Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“ If it’s so obvious, why hasn’t the study been corrected to this day?”
No correction was needed. You have been told that. Why do you keep asking the same question when you already know the answer?
Say that there is a one-in-a-hundred chance that the Greaney retirement study really does lack a valuation adjustment — just as I indicated in my famous post of the morning of May 13, 2002. If that’s the case, then we should be discussing the matter at every discussion board and blog on the internet. It’s not even possible to imagine a public policy concern of greater import. This affects every last one of us.
The next Buy-and-Hold Crisis is 100 percent avoidable. Not today, i suppose. We are going to experience a big recession any way you look at it (presuming that Shiller’s Nobel-prize-winning research is legitimate research). But, had Greaney corrected his study on the afternoon of May 13, 2002, we would have put the Get Rich Quick/Buy-and-Hold stuff behind us a long time ago.
And, even now, we could diminish the horrors of the next Buy-and-Hold Crisis by opening every site to honest posting by the close of business today. Prices don’t usually drop only to fair-value levels at the end of a bull/bear cycle. Irrational exuberance is replaced by irrational depression and prices drop to one-half of fair-value levels. If that happens, we are all in the soup. But if we get the word out about the last 40 years of peer-reviewed research, people will know that they should be buying stocks like crazy when prices drop to such insanely low levels and that could very well be the thing that turns the situation around. But we need to begin getting the word out now if we are going to expect people to act on it in the days following the next price crash.
My feeble human brain is not able to imagine any downside.
Rob
I sometimes wonder why you keep playing this game. Here are the only two reasons:
1. You have to keep the story going so that you avoid having to work and not upset your wife by telling her you have to stay home to save the world.
2. You continue to hope that the market crashes because you are jealous of the success of others and want them brought down to your level.
Perhaps it is a combination of the two. Either way, neither strategy helps you in the long run as you still need money for your remaining years. Given your age, you probably have at least another 20 years (maybe longer) that have to be funded. Since you destroyed your social security benefit, I am not sure how you are going to do that.
The shift from Buy-and-Hold to Valuation-Informed Indexing is the biggest advance in the history of personal finance. I want to help the millions of people who will live better lives once every site on the internet has been opened to honest posting re the last 41 years of peer-reviewed research. If knowing how stock investing works was not a big deal, Shiller would not have been awarded a Nobel prize for his amazing research showing that valuations affect long-term returns.
I felt like a creep from May 1999 through May 2002, when I was afraid to point out the error in the Greaney retirement study. I never want to feel like that again. I don’t want anyone else to feel like that. Heck, I don’t want Greaney to feel like that. If we had been permitting honest posting all along, Grearny would have learned what he needed to know to get the numbers in his retirement study right long before I ever came into contact with him. At the very least. he would have learned enough to include language in the study pointing out that there are lots of good and smart people who believe that it is not possible to calculate the safe withdrawal rate accurately without taking valuations into consideration. Even that much would have been enough to keep him out of prison, in my sincere assessment. So I believe that there should be a universal consensus that we insist on that much.
I believe that I will get paid. Big time. The worst case scenario is that I don’t get paid. In the worst case scenario, I am still far better off than I would be if I have to see the ocean of human misery that we always see with the arrival of another Buy-and-Hold Crisis knowing that I was too afraid of you Goons to try to do something about it. This way, I can sleep at night. That has a huge dollar value for me. And I sincerely believe that I will get paid on top of that.
My best wishes, etc.
Rob
Why make up a story about Greaney or anyone else going to prison. It just makes you look juvenile. Has it gotten to the point of desperation that is driving you to make such silly comments?
The study either contains a valuation adjustment or it doesn’t, Anonymous. It shouldn’t take 20 years to figure that one out.
Rob
“And I sincerely believe that I will get paid on top of that.”
No you don’t. Or if you do, you’re certifiably insane. No sane person could ever believe he will suddenly start getting paid millions for doing the exact same stupid stuff he’s been doing for 20 years while getting paid nothing at all.
So are you lying? Or are you crazy? These are the only two possibilities. Unless you want to pick all of the above.
It’s stock investors who are lying (to themselves as much as to others). It’s stock investors who are crazy (the term “irrational exuberance” suggests this). I am the one trying to bring an end to the lies and the craziness by opening every internet site to honest posting re the 41 years of peer-reviewed research that shows us all how to keep irrational exuberance under control (by encouraging every investor to practice market timing/price discipline at all times!).
Stocks are today priced at nearly two times their fair value. That gives a huge marketing edge to the Buy-and-Holders. It makes it look as if those of us who favor research-based strategies are taking money out of people’s pockets. That will no longer be so after prices have fallen to fair-value levels, as they always do. If prices fall to one-half of fair-value levels, as they have on earlier occasions when the relentless promotion of the pure Get Rich Quick/Buy-and-Hold “strategy” pushed them up to these levels, it will be the Buy-and-Holders who will then be taking money out of people’s pockets by claiming that the numbers on the stock portfolio statements are real. That’s the change that we are going to see in the days following the next price crash.
It will be interesting to see how it all plays out.
Rob
“I am the one trying to bring an end to the lies and the craziness by opening every internet site to honest posting”
And what precisely are you doing to make that happen (he asked knowing there was utterly no hope for a straight answer.)
In that cold dark place the rest of us call the “real world”, which you abandoned long ago, the only positive thing you are doing is providing small comfort to your handful of readers, who on our very worst days can say “at least I’m not Rob Bennett.”
I am making the case for opening every internet site to honest posting re the last 41 years of peer-reviewed research in this field. I have been doing that for 20 years running now.
You little thing about how people are able to say “at least I’m not Rob Bennett” is exactly the problem that we are all dealing with. We should be celebrating people who post honestly re stock investing. I performed a huge public service when I pointed out (on the morning of May 13, 2002) the error in the Greaney retirement study (it lacks a valuation adjustment). When I receive my $500 million settlement payment, we are going to see THOUSANDS of people pointing out the dangers of going with a pure Get Rich Quick/Buy-and-Hold “strategy.” We all need to hear that message daily if we are to overcome the Get Rich Quick/Buy-and-Hold urge that resides within all of us.
That’s the entire shebang. We now know how stock investing works. Can we work up the courage to overcome you Goons and help people understand the dangers of Get Rich Quick/Buy-and-Hold thinking? I believe that we are a good people. I believe that we will as a nation break on through to the other side in the days following the arrival of the next Buy-and-Hold Crisis.
We’ll see.
What I say on my worst days is: “At least I can sleep at night. At least I worked up the courage to point out the error in the Greaney retirement study after three years of failing to do so.”
Rob
I’m reminded of this quote:
“If you’re dead, you don’t know you’re dead. The pain is felt by others. The same is true if you’re stupid.”
Or crazy, I suppose.
(Not a death threat)
Okay, Miasma.
I wish you all the best that this life has to offer a person, in any event.
Rob
“ The worst case scenario is that I don’t get paid. In the worst case scenario, I am still far better off than I would be if I have to see the ocean of human misery that we always see with the arrival of another Buy-and-Hold Crisis knowing that I was too afraid of you Goons to try to do something about it. This way, I can sleep at night. That has a huge dollar value for me.”
This is the most likely scenario. How are you going to eat and pay the bills under this scenario?
If I say that I believe that the Greaney retirement study contains a valuation adjustment, that’s fraud. That’s a crime in the United States, a felony. That means prison time. Thanks but no thanks, you know?
I suppose that my meals would be provided in prison. Still, I feel better about myself staying on the right side of the felony line. I guess I’ll have to tough it out somehow (in the unlikely scenario that I don’t see a $500 million settlement check).
My best wishes.
Rob
Rob reminds me of the Trump voters who think the election was stolen. Some of the theories they come up with are so bonkers that no rational person could believe them.
I am convinced it is an emotional response. Our guy lost bigly, we just can’t accept it, therefore we will say that it is stolen, even though deep down, we know it isn’t true.
With Rob it is a case of he wasn’t able to convince people of whatever point it was he was trying to make. His efforts to do so ended up annoying almost everyone he encountered and he got banned for almost every board he tried to post at. He couldn’t accept this and demonstrated no ability or desire to change his behavior, therefore he pretends that everyone else is wrong and if the right circumstances come along he will be anointed philosopher-king, get hundreds of millions of dollars and he won’t have to admit he was wrong. Just like those Trump fans who think somehow he is still going to be installed as president.
I think that Trump was 100 percent wrong in what he did.
I have convinced lots of people. Thousands of people. But, no, not a majority. It’s about 10 percent of the population that today believes that Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns is legitimate research. In ordinary circumstances, that would be enough for us to post honestly and over time the 10 percent would become 20 percent and then the 20 percent would become 40 percent and so on. But you Goons feel too threatened by what the research shows to permit that normal, healthy process to play out. So you have used criminal behavior to frighten people into silence. And then you act as if the silence proves that you are right!
I think the 10 percent is right. I think that Shiller’s Nobel-prize-winning research is legitimate. I think the Greaney study lacks a valuation adjustment. So that’s what I say when the subject of safe withdrawal rates comes up on the internet. Sue me, you know. That’s what I sincerely believe. So that’s what I say I believe. I also believe that we are a good people and that we will as a people open the entire internet to honest posting in the days following the next price crash. But we’ll see, you know?
I hope there comes a day when we can throw back a few nice cold ones and laugh about the craziness of the old times, Evidence. I wish you well.
Rob
“ I have convinced lots of people. Thousands of people.”
I think you have convinced yourself, but that is about it. If you tell yourself a lie long enough, eventually, you will believe it. None of us have anything to gain or lose regarding what you do or not do to secure your financial future. That gives us the luxury of not having a bias and give you honest feedback. If you look at any of the major financial boards, this is just common practice. You don’t see other people making wild claims of goons, prison and $500 million windfalls. Instead, it is routine questions, answers and general comments/observations. There aren’t mass conspiracies.
The fact that lots of people don’t talk about the criminal stuff illustrates the problem. The core idea on which Buy-and-Hold is built is that investors are 100 percent rational. If that were so, prices would be set properly and market timing really would not be required. Death threats are emotional. So are acts of extortion. When we don’t talk about that stuff, we make Buy-and-Hold look plausible. If we all talked about that stuff whenever we saw it, we could as a society get our emotions under control and we would’t have a CAPE value of 33 hanging over our heads.
It’s never the Valuation-Informed Indexers behaving this way, only the Buy-and-Holders. I wonder why.
Rob