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 told us you were the one with emotional issues and that’s why you couldn’t finish the book.
All humans have emotions, Anonymous. There are no exceptions.
The Buy-and-Holders and the Valuation-Informed Indexers share a desire to minimize emotion in stock investing, Their approach to doing so is different. The Buy-and-Holders disdain emotion, They don’t talk about it. They act as if it doesn’t exist. The Valuation-Informed Indexers tackle it. The reason why we engage in market timing is that market timing is the tool available to us to overcome the effect of investor emotion. The CAPE value revreals how much emotion there is in the market at a given point in time and by engaging in the appropriate amount of market timing investors are able to pull the CAPE value back to where it should be. We respond to emotion and thereby overcome it.
Rob
I thought your book is the priority. Why are you still posting here and on ValueWalk?
I want to keep learning about the subject. Writing the columns at Valuewalk has been an amazing learning experience. The thinking that I engaged in to come up with new column ideas has made the book a much better product than it would have been had the column not been there. So continuing with the column is a no-brainer.
Whether or not to engage in interactions with you Goons is a harder call. If you posted with good intent, the learning experinece would be even better than the one that comes from writing the column. You obviously do not do that. So an argument could be made that nothing good can come from the interactions. I don’t quite buy into that thought. No matter how determined you are to block out any possibility of civil and rational back-and-forth, the full reality is that you Goons deep down want the same thing that I and all other investors want — to learn as much as possible about how to become effective long-term investors. I think that that reality plsys a small role in our discussions from time to time despite your determined insistence on keeping the discussions non-productive. If 90 percent of our interactions are a waste of time and 10 percent lead to a few insights that I would have missed out on had I not participated in the time-wasting stuff, I believe that an argument can be made that engaging in the interactions is useful for someone trying to learn as much as possible about this subject matter.
Only on rare occasions do I enjoy out interactions. The nastiness coming from the Goon side of the table makes them unpleasant. But what matters in the long run is whether they help me to learn anything about why stock investors become so emotional about their strategy choices. It is my belief that I learn things from time to time, despite all the awful noise. So I soldier on and try to make the best of it.
Rob
You only learn by reading your own words? So you really aren’t interested in posting anywhere else on the internet, right?
No. That’s not even close to being true. I learn by thinking. It’s when my own thoughts come into contact with different thoughts offered by others that I learn. That’s why I say that I would be an amazing learning experience if you Goons had any interest in engaging in civil discussion, But I gave up thining that that was a possibility a long time ago. Every now and again, however, you just can’t help yourselves. Those moments are gold. I put up with all of the garbage to be able to enjoy those rare moments when you permit something real to show through the Goon persona.
If I learned about some place on the internet where people were having a discussion about how Shiller’s Nobel-prize-winning research overturns our old understanding of how stock investing works in a fundamental way, then, sure, I would want to be a part of that. The comment that Sensible put up re the Reddit discussion does not suggest even a tiny bit that that is what is going on over there. So, no thanks, you know? Shiller revolutionized the field or he did nothing. He didn’t show that the old safe withdrawal rare calculations are a little off. He showed that they are wildly wrong. A showing that valuations affect long-term returns is not a small advance over a belief that the market is efficient (that market timing is not required). It is the biggest advance in the history of personal finance. To benefit from the advance (to make the changes that we need to make so that we can all live fuller and better and richer lives from this point forward), we need to talk about the how-to implications of Shiller’s amazing research findings in realisitc ways.
I am happy to talk to anybody. But I am not going to pretend that I believe that Shiller’s Nobel-prize-winning research is only a small advance. That would be dishonest. I have had many of those sorts of discussions in the past and they ultimately lead nowhere. To obtain the benefits that Shiller’s amazing research promises, we need to be able to let in that we did not always know everything there is to know about this subject and that the last 41 years of peer-reviewed research is the most important 41 years of peer-reviewed research in the history of investment analysis. Those are the discussions that matter. We have already squandered 41 years. Engaging in silly discussions of whether Shiller achieved some small advance just causes us to squander more time that we should be devoting to learning how we all can live fuller and better and richer lives by making the shift to the first true research-based investment strategy.
Rob
Since your divorce have you had more or less time to work on the book?
The number of hours that I can devote to the project has not changed. But the emotional angst caused by the divorce has showed me down in a huge way. My biggest obstacle BY FAR is the emotional angst that I feel as a result of the divorce and the board bannings and the death threats and the extortion and all the rest. Intellectual work has been 20 percent of this project. Overcoming the emotional angst that follows from telling people research-based truths about stock investing that some very, very much do not want to hear has been 80 percent of the “work.” The core “job” here is overcoming that emotional angst and getting words down on paper that can be used to help millions of others overcome their own emotional angst.
Buy-and-Hold was developed by people who believed (based on the Efficient Market Theory) that investors are engaged in the rational pursuit of their self-interest, that stock prices reflect economic realities. Shiller showed that investors are at times highly emotional and that it is not possible to get any of the numbers used in an investment analysis right without taking the emotional realities (reflected in the CAPE value) into account. The Buy-and-Hold “idea” the market timing/price discipline is not required is pure emotion. Valuation-Informed Indexing is the first model for understanding how stock investing works that permits consideration of the factor (investor emotion) that is 70 percent of the story.
The board bannings and all the rest result from this conflict between emotion and reason. People who make the case for permitting reason to have a place in the investment advice field are going up against powerful, entrenched interests who very much do not want millions of middle-class investors to learn how important it is to take valuations/investor emotion into consideration. So we are made to feel like social pariahs. There are millions of people who want to hear what we have to say. But there are a larger number of very determined people who want very, very much to supress us. So it becomes painful just to give voice to simple truths (it’s not possible to calculate the safe withdrawal rate without taking the valuation level that applies on the day the retirement begins into account — who ever would have thought it?!!!). So I’ve experienced a great deal of emotional angst and it has held me back a great deal for a long time now. The divorce is just one part of that but it is of course the most crushing, painful part of it.
Rob
With the emotions overwhelming you, why haven’t you sought out mental healthcare services?
With the emotions overwhelming you, why haven’t you sought out mental healthcare services?
I’m not the one who pushed the CAPE value up to 29, Anonymous. It is the community of U.S. stock investors who did that. That’s an insanely dangerous thing to do. It’s the community of U.S. stock investors who need mental healthcare services.
The way to correct for the insane Get Rich Quick/Buy-and-Hold inclinations that push the CAPE value up to 29 is to permit honest posting re the last 41 years of peer-reviewed research at every discussion board and blog on the internet, without a single exception. I have been advocating that since the afternoon of May 13, 2002.
My only problem is that I am advocating for rational research-based investment strategies at a time when millions of people have a huge emotional investment in the continuation of Buy-and-Hold/Get Rich Quick ones. If Shiller’s Nobel-prize-winning research had been available in the days when Buy-and-Hold was being developed, it would always have been the first principle of Buy-and-Hold that all investors always practice price discipline/market timing, Unfortunately, thats not the way things lined up. So we all found ourselves living though this crazy time-period in which we have 41 years of peer-reviewed research telling us how things work but we dare not say anything about it on the internet for fear of what the Buy-and-Hold Goon Squads will do to us if we do. Humans!
My best wishes to you.
Rob
People are stressed by many things. If someone suffered from panic attacks during 80% of their day, wouldn’t they need to get help?
If we were all super kind and super rational, we would have helped the investors who permitted the CAPE value to rise to 29 by refusing to engage in necessary market timing by opened every internet site to honest posting re the last 41 years of peer-reviewed research, without a single exception. We are not there yet as a nation of people. We are close. We permitted Shiller to publsh his amazibng book and we permitted libraries all over the country to carry it, We permitted him to publsh his research in a peer-reviewed journal. We awarded him a Nobel prize. Thousands of us expressed our desire that every site be opend to honest posting during the first 20 years of The Great Safe Withdrawal Rate Debate. But we are not quite up to providing investors with the help they need as of this moment.
I believe that we will work up the courage to stand up to you Goons in the days folliowing the next Buy-and-Hold Crisis. We’ll see.
Rob
You should stop the ban on honest posting at passion saving.com. You moderate with a heavy hand, Rob.
I know. I’m so bad!
Everybody knows it too. That’s the thing!
Rob
If you could post at any site on the internet today, what site would YOU post on that you can’t already?
Bogleheads Forum.
Lots of smart and good people post there. And lots of Buy-and-Holders (Valuation-Informed Indexing is just Buy-and-Hold updated to incorporate the last 41 years of peer-reviewed research).
Rob
So if you will post there right now, why not at Reddit? They have just as many smart people and a much larger audience?
Maybe it’s just a sentimental attachment. I have nothing against Reddit. I said that I will post there after I finish my book. I think of Bogleheads Forum as my home. Bogle is the one who taught me that the Greaney study is in error. I push Valuation-Informed Indexing and all that Valuatiion-Informed Indexing is is Buy-and-Hold updated to incorporate the last 41 years of peer-reviewed research (and the Buy-and-Holders are at least in theory suppotive of the idea of using peer-reviewed research as guidance in making investing choices). So I have more feeling for Bogleheads Forum.
Rob
How is Bogleheads home? It was established to have a new forum free from you. Regardless, you can go there now and post. Go ahead. We will wait.
The very fact that the Lindauerheads set up a separate discussion forum just to escape me shows how much of a threat they see in the last 41 years of peer-reviewed research. The Lindauerheads favor Buy-and-Hold even if there is 41 years of peer-reviewed research showing that there is zero chance that it could ever work for a single long-term investor. I favor the peer-reviewed research even if it means that we need to put Buy-and-Hold to bed. The Lindauerheads and me are working at cross purposes.
That’s not true of the entire board community, however. LOTS of people there LOVE the idea of permitting honest posting re the peer-reviewed research. I believe that the ocean of human misery that we will see with the arrival of the next Buy-and-Hold Crisis may strengthen the spine of some of those people and we may see the greatest surge of economic growth in the history of the United States as a result of their efforts.
It will be interesting to see how it all plays out.
Rob
“ The very fact that the Lindauerheads set up a separate discussion forum just to escape me shows how much of a threat they see in the last 41 years of peer-reviewed research”
I disagree. Everyone else disagrees. Let’s go debate it on Reddit.
Thousands will be able to debate it on every discussion board and blog in the days following the next Buy-and-Hold Crisis. We both know how that debate is going to go, given what the last 41 years of peer-reviewed research tells us about how stock investing works in the real world. That’s been the hold-up for 20 years now. There’s no way for us all to get to the place where deep in our hearts we all want to be without the Buy-and-Holders learning how to pronounce the words “I” and “Was’ and “Wrong.”
One of the dangers of advocating the use of peer-reviewed research to guide investment choices is that there may come a day when new research findings will be published and you will need to say the words “I” and “Was” and “Wrong.”
Rob
The problem here is that you are wrong, Rob. You are an egomaniac who refuses to accept fault for his own failures and who stubbornly stays on the same course no matter how disastrous it has been. It’s like you took a wrong turn on a road trip and are refusing to stop and ask for directions back to the interstate only you’re not just lost on some country road, you’re lost in life!
Okay, Sensible.
I naturally wish you all the best that this life has to offer a person regardless of what investment strategy you elect to follow, in any event.
Rob
If your wife thought you were right, she wouldn’t have divorced you.
She never studied the investing stuff in great detail. She didn’t have enough interest in the subject to do that. She told me that she believed that I was onto something important. So she more thought that I was right than she thought that I was not right. But she wanted to see money coming in. That was her objection. She thought that I was wrong to continue to pursue the investing work when it had not produced money for so long.
Rob
How long do you think any wife should have to wait for her husband to bring in money?
I think it depends on the circumstances. In ordinary circumstances, I would say that my wife exhibited the patience of a saint. However, the circumstances in this case are not a tiny bit ordinary. The Get Rich Quick/Buy-and-Hold “strategy” has caused four economic crises, including a Great Depression. We now have available to us 41 years of peer-reviewed research pointing out a better way and we have seen thousands of investors express a desire to be able to learn about it. In those circumstances, anyone who cares about the future of his country has to do what he can to open every internet site to honest posting. I wouldn’t be able to sleep at night if I didn’t do what I could.
I offered to work out a compromise. I said that I would work a 40-hour-per-week regular job in return for her agreeing to give me emotional support for doing the investing work on nights and weekends. At that point in time, she was so disguested by the lack of money coming in for so long that she was not willing to discuss the idea. She just shrugged her shoulders and walked away.
Rob
“ She never studied the investing stuff in great detail. ”.
So she doesn’t really know that you are “onto something important”. Instead, she was just taking your word for it for a period of time and then patience ran out.
Her conclusion was based on the fact that big-name people like Wade Pfau thought so highly of my work.
Rob
It appears that Wade does not think very highly of your work. He told you so in email and when you wouldn’t listen, he decided to stop speaking with you.
He never should have been threatened. Extortion is a crime in the United States. It’s a felony. That means prison time.
Rob