Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
You really don’t seem to understand the point. The adjustment is not needed. It is like pointing out that my car does not have a microwave oven installed in the dash. My car just doesn’t need it. How many times do people need to explain it to you.
I believe that Shiller’s Nobel-prize-winning research is legitimate research.
And it is not for you to decide. You can decide for you. Every other investor gets to decide for himself or herself after hearing both sides. No death threats. No demands for unjustified board bannings. No thousands of acts of defamation. No acts of extortion against academic researchers who “crossed” the Buy-and-Holders by doing honest research in this field.
That’s where I am coming from, Anonymous. My best and warmest wishes to you.
Rob
Anonymous says
“I believe that Shiller’s Nobel-prize-winning research is legitimate research.”
When did Shiller say that Greaney made an error? Answer: Never
Your problem is that you don’t know how to interpret research, nor do you include all historical information in your definition of research.
Rob says
He said that there’s a thing called “Irrational Exuberance.” It’s the title of his book.
If there’s a thing called irrational exuberance, the safe withdrawal rate cannot possibly be the same number at all times. It has to be a smaller number at times when there is a lot of irrational exuberance. Greaney’s retirement study says that the safe withdrawal rate is the same number at all times. Greaney’s study is in error.
Fair enough?
Even Evidence-Based Investing recently said that he does not believe that Greaney included a valuation adjustment in his study. Evidence is one of the generals in Greaney’s Goon Army. When you’ve lost Evidence….
Rob
Anonymous says
Shiller never said Greaney made an error. Same for Evidence…….and when YOU have lost Evidence and everyone else. what does that tell you?
Rob says
Shiller was kind enough to tell us all how stock investing works in the real world. He will be happy to spell it out for us and say the words “the safe withdrawal rate is not the same number at all valuation levels” once we as a society elect to apply the same laws that apply in every field other than the investment advice field in the investment advice field as well. There’s a reason why we have laws against death threats. They scare people. If you want to hear people like Shiller talk straight to you, stop engaging in behavior that scares them.
I applaud Evidence for acknowledging that Greaney got the number wrong in his study. I obviously disagree with his position that there is no need to correct the error. People use retirement studies to plan retirements. People who publish retirement studies need to correct them when they learn of errors that they made in them.
That’s my sincere take re these terribly important matters, in any event.
I naturally wish you all the best that this life has to offer a person.
Buy-and-Hold! Science! Stay the Course! 100 Percent Safe! Peer-Reviewed Research!
Rob
Evidence Based Investing says
“Even Evidence-Based Investing recently said that he does not believe that Greaney included a valuation adjustment in his study.”
That is an accurate description of my position.
“I applaud Evidence for acknowledging that Greaney got the number wrong in his study. ”
That is not an accurate description of my position.
My position is the same as yours
“We agree that Greaney calculated properly the rate that survived all existing 30-year historical time-periods.”
If you wish to see an estimate of future rates that survive then you need to produce that calculation yourself or find others to produce that calculation for you.
Rob says
I was suggesting that we have that discussion at the Retire Early board when I advanced my May 13, 2002, post. We saw a huge positive response to that suggestion. A large number of my fellow community members thanked me for starting the most exciting and helpful discussion ever held in that community. John Walter Russell spent eight years of his life working on that question and on related questions. Russell and I created a calculator together dealing with it. Wade Pfau devoted 16 months of his life to developing research with me on issues relating to it and we had that research published in a peer-reviewed journal. The interest in having the discussion is very intense and very widespread.
However, as strong as that interest is, the fear of you Goons is even stronger. People do not feel comfortable hearing death threats directed at their loved ones. People do not like to hear demands for unjustified board bannings directed at them. They do not like to see thousands of acts of defamation aimed at them. They do not like to see acts of extortion directed at academic researchers who have worked with them.
When as a society we work up the courage to stand up to you Goons, all of our problems re these matters will be in the past. I expect to see this happen in the days following the next price crash, when people will be able to see with their own eyes how much the widespread promotion of a pure Get Rich Quick/Buy-and-Hold investment strategy eventually hurts each and every one of us. I am not God. I could be wrong. But my sincere expectation is that the next price crash is going to open a lot of people’s eyes and cause enough of us to stand up to your Goons that we all will be able together to make the transition from Buy-and-Hold to the first true research-based investment strategy.
We’ll see.
My best and warmest wishes to you, Evidence.
Rob