me. Shiller’s freakin’ book is in public libraries all over the country. The title of the book tells the story that needs to be told — Irrational Exuberance. If irrational exuberance exists, not all stock gains are real. If irrational exuberance exists, people need to adjust for the effect of irrational exuberance when determining the value of their holdings.
The information is out there. But it doesn’t click with people unless they hear regularly and are able to ask questions about it and are able to absorb it over time. That’s what is missing. People need to talk about this stuff for it to have a practical effect and the Buy-and-Holders do not want to see that happen. When somebody says “the safe withdrawal rate is always 4 percent” and no one in the room objects, the people hearing those words thing “it must be so — I didn’t hear anyone object.” The normal thing would be for people who believe that Shiller’s Nobel-prize-winning research is legitimate research to reject. The cover-up lies in the suppression of those kinds of statements. For so long as those kinds of statements are suppressed, support for Valuation-Informed Indexing will not grow beyond the 10 percent of the population that today believes in it. The cover-up will come to an end when people are no longer afraid to say what they believe and the new way of understanding how stock investing works will begin to spread naturally and freely.
Rob
Evidence said that Greaney’s work does not need an adjustment, yet you conveniently leave that out.
I leave it out because it doesn’t make any sense. Shiller showed that valuations affect long-term returns. If valuations affect long-term returns, it is a logical impossibility that the safe withdrawal rate is the same number at all valuation levels. This is where we started. We are back to the morning of May 13, 2002.
That’s definitely my take, in any event.
Rob
“ We don’t disagree on the point you are making here.”
So what you are saying is that people can’t find actual links to death threats and criminal acts, but those things must exist because Greaney’s work has an error. Have I got that right?
I’m saying that links to the death threats and other criminal acts are available for people with eyes to see them. Most people are happy with the numbers on their portfolio statement. So they are not incensed by the criminal stuff. Most people don’t approve of it. But they tolerate it. I think there will be a larger number of people who will be incensed by them in the days following the next price crash. But there are not enough incensed today to cause effective action to be taken.
How people feel about the issues of substance affects how they feel about the issues of process. If all people acted effectively on the issues of process, we could never have a CAPE value of 39. But that’s what we have. That’s an extreme number. It’s the sort of number you get when there is a widespread indifference to both the substance problems and the process problems.
To fix the substance problems, we need to have calm, rational discussions. Most Buy-and-Holders are in favor of that. But some are not. And the ones who are in favor of having rational discussions do not today feel strongly enough about it to stand up to the ones who want the discussions stopped by any means possible. So the ones who want the discussions stopped (the Goons) possess an effective veto over what can be said about Buy-and-Hold on the internet. The evidence of how this veto has been enforced is available to those who care to see it. But most people are not today sufficiently upset to be spurred into action. They permit the unfortunate situation to remain in place through their complacency.
I am not complacent. I am alarmed by that CAPE of 39. But I am one person. I do not have the power to spur complacent people into action. I believe that people will be less complacent after the next price crash. But I am not God. I cannot say with absolute certainty. We will have to wait to see how things play out to know for sure. I think we will see different reactions to the criminal stuff in that day. The thing re which I agree with you is that the evidence is there today for people who want to see it. It has not been erased from the internet. The Get Rich Quick/Buy-and-Hold urge is strong enough that it can blind people to some things that you would not think they could be blinded to. The Get Rich Quick/Buy-and-Hold urge is a very strong urge, there’s no getting around that.
It’s a depressing reality to consider. But I still say that the news of the last 19 years is more good than bad. Not enough care to cause effective action to be taken today. But there is a small percentage that cares even today. And there is every reason to believe that that percentage will be larger after the price crash. And the substantive case is extremely strong. So I think we are going to make it to the other side. But I don’t think that we are going to make it to the other side prior to the next price crash. And the fact that the evidence of death threats and other criminal behavior is available on the internet does not change that.
I am shocked by that reality. But I have seen with my own eyes that indeed it is a reality. We are not all detached academics (even most of those who earn a living as detached academics are not that!) We are flawed humans who take comfort in telling ourselves that irrational exuberance gains are the same as real economic gains. We are hurting ourselves in many serious ways by doing that. But as of this point in time we do it all the same. Evidence of criminal behavior on the part of the Buy-and-Holders has not been enough to rouse us from our complacency. It is going to take another price crash to do that. The Get Rich Quick/Buy-and-Hold urge messes most of us up in very profound ways.
Rob
“ I’m saying that links to the death threats and other criminal acts are available for people with eyes to see them.”
We all have eyes, but only you can somehow see them. No one else has claimed to see them. Why is that?
Thousands of people have indicated that they see them over the course of the past 19 years.
Those thousands are not a majority. They are about 10 percent of the population. They are greatly outnumbered by those who pretend not to see anything. And a small percentage of those who pretend not to see anything have threatened to murder the loves ones and destroy the careers of those who speak out. The ones who have spoken out are scared to speak out a second time.
What effect will a price crash have? If it doubles the number who have the courage to speak out, I think we could bring this to an end and get the mistake that the Buy-and-Holders made in the 1960s (that was uncovered in 1981) corrected. We would all live better and richer and fuller lives from that point forward. Wish us luck!
Rob