Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“ Never before has the CAPE value risen so high and then remained at insanely high levels for so extended a period of time. ”
In short, stock went up way more than what you predicted.
Stock prices rose higher than I expected and remained at high levels longer than I expected. That much is certainly so.
The point of dispute is — Was that a good thing for stock investors or a bad thing?
If the market is efficient (as it was widely believed to be in the days when the Buy-and-Hold strategy was being developed) it was a very good thing. If the market is efficient, then the stock prices reflects a reasoned assessment of the realities. A high stock price results from a high level of productivity. High levels of productivity permit us all to live better lives. So we all should rejoice when stock prices rise.
If valuations affect long-term returns (as Shiller showed with his Nobel-prize-winning research), it was a very bad thing. If valuations affect long-term returns, any price increases beyond those justified by the economic realities (that is, any price increases beyond those that produce a fair-value CAPE level of 17) are the product of investor emotionalism and will not last. They are the product of irrational exuberance. Price increases that do not last are a negative because they mislead investors as to the amount of their accumulated wealth. They cause them to save less and to spend more than they can afford to spend, They bring on failed retirements and business failures because consumer spending contacts when millions of investors suffer the price crash that inevitably follows a period of out-of-control irrational exuberance.
I prefer to know the true value of my stock portfolio. I think we should be permitting honest posting re the last 41 years of peer-reviewed research at every site on the internet, without a single exception. I view the last 41 years of peer-reviewed research in this field as the most important 41 years of peer-reviewed research in the history of investment analysis. I would like to see us all working together every day to bring the CAPE level down to a reasonable level and to keep it there.
My best wishes to you, Anonymous.
Rob
You want to work together? Really? That means you to listen to what others say, yet you don’t. What is your real definition of “working together” in your eyes?
To work together, we all need to have enough respect for each other to post our honest views. If someone sincerely believes that Buy-and-Hold is a good strategy, he should say that. If someone sincerely believes that Buy-and-Hold is a dangerous strategy, he should say that. I respect you for saying that Buy-and-Hold is a good strategy (although I obviously do not agree). I do not believe that you respect me for saying that Buy-and-Hold is a dangerous strategy.
Rob
There is not one word in your definition in which you say you will listen and consider what someone else says
I can promise that I will listen and that I will consider. I cannot promise that I will agree.
I have pondered these issues every day of my life for the past 20 years. I respect the Buy-and-Holders. I think they are intelligent and hard-working and seeking to do good. But I sincerely believe that they messed up re the market timing question. I believe that as a friend I owe it to them to point out where I think they messed up.
All of us humans have the capacity to make a mistake. It’s a horrible reality of life on Planet Earth. I tbink it’s great that in most circumstances we can count on our friends to sooner or later discover our mistake and to help us learn what we need to learn to fix it. In this particular case, the usual rules have not applied. I think that that’s because the issue (the safety of people’s retirements) is so important that the Buy-and-Holders just cannot bear to acknowledge the mistake and the rest of us feel funny pointing it out.
My take is that those of us who believe that Shiller’s Nobel-prize-winning research is legitimate researh are betraying our Buy-and-Hold friends by failing to point out the error. We are making things worse for them. We are causing them even more pain. Our Buy-and-Hold friends are hurting today. If they were thinking clearly, they would be at the head of the line of those saying that we need to open every discussion board and blog to honest posting re the last 41 years of peer-reviewed research.
That’s where I am coming from re this terribly important matter in any event, Anonymous. I naturally wish you all the best that this life has to offer a person, my old friend.
Rob
Rob Bennett will listen?????? Hahahahahahahaha!!!!!!
I heard your wife and priest also laughed when they heard you say that you will listen.
Wade Pfau is laughing as well.
I believe that Wade is very much looking forward to the day when he will feel free to do honest work again. I bellieve that in the days following the next price crash he will be quite open in saying that the 16 months in which he and I were working together on our amazing peer-reviewed research showing that market timing always works were the most fulfilling days of his life. He sents me dozens of emails indicating that that was the case.
We are all trapped by the 41-year cover-up. It’s become a big deal just to do honest, research-based work in this field because any discussion of the realities threaten to bring the entire Buy-and-Hodel crashing to the ground. It’s a shame. But I still believe that the good news attached to this story will end up being 20 times more good than the bad news attached to this story has been bad.
We’ll see.
My best wishes to you in any event, Anonymous.
Rob
Your post shows you are not listening.
Okay, Anonymous.
Rob
The rest of the world is wrong and only Rob Bennett is right.
It’s not only Rob Bennett who believe that Robert Shiller’s Nobel-prize-winning research is legitimate research It’s 10 percent of the population of the United States. We saw something in the neighborhood of that percentage supporting these ideas at every discussion board and blog. If it were only Rob Bennett, Shiller’s book would not have been a best-seller. His ressearch would not have been publshed in peer-reviewed journals. We wouldn’t have seen thousands of our fellow commiunity members expressing a desire that the boards a and blogs be opened to honest posting.
If we want to eliminate future Buy-and-Hold Crises, we need to get that number above 10 percent. To do that, we need to open every discussion board and blog on the internet to honest posting re the laat 41 years of peer-reviewed research, without a single exception. Once we do that, I believe that we will be able to get the percentage up to 90 percent. We can all look forward to living far richer lives from that day forward.
It works for me!
Rob
Someday the market will crash like or worse than 1929. Someday the New York Times will put you on the front page. Someday a bunch of lawyers will take up your case for free. Someday you will get a $500 million windfall. Someday all the financial experts will say Rob Bennett was right. Someday all the boards will be under the control of Rob Bennett. Someday millions of people will want to buy some material from Rob Bennett. Someday the mysterious goons will be unveiled and will be off to prison.
It has been over 20 years of waiting, but we all have to see how it all works out. Long term is 10 years, but doesn’t apply to Rob. The market hasn’t done what Rob said it would, but ignore that too.
This is the longest bull market ever experienced in U.S. history. Which is a very, very, very unfortunate thing.
Fortunately, we now know what it takes to stop bull markets in their tracks. Market timing. That’s the secret.
My sincere take.
Rob
“ This is the longest bull market ever experienced in U.S. history. Which is a very, very, very unfortunate thing.”
You were warned that you can’t predict the market and that is why your timing scheme didn’t work.
The peer-reviewed research that I co-authored with Wade Pfau shows that market timing has been working ever since the stock market was opened for business. Market timing is price discipline. It is a logical impossibility that it could ever not work. Have you ever imagined that checking prices before buying a car could ever not work? It’s a preposterous idea.
Buy-and-Holders tell themselves that stocks might starting today behave in a manner in which they have never before behaved because they want to believe believe that the irrational exuberance which is temporarily inflating the value of their portfolio is real. The last 41 years of peer-reviewed research in this field shows that that is a dangerous self-delusion. We would all be better off if we permitted honest posting and were aware of the true and lasting value of our stock holdings.
My sincere take.
Rob
Your statements are inconsistent. You say that we have never had a bull market that has run this long, yet then you say timing has always worked. You need the market to change in time before you deplete your savings, just like what has happened to you.
What the data shows is that buy and hold has always worked as markets have never seen a 4% withdrawal rate fail.
I don’t think that the statements are inconsistent. The market’s core purpose is to get the price right. That’s what markets do. To get the price right, the market needs the cooperation of the investors. The more informed and rational the investors are, the better the market will be able to go about its job of getting the price right.
Prior to the publication of Shiller’s Nobel-prize-winning research, we did not know that valuations affect long-term returns. So there were people who came to believe that market timing might not be required. That made it hard for the market to do its job and we all suffered the consequences (the Great Depression and the stagflation of the 1970s and so on). Now we know. So the sensible thing is for us all to move on to living better lives in a world in which bull markets are impossible (because most investors always respond to them by selling stocks and thereby pulling prices down) and bear markets are also impossible (because it is bull markets that cause bear markets by leaving the market with no other option to get prices right than to crash them because most investors are unwilling to act in their own interest by practicing price discipline/market timing when buying stocks).
It’s certainly true that I want the market to change and get prices right. We should all want that. Any time the market gets prices wrong. we all suffer. You’re acting like it’s a good thing that the market has gotten prices wrong for a longer time this time than ever before. That’s not a good thing for investors. It’s a horrible thing. The more that prices are wrong, the less ability investors have to practice effective financial planning. Bad, bad, bad. bad, bad.
It’s absurd to thnk that there mght come a time when market timing did not work. How could that be? Market timing is price discipline, which is the thing that permits the market to function. That’s like saying that there might come a time when eating a balanced diet might not work. Eating a balanced diet is a pure good, it always works. Now, it is possible for there to be a case where someone who eats a balanced diet dies at an early age. That can happen. But the cause of death is not that the person ate a balanced diet. Eating a balanced diet is always a good thing. And market timing (practicing price discipline when buying stocks) is always a good thing. It’s a logical impossibility that there could ever be an exception.
My sincere take.
Rob
“ I don’t think that the statements are inconsistent. ”
They are. You need the bull market to come to an end in time for you to buy back in a get the benefit of a ride back up. If it doesn’t come in time, your savings will have depleted to the point you can’t recover. You even noted this in 2005 when you were off track with your budget. You said you were not worried because You would make it up when you got back in after the market after a drop. That event never happened, showing that your timing failed. You further state: “ It’s absurd to thnk that there mght come a time when market timing did not work”, yet timing has never worked and you can’t even show one successful case.
You know all this to be fact, yet you will likely delete this post like you do on a consistent basis. In the end, you are broke because your plans failed.
I’ve never had any problem in the investing realm. I have done well. In the event that stocks continue to perform in the future anything at all as they always have in the past, I will do even better in the future. So that one is not an issue. OF COURSE following a true research-based strategy has produced good results. What possible reason could there be for thinking it would not?
Yes, my savings have been depleted. Not because of any investing problems. Because of the criminal behavior of you Goons. I had people who didn;t even agree with me on stock investing pleading with Greaney to just permit me to post about saving strategies because they loved my saving stuff and wanted to be able to hear more about it. Greaney’s view was that he absolutely could not permit that because he had seen that I received a strong, positive reaction from about 10 percent of the board community when I posted about the last 41 years of peer-reviewed research and how could he be sure that, if he permitted me to post about saving, I wouldn’t some day in the future return to posting honestly about stock investing again? And he;s right to be concerned about that! I would absolutely do that. I think that we should ALL be posting honesting re stock investing and I would do what I could to make that happen.
The Ban on Honest Posting is killing us. We need to open every discussion board and blog to honest posting re the last 41 years of peer-reviewed research in this field. We need to do that by the close of business today, if not a good bit sooner.
That’s my sincere take re these terribly important matters, in any event.
My best and warmest wishes to you.
Rob
What criminal acts? We read your retirement plan. You said it would work by being able to get back into stocks. That never happened.
In the event that stocks continue to perform in the future at least somewhat as they have always performed in the past, it will happen. If I put $500 million into stocks at a time when the CAPE value is 8, I will earn a likely 10-year annualized return of 15 percent real on that money. That’s a lot of compounding!
Rob
You just said you have depleted your savings. You don’t have even one dime of your $500 million speculation. 15 percent of zero is still zero.
We are talking about investing successfully to fund retirement. You admit that you depleted your savings. You are now counting on a windfall payment instead of normal investing for retirement. So is it now your strategy that all market timers like you will need windfall payments to retire instead of relying on investing?
You just said you have depleted your savings. You don’t have even one dime of your $500 million speculation. 15 percent of zero is still zero.
You Goons would not have fought as hard as you have fought for 20 years now if you didn’t believe that I would have earned a lot more than $500 million for opening every discussion board and blog on the internet to honest posting re the last 41 years of peer-reviewed resesrch in this field.
I mean, come on.
Rob
We are talking about investing successfully to fund retirement. You admit that you depleted your savings. You are now counting on a windfall payment instead of normal investing for retirement. So is it now your strategy that all market timers like you will need windfall payments to retire instead of relying on investing?
Of course not. No othee investor would be the person who advanced a post on the morning of May 13, 2002, pointing out the error in the Buy-and-Hold retirement studies (they lack an adjustment for the valuation level that applies on the day the retitement begins). So no other investor would have a gang of internet goons engaging in abusive and criminal behavior to stop him from being able to earn a living for 20 years.
But you of course knew that all along. So that was not a sincere question. It was just more Goon garbage. Surprise! Surprise!
Rob
“ So no other investor would have a gang of internet goons engaging in abusive and criminal behavior to stop him from being able to earn a living for 20 years.”
No one kept you from getting a job and earning an income. We all told you to get a job. Your wife and priest told you as well. You told us that you couldn’t work a job because you wanted to write a book.
I bet if you asked, hundreds of us would give you plenty of support in getting a job.
The most important job in the United States today is opening every discussion board and blog on the internet to honest posting re the last 41 years of peer-reviewed research in this field. Doing that would help millions of people live better lives. It might prevent us from going into a Second Great Ddepresion.
Are there hundreds of you willing to help me with that one?
Rob
“ Are there hundreds of you willing to help me with that one?”
We are willing to help you find a job that pays the bills to support your family. Are you ready to work after taking a 20+ year vacation?
The work that I have been doing for the past 20 years (continuing to post honestly re the past 41 years of peer-reviewed research in the face of the abusive and even criminal behavior of the Buy-and-Hold Goon Squads) is the hardest work there is. Take out an ad seeking applicants for a job that involves having death threats directed at you and at family members and acts of extortion and defamation aimed at silencing people who post words of support for you and see how many applicants you get.
Holy moly!
Rob
It’s not work if no one is willing to pay you for it. No one believes the death threat stories either.
Millions of people would have been happy to pay me if the various boards and blogs had not adopted a Ban on Honest Posting re the past 41 years of peer-reviewed research. You never would havr advanced a single abusive post, much less any of the criminal stuff, if you hadn’t seen that with your own eyes. I never had a majority on my side. But I had 10 percent of the population of every board and blog. 10 percent of the population of investors is millions of people.
Rob