Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“ Evidence-Based Investing has acknowledged that the Greanry retirement study lacks a valuation adjustment. This guy is a general in Greaney’s Goon Army. He has no bias against Greaney.”
Evidence has said it didn’t need it and that there was no error. What does that have to do with you not fixing your financial failure?
Why would someone who acknowledges the error say that there is no need to correct the study?
That’s the problem. That’s the irrational part of irrational exuberance.
We should be seeking to be rational in our stock investing decisions. The last 41 years of peer-reviewed research could help us in that effort if we were discussing it at every discussion board and blog, without a single exception.
Rationality is a plus in this field just as it is in every other field. My sincere take.
Rob
When did Evidence say that Greaney made an error? All I see is him saying that it did include an adjustment because it didn’t need it.
Saying that the Greaney retirement study lacks a valuation adjustment is the equivalent of saying that the Greaney retirement study is in error. Shiller publiushed research in 1981 showing that valuations affect long-term returns.
It is theoretically possible that someone could take the position that Shiller’s Nobel-prize-winning research is not legitimate research. Evidence has never said that that is his belief. I have asked him on numerous occasions whether he views Shiller’s research as legitimate. On all but one occasion, he has not responded to the question. One time he responsed. On that occasion he said that “sure” he thinks it is legitimate. He did not follow up that response with a simple and clear statement the he believes that the Greaney study is in error.
Hence the 21 years of conflict. If the Buy-and-Holders cannot acknowledge that the authors of retirement studies should aim to get the numbers right in those studies, Buy-and-Hold has got big, big, big problems. If the Buy-and-Holders acknowledge the error in the Greaney study, the Buy-and-Hold house of csards comes crashing to the ground, I’m fine with that. Once we all agree that the Buy-and-Hold concept was disctredited 42 years ago, we can all get about the business of developing the first true research-backed strategy, Valuation-Informed Indexing, which is precisely the same as Buy-and-Hold except that it encourages market timing instead of discouraging it. The reason for the conflict is that the Buy-and-Holders have been unwilling for 42 years now to acknoewledge the error that they made (in days before Shiller’s research was available to us).
Once we get beyond the loony-tunes ides that market timing is not always 100 percent required for every investor and that the safe withdrawal rate cannot possibly be the same number at all valuations levels, we can all begin living better and fuller and richer lives. It’s not enough for Shiller to show that Buy-and-Hold is garbage. We all need to insist on our right to explore the far-reaching how-to implication of his amazing research at every discussion board and blog on the internet, without a single exception.
Rob
My Tesla lacks a microwave oven. Is that an error?
I personally do not believe so. But if someone said on a discussion board that he thought that Tesla’s should come with microwave ovens installled, it wouldn’t bother me. Then fact that a good number of Buy-and-Holders go ballistic when someone mentions what Shiller’s Nobel-prize-winning research teaches us all about how stock investing works in the real world tells me that even Buy-and-Holders have dounts about their strategy.
It is those doubts that sooner or later always cause bear markets and economic crises. That’s why I say that we should permit honest posting re the peer-reviewed research at every site. Once we begin doing that, the Buy-and-Holders will be able to come to terms with their doubts before they push prices so high that we all suffer a Buy-and-Hold Crisis. We are all in this together. We all want the same thing. Permitting honest posting at every site would help us achieve it.
Rob
Shiller never claimed that Greaney made an error. No one but you is claiming there is an error. To the opposite, you admitted to making an error and apologized to Greaney. Unfortunately for you, Greaney made you look like a fool and now you are spending the remaining years of your life trying to get revenge on Greaney. All you are doing is hurting yourself.
What do you think the odds are that, if you dropped all the abusive stuff and asked Shiller to participate in a discussion of the matter at the Bogleheads Forum, he would say that it is impossible to calculate the safe withdrawal rate without taking valuations into condsideration? I put them at 99.999 percent.
I wonder why you’ve never given that one a try. Some of this stuff is so hard to figure out.
Rob