Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“Valuation-Informed Indexing is a long-term strategy. “
Which is why I asked “What <b>long term</b> real return are they offering at the minute?”
If I am making a decision as to what my asset allocation should be today I am going to compare the long term returns being offered at current prices by stocks, bonds and cash.
The CAPE value that applies for stocks at the moment affects that determination. That’s the question on the table — Should investors take the CAPE value into consideration or not? If you ignore the CAPE value and just stick with the same stock allocation at all times, you are a Buy-and-Holder. If you take the CAPE value into consideration, you are a Valuation-Informed Indexer.
If the CAPE value is high, that makes stocks less appealing because high CAPE values translate into low long-term returns, It also makes cash-like asset classes more appealing because high CAPE values increase the probabilities of a price crash for stocks. Cash-like asset classes offer an amazing value proposition when stock prices crash because they protect one’s portfolio from suffering big losses at such times and permit one to invest more heavily in stocks when stock prices are highly appealing than one could if one were following a pure Get Rich Quick/Buy-and-Hold strategy. Following research-based strategies is a win/win/win/win.
Do you see?
Rob
“ Following research-based strategies is a win/win/win/win.”
You haven’t had a win yet. Does that mean your strategy isn’t really research based?
It means that as a society we have not yet reached the point where we are able to be kind enough to ourselves to rein in our Get Rich Quick/Buy-and-Hold urge. It’s my job to gather any material and insights that I can that will help to push us over the line in the days following the next price crash. That’s why I believe that I will receive a settlement payment of $500 million. Permitting honest postibng benefits everyone on the planet. And we are very close today. We need one person to stand up to you Goons and to continue posting honestly re the peer-reviewed research no matter what. I was elected. So I continue to do what I can do.
Rob
“ I was elected.”
Who elected you?
The Universe. Fate. Evolution. God. Whatever you care to call it.
I was placed in circumstances in which I either had to sell out my friends at the Retire Early board by pretending that I believed that that the Greaney retirement study contains a valuation adjustment or post honestly and thereby bring down the wrath of you Goons. I didn’t ask to be placed in that situation. If there hadn’t already been a 21-year cover-up of Shiller’s Nobel-prize-winning research on the morning of May 13, 2002, there wouldn’t have been a peep of objection when I suggested that the board community explore what the safe withdrawal rate was when valuations were taken into consideration.
Faced with those circunstances, I chose to post honestly. No regrets. I don;t take it back. We’ll see where it takes us in the days following the next Buy-and-Hold Crisis. My personal belief is that it is going to take us to some absolutely amazing places. But we’ll see, you know?
Rob
In short, no one elected you. Got it.
Hey, I just elected myself as the Chief expert of all investing. I have decided what constitutes peer reviewed research. I have decided what is honest posting, I have decided to change all historical posts to what I believe they said. I have decided that everyone needs to open their boards to me and let me post what I want. I don’t have to behave myself. I don’t have to answer questions. I don’t need to support my comments with facts. I have determined that anyone that disagrees with me is a goon and will go to prison. Before you head off to prison, give me $590 million because I am broke and don’t want to work.
I naturally wish you all the best that this life has to offer a person regardless of what investment strategy you elect to follow, Anonyumous.
My warmest wishes to you and yours.
Rob
Hey Rob. With the new book coming out, are you planning on attending FinCon this year?
No. I will not be attending FinCon this year.
I attended five of those events. I know from the many people I spoke to that there is widespread interest in what the last 41 years of peer-reviewed reseatch teaches us all about how stock investing works in the real world. I gave a presentation on Valuation-Informed Indexing at one of the events. There were five or six people who came up to me after the presentation with effusive comments. We sat at a table and drank beers together for several hours. So the market is there.
But, as is so at all of the boards and blogs, the percentage of the FinCon population that believes that Shiller’s Nobel-prize-winning research is legitimate research is about 10 percent. We need to get that number up to make good things happen. I believe that the number will increase in the days following the next Buy-and-Hold Crisis In the event that stocks continue to perform in the future anything at all as they always have in the past, we will be seeing millions of lives destroyed as the result of the relentless promotion of the pure Get Rich Quick/Buy-and-Hold “strategy.” I believe that, when the consequences of Get Rich Quick/Buy-and-Hold become clear to everyone, there will be more people who will work up the courage to to speak up.
Then I will be attending FinCon events again. And of course posting at all of the boards and blogs.
Rob
If the market is there and you have supporters, you should go. Why would you not?
The supporters are afraid to speak up. I have had many people tell me privately that they think I am right on. But they don’t want to say that at their blog or to give a talk at the conference saying that. So the fire never gets going.
You Goons are about 10 percent of the Buy-and-Hold population. But you have influence far beyond your numbers because the Normals are afraid of you. When that changes, the floor collapses on you. But there’s nothing that I can say that will make that happen. I believe that another Buy-and-Hold Crisis will do it. Then what I say will matter because there will be more people open to hearing the message and to spreading the message.
Rob
But people can make anonymous posts if they supported you, yet were afraid. We don’t see that.
I don’t think that most people are afraid that you will literally murder them. That’s what the police asked me. They said: “Do you believre that these people are really going to kill you or your family members or do you believe that it is just talk?” I said that I believed that the purpose was to silence me and those who agreed with me.
Humans are social creatures. Most people don’t want to enter a discussion once they see death threats and other forms of ugliness. They don’t want to do it with their names attached and they don’t want to do it anonymously either. The taboo against honest posting re the last 41 years of peer-reviewed research in this field is a SOCIAL taboo. The presence of threats makes the whole thing feel uncomfortable and ugly and makes most people not want to get involved.
Getting past the social taboo is the first step to us all developing a deeper understanding of how stock investing works in the real world. Shiller’s amazing research findings don’t do us any good if we don’t feel comfortable talkintg about them. I believe that the next Buy-and-Hold Crisis will motivate some people who have been afraid to speak out in the past to develop the courage to do so in the future. Each time someone shows the courage to speak honestly, it makes it easier for others to do the same. And soon there is no longer a social taboo! At that point we are all just enjoying a wonderful and enriching learning experience~
Rob
Yet you can’t even provide one single link to a threat. We are all just suppose to believe what you say.
You can look at the retirement study posted at John Greaney’web site, Anonymous. I pointed out the error in it (it lacks an adjustment for the valuation level that applies on the day the retirement begins) on the morning of May 13, 2002. It hasn’t been corrected to this day. There is zero chance that a retirement study could remain uncorrected for 20 years after the error in it was discovered without a lot of funny business going on. I mean, please give me a freakin’ break. That ain’t normal!
Rob