Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Your wife doesn’t believe one bit of it and that is why she pleads with you to get a job.
She accepts that I have tapped into something important. She has told me that. But her focus is on the practical side. She feels that there needs to be money coming in. I am sympathetic to that position. But my focus is on the public policy side of the story.
In the normal state of affairs, people would have openly debated the merits of Buy-and-Hold versus the merits of Valuation-Informed Indexing going back to 1981. There never would have been any “controversy” over the need for the debate. In this particular case, things got off track early on. People who give investment advice need to be recognized as experts and it is a bit problemmatic to tell people that you are an expert while also telling them that there is another point of view on all the important qiuestions that would generate very different advice. So discussion of the minority point of view was suppressed. Then people came to feel that that suppression would come to be seen as a cover-up and the perceived need for further suppression grew stronger and stronger.
I didn’t ask to be the leader of the effort to open every site on the internet to honest posting re the peer-reviewed research. I am just a journalist who discovered that there was some funny business going on when I told people about the error in the Greaney study and then witnessed this mass freak-out aimed at keeping the cover-up going. I was dragged into this. But, knowing that is affects millions of people in very serious ways, I don’t feel that I can just walk away. I need to give the effort of setting things straight my best shot. I couldn’t live with myself if I didn’t do that much. I believe that I will make plenty of money from this. But money is not my primary driver.
Rob
“ People who give investment advice need to be recognized as experts and it is a bit problemmatic to tell people that you are an expert while also telling them that there is another point of view on all the important qiuestions that would generate very different advice.”
You are giving out investment advice, yet you are not an expert, nor do you have any formal education in the field.
That’s a plus at a time when there’s an internet-wide ban on honest posting re the last 41 years of peer-reviewed research in this field. I read Shiller’s book. The title is “Irrational Exuberance.”
My best wishes to you.
Rob
First you say you need to be an expert, then you say it is better not to be one.
The idea that market timing is not required was the dominant expert view in the 1960s, when Buy-and-Hold was being developed. Then in 1981 an expert (Shiller holds a Ph.D.) published peer-reviewed research showing that the market is not efficient and that timing is required for investors seekling to maintain a constant risk profile over time. People who had developed reputations as “experts” in earlier times have suppressed discussion of the far-reaching implications of Shiller’s Nobel-prize-winning research for 41 years now. Who are the true experts? The people still following a model discredited by 41 years of peer-reviewed research? Or the 10 percent of the population that believes that Shiller’s Nobel-prize-winning research is legitimate research?
I read Shiller’s book. I understand that there is precisely zero chance that the safe withdrawal rate could be the same number at all valuation levels. Does that make me an ‘expert”? Reading a book does not make me an expert in the way that that word is ordinarily used. But it puts me far ahead of the many people who to this day believe in Buy-and-Hold strategies.
Expertise will not mean what it means in other fields in this field until we open every internet site to honest posting re the last 41 years of peer-reviewed research. If the Buy-and-Holders cannot bear to be questioned, their “expertise” is a pretty darn flimsy thing. True experts don’t advance death threats or engage in acts of extortion. Nor do they keep quiet when they see others around them doing so. True experts encourage challenged to their thinking, especially when the challenges are rooted in 41 years of peer-reviewed research.
I am the strongest critic of the “idea” that market timing is not required alive on Planet Earth. If that makes me an expert, then I’m an expert. And proud of it. I sure ain’t a Buy-and-Holder (although I of course have great respect for the Buy-and-Holders for the many important contribtuons that they made that have stood the test of time).
I hope that helps at least a tiny bit.
Rob
Your advice on timing would be disastrous to anyone who followed it. Fortunately, no one listens to you.
Roughly 10 percent of the population of investors listened at every community at which I posted. If it was not for the abusive and in some cases even criminal behavior of the Buy-and-Holders, that 10 percent would over time have grown to 20 percent. And then the 20 percent would have grown to 40 percent. And then the 40 percent would have ground to 80 percent. And we would all live better and richer (in every sense of the word) lives from that point foward.
If irrational exuberance is a real thing, we all should be united in doing everything possible to rein it in. The Bennett/Pfau research shows that irrational exuberance is responsible for up to 70 percent of the risk of stock investing. The only way to combat irrational exuberance is with price discipline/market timing. So the Buy-and-Hold understanding of how stock investing is precisely the opposite of what the last 41 years of peer-reviewed research shows to be the reality.
I pointed out the error in the Greaney retirement study on May 13 2002. A good number of the people who refer to themselves as experts have not to this day demanded that the Buy-and-Hold retirement studies be corrected. Does that make me a super expert?
My best wishes to you.
Rob
10%? Yet you can’t can’t a single one to post here.
http://www.passionsaving.com/investing-discussion-boards.html
Rob