A Rich Life

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

Valuation-Informed Indexing #593: Ten Characteristics of Irrational Exuberance

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I’ve posted Entry #593 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Ten Characteristics of Irrational Exuberance.

Juicy Excerpt: Irrational exuberance is temporary. Gains rooted in economic productivity are real and permanent and can be counted on to finance a retirement or some other important financial goal. Irrational exuberance gains are temporary. They always disappear in the long run.

 

Comments

  1. Ten Characteristics of someone that is suffering from delusions:

    1. They continue claim to be in the top ten of known experts in the investment world, despite lacking any education or experience in the field.
    2. They believe that everyone opposed to their ideas must be part of a mass conspiracy.
    3. They push market timing schemes, despite lacking even one successful outcome.
    4. They refuse to get a job, despite having family members and clearly pleading them to provide for the family.
    5. They make claims about being famous, making famous posts and/or be an author of material actual written by someone else.
    6. They make up stories about criminal acts and fail to back up claims with proof.
    7. They refer to well known experts as “con-men” .
    8. They send out thousands of emails full of lies to people they don’t know.
    9. They make up stories about getting future riches, like $500 million windfalls that are not based on any facts or reality
    10. They repeat the same lies about an error is a study, despite the fact that there was never an error.

  2. Yeah, yeah.

    And Greaney included a valuation adjustment in his retirement study after all. He’s just been too busy to craft a post pointing us to the section of his study containing it. For 20 years now.

    Rob

  3. “And Greaney included a valuation adjustment in his retirement study after all. ”

    You are the only one who thinks that.

  4. You acknowledged a few months ago (19 years late) that the Greaney study LACKS a valuation adjustment, Evidence. I have never heard Greaney himself say that. Have you?

    Rob

  6. I say that it needed a valuation adjustment. I believe that Robert Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns is legitimate research.

    If you believe that the market is efficient, as was widely believed at the time the Buy-and-Hold strategy was being developed, then your belief that a valuation adjustment is not needed would follow. If the market were efficient, Buy-and-Hold would be the ideal strategy. But I do not believe that the market is efficient. I believe that Shiller’s Nobel-prize-winning research is legitimate research. When I post on the internet, I need to say what I believe. Otherwise, I am committing fraud.

    Rob

  7. “ I say that it needed a valuation adjustment.”

    And no one else is saying that. Are you the dictator of the investing world? Do you even pay attention to why everyone says you are wrong? Of course not. Perhaps the fact you are ignoring that, while pushing your timing scheme is fraud.

  8. Lots of people have said it. Shiller’s research was published in a peer-reviewed journal and was considered so important that he was awarded a Nobel prize. I have had numerous top-name experts tell me that my stuff is top-notch material. We have seen thousands of our fellow community members express a desire that honest posting re the peer-reviewed research be permitted at every site. Wade Pfau described the Greaney study as “dangerous.” The Wall Street Journal had an article saying that the Buy-and-Holders are telling only half the story and describing the idea that stocks are always the best asset choice as “hooey.” William Bernstein, who is a confirmed Buy-and-Holder, said that the Buy-and-Hold safe withdrawal rate studies were off by two full percentage points at the top of the bubble.

    I am going to continue saying that it is not possible to calculate the safe withdrawal rate accurately without taking valuations into consideration. A 4 percent withdrawal is not always “100 percent safe” (Greaney’s phrase) and we shouldn’t lie to people about the numbers they are using to plan their retirements. A failed retirement is a serious life setback.

    My sincere take.

    My best wishes to you and yours.

    Rob

  9. You have lots of people saying it? Where are they? They don’t post here. They don’t say that they agree with you. The only one here with a failed retirement is you.

  10. Once we open every discussion board and blog on the internet to honest posting re the last 41 years of peer-reviewed research, we will be seeing thousands and thousands of posts every day talking about how best to practice market timing, how to make sure that that CAPE level never gets too much above 17. We will all be living better lives, We will be investing at a tiny fraction of the risk that we had to take on in the Buy-and-Hold years. We will be retiring years earlier than we ever before imagined possible.

    We are going to have to live through the next Buy-and-Hold Crisis to get there. That’s the scary part. And, yes, that part is very scary indeed. I think we will make it. Maybe that’s something that I tell myself because I need to believe it. But that’s my story and I’m sticking to it. But I think that Shiller did a wonderful thing that will pay off big time for all of us a bit down the road. And I believe that each and every one of our fellow community members who worked up the courage to stand up to you Goons did a wonderful thing too.

    Society’s learn new things over time. They move forward. It’s important that they do that. Stocks don’t need to nearly as risky as they have always been in the past. Most of the risk comes from our lack of awareness of the importance of market timing (price discipline!). We have the means to fix that — permitting honest posting re the last 41 years of peer-reviewed research in the investment advice field just as we permit it in every other field of human endeavor.

    I think we are going to get there. But we’ll see, you know? It’s not a sure thing until it happens and we are all living better lives as a result. There’s nothing automatic about this. It takes courage to stand up to you Goons. I don’t say different.

    My best and warmest wishes to you.

    Rob

  11. To sum up what you said is that you need all the boards to open up to you and then you will have all these people supporting you, the stock market will be fixed and your failed retirement will be fixed.

  12. All of that sounds right. But it’s not just me who benefits when we open every site to honest posting re the past 41 years of peer-reviewed research. Every person on the planet benefits big time. The Buy-and-Holders have a saying — There’s no such thing as a free lunch. That’s often the case. But it sure ain’t the case when it comes to learning new things. Learning new things is an AMAZING free lunch. When you learn something new, your life gets better and you don’t have to pay any price to make it happen. So I would permit honest posting at every site without a single exception.

    My best wishes.

    Rob

  13. “ All of that sounds right.”

    And that would effectively be a dictatorship are compelled to meet your demands.

    When you had access to boards before the mass bannings, nothing changed for you. Giving in to your demands won’t change a thing for you.

  14. We would be living under a dictatorship if we permitted honest posting re the last 41 years of peer-reviewed research in this field. That makes perfect sense.

    Rob

  15. “ We would be living under a dictatorship if we permitted honest posting re the last 41 years of peer-reviewed research in this field. That makes perfect sense.”

    It isn’t “permitting”. It would be forcing people to give you access. Secondly, calling it “honest” is just a label. Instead, your comments merely reflect your opinion. Thus, it would be no different than how Russia “permits” its media to give their “honest” view of the war in the Ukraine.

  16. The published rules of every site permit honest posting. The published rules of every site prohibit the use of criminal acts to intimidate people who “cross” the Buy-and-Holders by posting honestly re the far-reaching implications of Shiller’s Nobel-prize-winning research findings.

    My comments of course reflect my opinion. I would be engaging in fraud if I posted comments that did NOT reflect my opinion. If I were to say that I believe that the retirement study posted at John Greaney’s web site contains a valuation adjustment, I would be committing a crime. Financial fraud is a felony That means prison time. Um — thanks but not thanks, you know?

    My best wishes.

    Rob

  17. Where does it say that every board owner must give you full access to post what you want, while also allowing you to block people from posting? Thus, the dictator reference.

  18. Each site owner has the right to set the rules of posting at his site. I have never broken a single rule. And many community members have expressed a desire to hear what I have to say. So the site owner should permit that. You Goons on the other hand have posted in violation of the rules. The site owners make an implicit promise to protect those of us posting within the rules when they prohibit death threats and things of that sort. They should honor their word. They should enforce the published rules in a reasonable way.

    What do you think juries are going to say about it when millions of people have lost large percentages of their life savings as the result of this massive act of financial fraud and they bring civil suits against the site owners who permitted members of the Buy-and-Hold Goon Squads to continue this massive act of financial fraud? It’s not going to sound good for the site owners to say “Well, the pure Get Rich Quick/Buy-and-Hold stuff was very popular at the time given the insanely high CAPE values that applied and the peer-reviewed research was not popular at all.” Why have peer-reviewed research if we are not going to be permitted to talk about it?

    I think it is the addictive Get Rich Quick/Buy-and-Hold stuff that does more to take away our liberty than does the research-based Valuation-Informed Indexing stuff. Research liberates us by helping us to see truths about stock investing that our Get Rich Quick urge would like to see us deny. I don’t view the last 41 years of peer-reviewed research as dictatorial at all. I DO view death threats and acts of extortion as dictatorial.

    My best and warmest wishes.

    Rob

  20. There were no death threats. Greaney hasn’t corrected the error in the study in the 20 years since it was brought to his attention. But he never employed any death threats as part of his effort to continue the cover-up. That makes perfect sense.

    Rob