“My Real Two Points Are: 1) Irrational Exuberance Is Real; and 2) Many People Don’t Want to Acknowledge That Irrational Exuberance Is Real at a Time When Stocks Are Insanely Overpriced Because Doing So Requires That They Acknowledge That Their Nominal Portfolio Value Is Not Even Close to Being Accurate.”

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

Seriously, you have only made two points in 20 years:

1. Your opinion on Greaney making an error (he didn’t)
2. Using CAPE to time the market

Your posts are just twists to each of those. Yet you can’t take the time to go work a job because you have to repeat those two things every day? Nope, you just don’t want to work.

Heck, most people don’t want to work. We still do. We wait until we have enough saved to retire.

My real two points are:

1) Irrational exuberance is real; and

2) Many people don’t want to acknowledge that irrational exuberance is real at a time when stocks are insanely overpriced because doing so requires that they acknowledge that their nominal portfolio value is not even close to being accurate.

The two points you mention follow from Point One. If irrational exuberance is real, Greaney got the safe withdrawal rate number wrong because he failed to account for the effect of irrational exuberance. And, if irrational exuberance is real, long-term timing must always work because knowing the amount of irrational exuberance present in the market price at a given time tells you in advance how stocks will be performing over the long-term (because irrational exuberance always disappears in time, being rooted only in investor emotion and not economic realities).

Shiller’s Nobel-prize-winning research changes everything we once believed about how stock investing works. We should be exploring the far-reaching implications of Shiller’s amazing research findings at every discussion board and blog on the internet, without a single exception. We not only should permit honest posting re the last 40 years of peer-reviewed research in this field, we should encourage it. Bringing an end to the ban on honest posting re the last 40 years of peer-reviewed research is the most important public policy issue before our nation today because the price crashes brought on by the relentless promotion of strategies that disdain market timing destabilize our economic and political systems. We need to pull together as a nation to overcome the criminal behavior of the various Buy-and-Hold Goon squads that have worked so hard to suppress discussion of the last 40 years of research.

My sincere take.

Rob