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The Old Ideas on Saving & Investing Don't Work -- Here's What Does

Buy-ans-Hold Goon to Rob: “[The Greaney Retirement Study] Doesn’t Need a Correction. That’s the Point. Thus, Your Entire Argument Fails Before It Even Starts.”

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

It doesn’t need a correction.  That is the point.  Thus, your entire argument fails before it even starts.

Do you believe that Robert Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns is legitimate research?

Rob

Comments

  1. Why would anyone let you post on their board when you don’t listen. You merely make the same comments and ignore what others say. You are unable to have a conversation.

  2. Is Greaney listening? He hasn’t even corrected his study yet. That’s the essential first step to there being a meaningful conversation between Buy-and-Holders and Valuation-Informed Indexers.

    Does Greaney believe that Shillert’s Nobel-prize-winning research showing that valuations affect long-term returns is legitimate research? If he does, he should correct the error in the study (it lacks a valuation adjustment!). If he believes that Shiller’s research is not legitimate, he should explain why within the text of the study. People who are thinking of using the study to craft their retirement plan need to know what they are getting into. Everything turns on whether or not Shiller’s Nobel-prize winning research is legitimate. So Greaney needs to be clear on why he views Shiller’s research as illegitimate.

    My sincere take.

    Rob

  4. Backatcha, Anonymous.

    There’s 41 years of peer-reviewed research to which you are not listening.

    It is my sincere view that that Nobel-prize-winning research is legitimate research.

    My best wishes.

    Rob

  5. “ There’s 41 years of peer-reviewed research to which you are not listening.”

    How many studies are included in your definition of “peer-reviewed research”?

  6. All of them.

    Shiller showed in 1981 that valuations affect long-term returns. Therefore risk is not constant but variable and the safe withdrawal rate cannot possibly always be the same number.

    That remains the scientific state of play until a new peer-reviewed study comes along that discredits the finding. And of course that has not happened.

    The Trinity study should have been denied peer-review on grounds that Shiller’s research showed that a valuation adjustment is needed to calculate the safe withdrawal rate. A lot of Buy-and-Holders ignore the 41 years of peer-reviewed research showing that market timing always works and is always required. But ignoring peer-reviewed research does not discredit it or make it go away.

    There was once a time when there were smart people who believed that there was peer-reviewed research showing that market timing does not work. But that was just a mistake. The research that they were thinking about only looked at short-term timing. So of course it did not say anything about long-term timing. The finding re short-term timing held up. But Shiller looked at the long-term and showed that long-term timing always works (saying that valuations affect long-term returns is just another way of saying that market timing based on valuations always works).

    Every day that passes without a refutation of Shiller’s findings makes them more compelling from a scientific perspective.

    Rob

  7. “ All of them.”

    Wrong. You are only commenting on your opinion of what one guy said. You haven’t made any scientifically based comparisons of data or outcomes. In fact, you lack any training that would have helped you understand your deficiencies.

  8. The “one guy” you are referring to was awarded a Nobel prize for his work. I believe that his research is legitimate. So that’s what I say when discussions of stock investing appear on the internet.

    I offer no apologies for doing so. I do apologize for being afraid to speak up from May 1999 through May 2002. I felt better about myself when I started posting honestly in May 2002. And so I have stuck with that.

    My best and warmest wishes to you and yours, Anonymous.

    Rob

  9. The “ one guy” told you to not use CAPE for timing the market and has also repeatedly said over the last decade to stay in the market.

  10. It’s not clear that Shiller ever said that. It is true that on one occasion he made an ambiguous statement that could be interpreted that way. But there were several occasions on which he made direct endorsements of market timing. And of course his entire life’s work shows how important it is that stock investors always practice market timing. If irrational exuberance is a real thing, then the value proposition of a stock purchase is obviously not the same at all times; there’s more value when irrational exuberance is low. It logically follows that investors who want to keep their risk profile constant over time need to be practicing market timing to have any hope of achieving that goal.

    This is why I have been saying for 20 years now that we need to open every discussion board and blog on the internet to honest posting re the past 40 years of peer-reviewed research in this field. If we permitted everyone to post honestly, with no criminal intimidation tactics whatever, we could get to the bottom of this in no time. Why not just invite Shiller to the Bogleheads Forum and ask him to say precisely what he believes about market timing and to submit to questioning from both Buy-and-Holders and Valiation-Informed Indexers. That would at least settle this one critically important aspect of the question, would it not?

    I believe that Shjiller would say that he believes in market tiiming. I doubt whether he would sign on to every statemnet that I have ever advanced. It would not be reasonable to expect that any two people would agree on every stock investing question. But I believe that Shiller would say that he is generally in favor os market timing and I think that hearing him say that in a very clear and complete way woulde be an advance for everyone . So I think we should go for it. I think that Shiller would say that he believes that the safe withdrawal rate is not the same number at all times but a number that changes with changes in valuation levels. That too would be a major advance with many exciting and far-reqaching implications re humankind’s understanding of how stock investing works in the real world.

    Shiller was awarded a Nobel prize. That suggests that he changed out understanding of how stock investing works in scores of important ways. Can you identify 10 ways in which Shiller’s research changes your understanding of how stock investing works? Can yoi identify three? Can you identify one?

    My best wishes.

    Rob

  11. “ It’s not clear that Shiller ever said that. ”

    It is crystal clear he said those words. You previously admitted it and then claimed he said it because he was threatened by goons (another of your made up claims). Your story changes yet again.

  12. He said something about timing. It was not entirely clear from the context whether he was referring to short-term timing or long-term timing. There’s a case that can be made that he was referring to long-term timing. The case is that he indicated that his position against timing was a reversal of an earlier position and he has never said that short-term timing works.

    But we need to have the statement fleshed out to be able to place any confidence in a belief that he was saying that he no longer believes that long-term timing works or is required. His entire life’s work was to show that market timing always works (that valuations affect long-term returns, which is another way of saying the same thing).If Shiller is rejecting his entire life’s work, we need to know why. That is a huge development. I am not willing to accept an off-the-cuff comment made in an interview as the sole evidence of such an extraordinary position.

    Shiller has devoted decades of highly respected work to showing that market timing always works and is always required. If he is going to reject that position, I want to know all the details of why he is doing that. And we have never seen anything other than than off-hand comment. So I certainly do not today buy into the idea that Shiller might not believe in long-term timing.

    Your behavior shows that you don’t believe it either, Anonymous. If you thought that there was anything more than a one in ten chance that Shiller would reject the need for long-term timing, you would have invited him to the Bogleheads Forum years ago and asked him that question. You don’t believe that he would say that if asked the question in a clear and direct way. I do not either.

    Yes, I 100 percent believe that Shiller has held back from making clear statements on these matters because he is afraid of the reaction that he would see from Buy-and-Holders if he did so. Shiller explains the theory behind Valuation-Informed Indexing in great depth in his book. There is not one word in the book about the far -reaching how-to implications of his amazing research. That is strange beyond comprehension. The only possible explanation is that Shiller is like just about everyone else that we have run into in this field (including me in the days before my famous May 13, 2002). He very much wants to help millions of investors by making them aware of the realities. But he also very much wants to avoid the insane wrath of the Buy-and-Holders that we have seen whenever someone works up the courage to address the matters in a clear and simple and direct way. So he hints at the realities but avoids stating them too plainly.

    Which hurts us all. It is my sincere belief that we all should want to know the realities of stock investing as revealed by the last 40 years of peer-reviewed research in this field. So we all should be 100 percent united in seeking an appearance by Shiller at the Bogleheads Forum where he would spell out in detail and depth what he believes re the market timing question. I believe that he would say that he supports long-term timing. But there’s of course only one way to find out.

    My best wishes to you and yours.

    Rob

  13. “ He said something about timing. It was not entirely clear from the context whether he was referring to short-term timing or long-term timing. ”

    And your story changes yet again.

  14. Yeah, yeah.

    We all need to know the real story and the only way we can get there is to open every discussion board and blog to honest posting re the last 40 years of peer-reviewed research.

    I am sure.

    Rob