Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“ I think that the last 40 years of peer-reviewed research in this field speaks for itself, Anonymous.”
You merely ignored what I posted and just repeating your nonsense.
If you put Buy-and-Hold above the peer-reviewed research, then the peer-reviewed research is nonsense.
If you put the peer-reviewed research above Buy-and-Hold, then Buy-and-Hold is nonsense.
I’m a research guy. Whachgonnado?
Rob
“ I’m a research guy. Whachgonnado?”
You said you are a journalist. What specific training do you have regarding investment research and analysis? I thought you said that you are not a numbers guy.
I am journalist who has bought into the idea that investors should be using the peer-reviewed research as a guide re how to invest. It was John Bogle’s books and articles that persuaded me of that one.
The trouble with using research as a guide is that research findings CHANGE over time. The research does not say the same thing in 2022 as it said in 1965. We learned something very important in 1981 — the market is NOT efficient, not only does market timing always work, it is always REQUIRED for investors to maintain the same risk profile at all times (that is, to Stay the Course in a meaningful way).
There is a negative to this from a marketing perspective. From a marketing perspective, people who work in this field want to be perceived as experts. It cuts against the perception of them as experts for them to say “Oh, you know how I once said that market timing is not always 100 percent required, please forgot that I said that, there’s new research out showing that I was wrong.” Buy-and-Hold is what SELLS (for as long as prices remain high), Valuation-Informed Indexing is what WORKS.
I don’t think that we can let marketing considerations totally dominate what can be said on the internet. We have millions of middle-class investors who desperately need access to honest and accurate reports re how stock investing works. I believe that we need to provide them to them. Call me madcap.
Turning a quick buck is nice. But turning a quick buck can’t become the entire deal. At some point, you need to permit a little bit of honesty to slip into the discussions. I believe that a good place to start is in reports of the safe withdrawal rate.
Rob
But you just made the claim that you are a research guy. You have previously claimed to be in the top 10 experts of investing. Despite these claims, you no formal training or education in this field. You also lack a track record of a successful retirement outcome. How are you in a position to make any kind of demands to others in the invest field? You don’t have any credentials. You are merely some guy making claims and demands. There is nothing to support that.
I have no credentials. That’s so. That’s a good thing in today’s investing world! This field is today corrupt from top to bottom. If I had credentials, I would have learned the same outdated stuff that everybody who possesses credentials learned and I would feel a strong pull to join in the corruption to keep investors from earning how bad most of the investing advice that I had been offering for years was. Do you think it is more important to have credentials or to be honest? I think it’s more important to be honest.
Who’s the true expert? I don’t possess credentials and I know nothing about any other aspect of the stock investing project other than the valuations question. But I think that it would be fair to say that I know more about the valuations question than anyone else alive. And the peer-reviewed research that I co-authored with Wade Pfau shows that getting valuations right is 70 percent of what it takes to be a successful long-term stock investor. If you are only going to know one thing re this subject, valuations is the best one thing to pick!
Is there anyone who knows anything close to what I know about valuations? Shiller is recognized for his expertise on that aspect of the stock investing story. But has Shiller ever pointed out that the Buy-and-Hold retirement studies get the numbers wildly wrong? I sure haven’t seen him say that. And I have been saying it consistently since the morning of May 13, 2002. So who’s the bigger expert? I couldn’t have done what I have done without Shiller first having done what he did. But it’s pretty darn important to get those Buy-and-Hold retirement studies corrected. And I think it would be fair tn say that I have done 500 times what Shiller has done re that particular matter. Yes?
I claim no expertise. Buy I am very proud of the work that I have done trying to get every discussion board and blog opened to honest posting re the last 41 years of peer-reviewed research in this field. I believe that that’s the answer to all of our problems. I am sure of it!
Rob
“I have no credentials. That’s so. That’s a good thing in today’s investing world! ”
Yet you point out the credentials of Pfau, Shiller, Kitces, etc. as points of credibility.
There mere fact that you say that you are not a “numbers” guy seems to immediately disqualify you.
Investors want to hear from people with credibility. So we need to see people who have credibility work up the courage to stand up to you Goons. It’s all downhill sledding from that point forward.
You don’t need to be a numbers guy to notice that the retirement study posted at John Greaney’s web site lacks an adjustment for the valuation level that applies on the day the retirement begins.
Rob
“ Investors want to hear from people with credibility. ”
And you don’t have any and also lack credentials, yet you think all the boards need to give you unfettered access despite this lack.
Evidence has already explained your error regarding Greaney. Learn to deal with it.
I don’t have credentials as an investing expert. But there is no requirement at any site that I have ever posted at that the people who post there possess such credentials. If I want to post honestly that I do not believe that the Greaney retirement study contains a valuation adjustment, I have every right in the world to say that. And, when Greaney and his Goon pals follow up with death threats, the site owner should take action to protect all community members from those tactics.
Evidence has said that he agrees with me that the Greaney study lacks a valuation adjustment. He has said that “nobody” truly believes that the Greaney study contains a valuations adjustment. He has said that that includes Greaney himself (although I have not heard Greaney himself say that). I think it would be fair to say that that statement nails it.
Rob
“ I don’t have credentials as an investing expert. ”
You said you are in the top 10 of experts. Now you admit lacking credentials. You wouldn’t let an inexperienced person operate on you. In similar fashion, you don’t risk your retirement on the advice of someone that lacks education and experience in guiding successful retirement outcomes.
A true expert would keep up to date re the peer-reviewed research. If a doctor said that he was going to use leeches to bleed me because he ignored all of the recent research, I would object. If the market were efficient, Buy-and-Hold would be fine and it would be reasonable to believe that the safe withdrawal rate is always the same number. Shiller published his Nobel-prize-winning research showing that valuations affect long-term returns 41 years ago. We need to move on.
Rob
So you are an expert, but then not an expert. It just depends on the story at the time. Got it.
“ We need to move on.”
We told you that 20 years ago, yet here you are repeating the same garbage.
So you are an expert, but then not an expert. It just depends on the story at the time. Got it.
Yes, these are exceedingly strange circumstances. In ordinary circumstances, I would not have the training that it would take to be an expert. But the people who have the training are not talking about the last 41 years of peer-reviewed research. So they are less expert than me. At least I am doing that much. The research shows that valuations is 70 percent of the stock investing story. Talking about that aspect of the story puts me far ahead of the people who have the training that in ordinary circumstances would qualify them as experts.
This is why I say all the time that we need to open every discussion board and blog on the internet to honest posting re the last 41 years of peer-reviewed research. It’s the only way out of this crazy mixed-up situation where people who are experts are not experts and where people who are not experts are experts. The biggest perceived problem today with permitting honest posting isn’t even the embarrassment that the Buy-and-Holders feel over having made a mistake. The biggest problem today is the embarrassment they feel over having covered up the mistake for 41 years. The best thing to do when you learn that you have made a mistake is to COME CLEAN about it and then get on with the rest of your life. The longer the cover-up goes on, the worse things are for everyone. Nothing can ever make things better but COMING CLEAN re the mistake.
The entire industry is corrupt, Anonymous. From top to bottom. Motley Fool should have taken action on Greaney the first time he advanced a death threat. But Greaney was popular! They didn’t want to miss out on the money he brought in as a result of his popularity. They didn’t approve of the death threats. But they were far more worried about the loss of money that would follow from taking action on the death threats than they were about the death threats themselves.
That’s a bull market! That’s what bull markets are all about! Bull markets are liars markets. They are a rejection of the human capacity to engage in reason.
OF COURSE you have to take valuations into consideration when calculating the safe withdrawal rate! Nothing could be more obvious. All the people who failed to do that didn’t fail to do it because they are dumb. They failed to do it because they want to believe in the Get Rich Quick fantasy that is today’s ongoing bull market. Permit honest calculations and the bull market dies. Permit honest discussion and people are going to do what is int their best interest and lower their stock allocation. Which will bring prices down and end the bull market. Which would permit us all to love better lives from that point forward.
Do we believe in the laws that permit us all to post honestly?
Or do we believe in the bull market that permits us all to pretend that we have accumulated more wealth than we really have accumulated?
That’s the question on the table. We want both things but the two things are in conflict. It’s a battle between reason/research and emotion/bull market prices. We will have to determine as a people which way we want to go with this. We can’t say that we support reason and permit a CAPE value of 35 to remain in place. The one thing cancels out the other.
When the CAPE value is 35, there is very little reason being permitted in the investment advice field. True experts are banned or terminated at such times. If they were permitted to speak, the bull market would come to an end. And who wants that, right?
Yes, I am a non-expert expert. I don’t have the background to be an expert. But I can’t stand the thought of misleading my friends re the safe withdrawal rate. That makes me far more of an expert than the people whose efforts have permitted the CAPE value to climb to 35. That CAPE value is a national scandal. It is not the product of a high level of expertise in this field. Call me dumb but I know that it’s wrong to lie to people about the numbers they are using to plan their retirements.
Rob
“ We need to move on.”
We told you that 20 years ago, yet here you are repeating the same garbage.
Until Greaney corrects the study, we are in the same situation we were in on the evening of May 12, 2002. The proper thing to do when you learn that you got an important number wrong in a retirement study posted at your web site is to correct that darn study. Greaney hasn’t done that. It was our collective decision to just let the fraud continue that got us into this mess in the first place. He is not going to take up one morning and say “Gee, I feel like telling the truth about safe withdrawal rates today.” We live in communities. Each member of a community has to do his part to make the community a livable, honest place to live.
It’s not just safe withdrawal rates. That’s not the only thing that the Buy-and-Holders got wrong. Their “idea” that the market is automatically efficient (that we don’t need to work to achieve rationality) is the biggest mistake ever made in the history of personal finance. It threatens t bring down our entire economic system, possibly our entire political system. You just cannot have a free society where people are putting money aside to finance their retirements and they are using studies that get the numbers wildly wrong and no one is doing anything to help because they are afraid of the criminal acts that the people who made the error will engage in if anyone says anything. That is just not a viable long-term state of affairs.
How about the 2008 economic crisis? That hurt a lot of people. If Shiller is right (I believe he is)), it was the relentless promotion of the Buy-and-Hold “strategy” that was the primary cause of that economic crisis. We need to tell people that so that we can avoid similar economic crises in the future. If we talk honestly about that, we are going to end up saying things that are going to cause people to question the numbers in the Buy-and-Hold retirement studies. It’s inevitable.
You cannot get something so basic as whether the market is automatically efficient wrong and not have it affect thousands of things in very serious ways. Once we learned that we had gotten that one wrong (that market efficiency is an aspiration, not something that is automatic and that it is an aspiration that is achieved with regular reminders that all investors always be sure to engage in market timing with the aim of keeping their risk profile constant over time), we should have all made it job #1 to get that one fixed. And part of that job would have been to get the numbers in the Greaney retirement study corrected before they hurt more people.
My sincere take.
Rob