Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
The season is over. You are in your 60’s and you depleted your savings. That’s the problem with timing. You have to be right about when you buy and when you sell. With Buy and hold, you don’t have to worry about timing. You just know that the market always goes up in the long term and that a 4% SWR has never failed to work for any 30 year period. Shiller knows this and that is why he warned you against timing the market with CAPE. You just wouldn’t listen.
No. All that you need to know is what your proper risk profile is and how much you need to change the stock allocation you went with when prices were reasonable to get it back to the proper place when stock prices have risen to insanely dangerous levels. 70 percent of stock investing success is knowing when you need to engage in market timing and how much you should change your stock allocation when changes become necessary. Given that that’s 70 percent of what it takes to succeed, that should be 70 percent of the conversation at every discussion board and blog.
We should be talking about what matters. Market timing is what matters. Market timing is price discipline and price discipline is the key ton success in every market that has ever existed. All that Shiller did was to show that what common sense tells us must be so really is so. Once we bury the Get Rich Quick/Buy-and-Hold stuff 30 feet in the ground, where it can do no further harm to humans and other living things, we can all get about the business of discussing the stuff that matters.
My sincere take.
Rob
“ Given that that’s 70 percent of what it takes to succeed, that should be 70 percent of the conversation at every discussion board and blog.”
Wrong. Savings and savings rate is AT LEAST 70 percent of what it takes to be successful.
Market timing/;price discipline is 70 percent of what it takes to be successful at stock investing.
Rob
Yet you are broke and I have over $6 million. Clearly, you are wrong.
I don’t see it that way, Anonymous. I have 41 years of peer-reviewed research supporting my belief that market timing/price discipline is always required when buying stocks. You have zero peer-reviewed research supporting your belief that there might be an alternative universe 20 billion light years away in which everything works the opposite of how it has always worked here on Planet Earth and market timing is not 100 percent required for every investor.
I believe in using the peer-reviewed research as a guide. I don’t say that everyone has to follow it. That’s a personal choice. But I believe that everyone should have access to the research, the everyone should be able to hear what the research says.
Rob
With my $6 million, I will have a comfortable retirement. You have even admitted that. How will you pay your bills with your view of the research when you have depleted your savings?
It is my intent to continue to post honestly re what the last 41 years of peer-reviewed research teaches us all about how stock investing works in the real world. I think it would be fair to say that the 41-year cover-up of Robert Shiller’s Nobel-prize-winning research findings is the most important story that we have ever seen in the personal finance field. I make my living as a journalist. I have a funny feeling that playing the lead role in the uncovering of the biggest scandal in the history of the field, once that affects hundreds of millions of people, will provide me with a nice bit of financial compensation as well as a huge amount of personal fulfuillment.
But we’ll see. right? It’s not as if it would be possible for me to play it any other way. If I said that I believed that the retirement study posted at John Greaney’s web site contained an adjustment for the valuation level that applies on the day the retirement begins, I wouldn’t be able to sleep at night. So I do what I do.
My best and warmest wishes to you and yours.
Rob
“ But we’ll see. right? It’s not as if it would be possible for me to play it any other way.”
No, you do have a choice. You can stop playing around in your make believe world and join the rest of us in the real world. Get a job while you can still work and try to at least salvage a little bit of a retirement. Sitting around playing word games and telling made up stories hasn’t worked in the last 2 decades. Doing the same thing will give you the same results (zero).
Okay.
Well, I do wish you all the best that this life has to offer a person, in any event. I like to think that that might help at least a tiny bit.
My best wishes to you and yours, dear Goon friend.
Rob
Just curious. How do you pay your bills now?
Somehow that question does not persuade me that Greaney really did remember to include a valuation adjustment in his retirement study.
Rob