Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
You believe you have come up with one of the most significant findings in our life time. You believe there has been a mass conspiracy against you. You believe that thousands of people are in support of you’ve though they have never said so, but are just too afraid to post anonymously. You believe that after some huge market crash that congress will conduct an investigation, which will lead to stories in The New York Times and, ultimately, catapult you to a major public figure leading the way to solving the world’s financial crisis. You believe that many leading law firms will then compete to take on your case and that you will either settle for a modest $500 million payment or take it through courts for Billions and make you one of the wealthiest people alive today. You believe that leading experts will want put you to be the keynote speaker at leading investment conferences. You believe that all those people that have disagreed with you in the past will lose all or most of their money and will spend much of their remaining days in prison unless you intervene in a manner to reduce their time locked up. You believe that all of the community boards will be turned over to you and that you will lead these boars or some kind of consortium and that market timing will be the key discussion point on ALL boards.
Have I got all that right? Did I miss anything or fail to clarify anything?
It was Shiller’s finding that valuations affect long-term returns, not mine. There is a reason why that research finding caused him to be awarded a Nobel prize in Economics. That finding changes everything that we once thought we knew about stock investing. There were once smart people who believed that it is not necessaery for all investors to practice market timing (price discipline!) at all times. If valuations affect long-term returns, stock investing risk is not stable but variable. Investors who wish to maintain the same risk profile over time have no choice but to practice market timing. There is no other way to get the job done.
My contribution has been to for 20 years (and counting) lead the effort to open every discussion board and blog on the internet to honest posting re the paat 41 years of peer-reviwed resarch, without a single exception. As amazing as it is, Shiller’s research by itself accomplshes nothing. We have seen higher CAPE values in the days since publication of his research than we saw in the days before its publication. For the research to make all of our lives better, we need as a nation to give ourselves permission to examine its far-reaching how-to implications at every site on the internet. The goal is to overcome the Get Rich Quick/Buy-and-Hold urge that resides within every one of us. It takes regular reminders of the long-term dangers of Get Rich Quick/Buy-and-Hold to do that.
The conspiracy is not against Rob Bennett per se. The conspiracy is against human rationality. Shiller pointed us to a grown-up way to invest, a rational way. a true research-based way. When that way catches on, there will be no more bull markets or bear markets or economic crises. Because Get Rich Quick/Buy-and-Hold strategies will no longer be popular. Shiller’s research findings are a threat to the Get Rich Quick/Buy-and-Hold approach to thinking about the stock investing project. Rationality/research/logic/common sense is a threat to the emotional ways of thinking about this project. The conspiracy is a condpiracy of ignorance. It is like the conspiracy against healthy eating habits. Everyone knows that it is better to have a healthy diet. But there is a conspiracy of ignorance leading them in a different direction.
The boards will not be turned over to me. They will be turned over to the people who post at them. Yes, I will be able to post my honest views. But everyone else will as well. People who believe in Buy-and-Hold will be able to post their honest views as well. They will not be able to engage in criminal behavior to intimidate those who believe that Shiller’s research findings are legitimate. The same laws that apply in every other field of human behavior will be made applicable in the investing advice realm as well. And we will all get to live far better and richer lives from that point forward as a result.
Make sense?
Rob
“ It was Shiller’s finding that valuations affect long-term returns, not mine. ”
So Shiller gets the $500 million since he did the work.
Shiller did amazing work. You certainly won’t hear me say any different.
But do you know what has happened in the years since Shiller published his Nobel-prize-winning research? We have seen the highest CAPE values in our nation’s history in those days!
We know intellectually today how stock investing works, thanks to Shiller. But that intellectual knowledge will do us no good until we secure the ability to talk about it on every discussion board and blog on the internet. We all have a Get Rich Quick/Buy-and-Hold urge residing within us. We need to be reminded daily of how dangerous it is. For Shiller’s work to have practical value, we need to open every site on the internet to honest posting re the past 41 years of peer-reviewed research, without a single exception.
My sincere take.
Rob
So now Shiller doesn’t get the $500 million.
Who gets to decide what the research really says? Who gets to decide what they think is honest? You decide what you are going to block on this board, so shouldn’t others have the same choice?
Each community member gets to hear both sides and to decide for himself or herself which strategy to follow, so long as the published rules of the various sites are followed and no laws are broken. Of course that’s not what we saw happen. Those who engaged in abusive behavior are responsible for the losses of those who could have invested more effectively if only honest posting re the peer-reviewed research had been permitted. In the event that stocks continue to perform in the future at least somewhat as they have always performed in the past, those losses will be in the many trillions of dollars.
Not good.
The other side of the story is that, once we have opened every site to honest posting re the last 41 years of peer-reviewed research, we will likely see the biggest surge of economic growth in our nation’s history and we will all live better and richer and more fulfilled lives from that point forward. So, even with the downside, I think it would be fair to say that the good stuff that we have seen over the past 20 years has been 20 times more good than the bad stuff that we have seen over the past 20 years has been bad.
We’ll see.
Rob
People are not able to hear both sides on this website. Also, you didn’t answer as to who decides what is honest and you also didn’t answer as to who decides what the research really says. You make all the decisions Here, so shouldn’t others decide so for their own boards?
People should make the decisions that they need to make to run their own boards. I certainly agree with that. But, if a board owner publishes rules for participation in which he declares “I will have zero tolerance for death threats,” then he should evidnece zero tolerance for death threats in his site administration decisions. If he doesn’t, he creates an unjustified confidence in the minds of the people who visit his site re the things said by the people advancing the death threats. One of the people making use of death threats states that “the data shows that a 4 percent withdrawal rate is always 100 percent safe” and people think that the claim is a valid one because they do not see other community members challenging it. But of course there would be LOTS of people challenging it if not for the death threats.
Abusive behavior affects what is said. It is only Buy-and-Holders who we have seen engage in abusive behavior. Why is that? It’s because they are desperate. They got there first. They put forward this crazy idea that market timing is not always required and built an entire industry around it. Then this Shiller fellow published Nobel-prize-winning research showing that valuations affect long-term returns. What to do? The sensible thing to do is to rewrite all the books that were written in the Buy-and-Hold Era to reflect the findings of the new research. That’s not what happended. We still have people today saying that the safe withdrawal rate is the same number at all valuation levels In their desperation, the Buy-and-Holders want to suppress discussion of the how-to implications of the last 41 years of peer-reviewed research. I think that is a very, very, very bad idea, I think we all need to know what the research says. So I “cross” the Buy-and-Holders by pointing out to people that the Buy-and-Hold retirement studies lack a valuation adjustment.
As a society, we are of two minds re these questions. We very strongly believe that people should be permitted to post honestly. That’s why every site has rules prohibiting the tactics that the Buy-and-Holders have employed to suppress discussion of the research. But we also love love, love us some Get Rich Quick investing advice, We want to believe that those numbers on our portflio statements are real. We want something for nothing and, if it means causing an economic crisis to pretend for a time that the irrational exuberance gains that we created have some lasting economic significance, then we can live with that.
But we haven’t ecperienced the inevitable economic crisis yet, you know? We are like the guy who has been eating sugars and carbs for decades but hasnm’t yet had a heart attack. That guy often tries to change his earing habits after he has his heart attack. I believe that the next economic crisis will help us to see the merit of permitting honest posting re the peer-reviewed research in the stock investing realm. These economic crises that always follow times in which Buy-and-Hold “strategies” are heavily promoted are now optional. We now have the peer-reviewed research needed to help people think more clearly about these matters and enjoy far higher returns earned by taking on dramatically redused risk. I think we are on the verge of making a decision as a society to start eating better.
We’ll see. It’s sure not going to happen if the 10 percent of us who believe that Shiller’s Nobel-prize0-winning research is legitimate research fail to point out the dangers of the Buy-and-Hold “strategy. I sincerely believe that the Greaney retirement study lacks an adjustment for the valuation level that applies on the day the retirement begins. So that’s what I say when the subject of safe withdrawal rates turnd up on discussion boards and blogs at which I participate.
My best and warmest wishes to you.
Rob
“ People should make the decisions that they need to make to run their own boards. I certainly agree with that.”
There you go. They can ban you and your comments, just like you do to others.
As to death threats, we see that it is all made up.
The Greaney retirement study has not been corrected to this day, 20 years after the error he made in it was pointed out to him (the study lacks an adjustment for the valuation level that applies on the day the retirement begins). That ain’t normal.
Please explain.
Rob
It has been explained to you thousands of times why you are wrong about Greaney. You choose to ignore it. That seems to be a pattern with you.
Okay.
I do wish you all the best that this life has to offer a person, in any event. I would like to think that that would help at least a tiny bit.
Rob
Who is wishing the best for the other? You want to see your critics go to prison. You critics want to see you stop wasting time and to get a job so that you can actually have money for retirement instead of tensing broke.
I don’t want my critics to go to prison. I first called on Greaney to correct the error in his retirement study on the afternoon of May 13, 2002. He obviously wouldn’t be worried about going to prison today had he followed my advice. I don’t remember you joining me on that call, Anonymous.
I have said that I intend to do everything to make the prison sentences assigned to you Goons as short as possible. I’m not Superman. There are limits to my powers. Help me out, you know? Every day that the Ban on Honest Posting continues, more lives are destroyed. The members of your jury are obviously going to be looking at how many lives you have destroyed when determining the length of your prison sentence. Forget about the millions of middle-class investors who desperately need access to honest posting re the last 41 years of peer-revivewed research in this field. Just leave that to one side. How about helping me to open every site to honest posting for the 100 percent selfish motive of reducing your prison sentence a bit?
Make perfect sense?
It sure seems so to me.
My best wishes.
Rob