Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
What you are doing isn’t a job and no one asked you to live out this fantasy.
Instead, you are merely a burden to those that have had to support you, including housing.
I think that the work that I am doing is the most important work being done today in the United States and I believe that I will be compensated accordingly in the days following the next Buy-and-Hold Crisis. Over and over again we have seen people who are viewed as experts in this field make efforts to let their readers and clients know that market timing/price discipline is absolutely essentual but hold back from speaking in clear terms for fear of what the Buy-and-Hold Goon Squads would do to them if they gave voice to simple and obvious research-backed truths. The best exanple is probably William Bernstein, who explained in his book that the conventional safe withdrawal rate studies were off by a full two percentage points at the top of the bubble but then kept it zipped while the discussions about whether honest posting should be permitted raged at the Bogleheads Forum. There is huge levelage in opening every board and blog to honest posting. We are going to be hearing amazing stuff from thousands and thousands of good and smart people in the days following the next Buy-and-Hold Crisis. I think we well could be looking at the biggest surge of economic growth in our nation’s history (after a horrifying Buy-and-Hold Crisis, to be sure).
Rob
When did William Bernstein tell you to quit your job and pull your money out of the stock market? Why are you broke if you know how the market works?
Bernstein reported the safe withdrawal rate accurately in his book. He should have repeated what he said in his book when the question came up on the Bogleheads Forum. That way, we could have gotten the Greaney study corrected many years ago. Once that study was corrected, we could have moved on to all the other Buy-and-Hold retirement studies that got the numbers wrong because they failed to account for irrational exuberance. Then we could have moved on to asset allocation questions and risk management questions. We could have replaced Buy-and-Hold with Valuation-Informed Indexing. We wouldn’t have a CAPE value of 29 today, we wouldn’t be priced for another Buy-and-Hold Crisis within the next year or two or three and we would all be living better and fuller and richer lives today than we ever imagined possible during the Buy-and-Hold years.
That’s how it works in every field of human endeavor other than the investment advice field. Humankind didn’t come to Planet Earth with knowledge of everything that any of us will ever need to know. So the people who developed Buy-and-Hold made a mistake (Shiller’s Nobel-prize-winning research was not available at the time). If we were all thinking clearly, we would all have wanted that mistake to be corrected as quickly as humanly possible. What possible benefit is there to having retirement studies that get the numbers wildly wrong? That’s nuts. I mean, come on.
The problem today is that it doesn’t just make the Buy-and-Holders feel bad for people to learn about their original mistake, it makes them feel really, really, really bad for people to learn about the 42-year cover-up. In another year, it will be a 43-year cover-up. Then a 44-year cover-up. It can never get better. It can only get worse. I believe that the error should have been corrected as soon as it was discovered (in 1981). Given that 42 years have already passed, it should be corrected by the close of business today. Continuing the cover-up hurts each and every one of us and helps absolutely no one.
Bernstein did a wonderful thing by reporting the safe withdrawal rate accurately in his hook. But that obviiously wasn’t enough to get the job done. It was his fear of what you Goons would do to him if he did honest work in this field that caused him to keep it zipped when the discussions turned up at the Bogleheads Forum. We all need to pull together and support each other when you Goons attack us and then the problem is solved. Then Bernstein would feel better and I would feel better and Wade Pfau would feel better and Larry Swedroe would feel better and Bill Shultheis would feel better and on and on and on. It’s a win/win/win/win/win.
If we are not going to permit people to discuss the last 42 years of peer-reviewed research, we should shut down all of the peer-reviewed journals. Those journals still exist. That signals to me that as a nation of people we still care what the peer-reviewed research teaches us about how stock investing works, no matter how afraid we are of what you Goons will do to us if we post honestly. I think that the current state of play is an unstable situation. We can’t have peer-reviewed journals and not permit people to discuss what we learn from reading what is published in them. I believe that we may all come to the realization that we need to open every site to honest posting in the days following the next Buy-and-Hold Crisis. I sure hope that that happens. We’ll see, you know?
My best and warmest wishes to you and yours.
Rob
Bernstein told you to quit your job and to get out of stocks? Really?
He said in his book that the safe withdrawal rate at the top of the bubble was 2 percent. Greaney should have corrected the error in his study within 24 hours of the moment it was brought to his attention (the morning of May 13, 2002). People use retirement studies to plan retirements.
If we were all thinking clearly, there would not be one person in the United States disagreeing with any of this. There is clearly more than one. Why? Because Shiller was right. Investors are NOT 100 percent rational (as was assumed by the people who developed Buy-and-Hold). Investors are humans. Humans are CAPABLE of rationality. There are also prone to becoming highly IRRATIONAL at times.
The Bennett/Pfau research shows that market timing (the tool we use to make stock investing more rational) is 70 percent of what it takes to achieve long-term stock investing success. So advocacy of market timing should make up 70 percent of what we hear from investment advisers. That’s not Buy-and-Hold. That’s Valuation-Informed Indexing.
My best and warmest wishes to you and yours.
Rob
And your interpretation drove you to quit your job, get out of stocks, go broke and get divorced. Got it.
Is there something that I can do for you, Anonymous?
Rob