Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“ Say that there is a 1 in 100 chance that I was right in what I said in my famous post from the morning of May 13, 2002 — that the retirement study posted at John Greaney’s web site lacks an adjustment for the valuation level that applies on the day the retirement begins. Personally, I believe that the odds are more like 99.9999 percent. But let’s say for purposes of discussion that the odds are only 1 in 100.‘
Let’s say it is 0 out of 100. Wouldn’t you say that you just wasted the last 2 decades of your life repeating a lie?
No. I sincerely believe that the Greaney retirement study lacks a valuation adjustment. If it turns out that there was a valuation adjustment there all along that I just couldn’t see, then I made a mistake but i did not tell a lie.
And, if it was all a mistake, there was still great value in the 20 years of discussion that have followed from my question of whether we should be taking valuations into consideration. If it was all a mistake, I won’t be collecting a settlement check of $500 million, that much is so. But I often put up a link to that article that I prepared in the very early days in which I quoted 101 of our fellow community members gushing about how excited they were to examine these matters, how I had launched the most exciting debate in the history of the Retire Early board. Those people were enjoying learning experiences and those learning experiences remain even if it turns out that the question that prompted them was a mistake. And of course the hundreds in time became thousands and would have become millions if we had never seen any abusive posting from you Goons.
Questioning is healthy. It is a sign of life. Dogmatism is a sign of death. Something in the human spirit dies when questioning is no longer permitted. Buy-and-Hold was born in a spirit of questioning. It was developed as a scientific approach to stock investing. That’s why I fell in love with it and became a Buy-and-Holder myself once upon a time. The death threats that I saw on the evening of August 27, 2002, were aimed at putting an end to the questioning. They were the opposite of science, the opposite of what Buy-and-Hold was intended to be when it was developed.
We never will know everything. We always need to remain open to new learning experiences. Thats why I say that I want to see every site opened to honest posting, without a single exception. That will be the rule not just for Valuation-Informed Indexers but for Buy-and-Holders too. We can learn from people who we think are wrong. In fact, there is no other way in which it can happen. Every learning experience that ever takes place begins with some lacking in one’s knowledge. If there were no lacking, there would be no space to fill.
If learning is wonderful, then not knowing is wonderful in its way. The job of the journalist is to help us all learn about life and the world we live in. Sometimes people get annoyed at journalists because they ask questions that people want to tell themselves are settled. But I of course love the journalism profession with all my heart. I love learning and I love being able to bring learning to others when I am able to do so.
When I was a boy and my parents brought me to church, I was required to genuflect before I got into the pew. I did it but my heart was not really in it. When I visited a library and was surrounded by all those books asking all those questions and providing all that learning, that was when I felt an internal impulse to genuflect. The library was my church.
That’s where I am coming from re this matter, Anonymous.
Rob
101 strangers being excited about your theories 20 years ago doesn’t make it all worthwhile. In the end you wound up broke and divorced.
That’s what needs to change, Sensible. We want to encourage people to express their sincere thoughts. That way we all learn together and we all benefit together, The more incentives we offer people to explain why they believe that Shiller’s Nobel-prize-winning research is legitimate, the more posts we are going to see challenging the idea that market timing/price discipline is not always 100 percent required. Which will help us all to gradually understand things that we did not understand before and to move to a better place, where we can all live more fulfilled lives.
We are not logic-processing machines. If we were, Shiller would have published his research showing that valuations affect long-term returns and within 24 hours we all would have left Buy-and-Hold behind and moved on to a regular practice of engaging in market timing/price discipline. It doesn’t work that way. The way it works is that we listen to new ideas and gtradually incorporate them into our own thought processes as they persuade us. This happens in all fields. New ideas come along and they are considered and then gradually come to be widely accepted ideas.
That’s where that 6.5 percent of real economic gains that the stock market produces every year comes from. It comes from progress, which is another way of saying that it comes from the gradual acceptance of new ideas. Shiller has given is the most important new idea in the history of investment analysis. We have as a society spent 42 years figuring out how we are going to let go of the ideas that became popular in the days before he publshed his research and adopt the ideas that permit us all to live richer and fuller and better lives. The national debate that will follow once we have opened every site to honest posting re the peer-reviewed research is part of the process that takes us from a very sub-optimal place to a very wonderful place. I propose that we all get behind flipping the switch that permits amazing good stuff to start happening for us.
The words “I” and “Was” and “Wrong are among the most powerful in the English language. We didn’t arrive at Planet Earth with a complete knowledge of stock investing or any other subject. That’s why one of the core principles of Buy-and-Hold when it was developed was that investors should look to the peer-reviewed research for guidance on how to invest in stocks. The research is our friend, not our enemy. We should be making use of it, not trying to suppress discussion of it.
That’s where I am coming from, in any event.
My best wishes to you.
Rob
“ The words “I” and “Was” and “Wrong are among the most powerful in the English language. ”
You are broke and divorced. Learn how to use those words.
I am broke and divorced because the people of the United States have not yet reached a place where they are willing to stand up to you Goons if that is what it takes to have the discussions they need to have to come to a better understanding of the far-reaching how-to implications of Shiller’s Nobel-prize-winning research. I believe that we will get there and, when we do, we will all live better lives from that point forward. I am interested to see what happens in the days following the next Buy-and-Hold Crisis. I believe that that may be a turning point in the history of the United States. We’ll see, you know?
Rob
You are not owed anything by the people of the United States. People do not have to do one single thing for you, despite your demands, what you think you are owed or what you think you are entitled with. You haven’t earned a dime until someone else has agreed to pay you for something specific in return.
If you REALLY earned something that someone else asked you to do, for an agreed upon amount, then you have something. Unfortunately for you, that is not the case.
The people of the United States owe THEMSELVES the opportunity to live in a world in which the same laws that apply in every field of human endeavor outside of the investment advice field apply in the investing advice field as well. And there is a part of them that already understands how important it is that they deliver that gift to themselves. If we did not as a nation of people believe that there is merit in learning about what the peer-reviewed resarch teaches us all about how stock investing works in the real world, we would have shut down all the peer-reviewed journals. We would not have permitted Shiller’s book to be published or made it a best-seller. We would not have awarded him a Nobel prize or invited him to participate in interviews. There would not have been thousands of us who put forward posts expressing a desire that every discussion board and blog be opened to honest posting re the last 42 years of peer-reviewed research in this field.
I think it would be fair to say that the good news re this matter has been 20 times more good than the bad news re this matter has been bad. We are as a nation of people on our way to some very exciting places.
My best and warmest wishes to you and yours regardless of what investment strategy you elect to follow.
Rob