Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“Do you believe that Robert Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns is legitimate research, Evidence?”
Of course.
That’s good to hear.
That’s why I say that we all should be practicing market timing on a daily basis. I certainly don’t believe that we should be changing our stock allocations on a daily basis. The historical data shows that we can do just fine making allocation changes only once every ten years on average. But we should always be aware of where the CAPE value stands and of what it would mean for our stock portfolio if our stock allocation came to no longer make sense for us given shifts in valuation levels. That’s something that we should be thinking about in the back of our mind on a daily basis.
I don’t say that I wouldn’t believe in market timing had Shiller not piblished his amazing research findings. I like to think that common sense alone would have brought me around to that view (there has never in the history of humankind been a market that could remain functional without the participants in that market practicing price discipline). But I think it was a breakthrough when Shiller published research showing that what common sense tells us must be so re stock investing really is so in the real world.
My best and warmest wishes to you and yours.
Rob
From the Monevator:
“Rob Bennett used to comment on this site a lot until I got fed up with his “strident” approach and warned him I’d start delete his posts. He carried on (IMHO) so I started deleting them. To his credit he finally took the hint and stopped commenting, which saved us all some time. If you Google “Rob Bennett” in the Search box in the sidebar you’ll see some of his side of the story. Any particular contribution is usually fine to read, but it was the relentlessness of it that took its toll. He’s met a similar fate across a great many sites across the Web”
I thought you said you were banned due to the Greany Goons, yet this shows it is your behavior.
I’m not one-tenth as relentless as the Buy-and-Holders, Anonymous. Investors are exposed to the Buy-and-Hold Model everywhere they go. They need to be exposed to the Valuation-Informed Indexing Model as well so that they can decide for themselves which model to follow.
I don’t deny that I am relentless in my advocacy of Valuation-Informed Indexing. If the Buy-and-Holders were less inclined toward the use of intimidation tactics, there would be more people advocating Valuation-Informed Indexing strategies and I would feel that I could cut back. I think that that would be great. I have been arguing since the early days that we need to “normalize” our discussions. People who believe in Buy-and-Hold should feel 100 percent free to advocate Buy-and-Hold and people who believe in Valuation-Informed Indexing should feel 100 percent free to advocate Valuation-Informed Indexing.
It should be possible for us all to be friends with one another and to accept that there are two academic models for understanding how stock investing works, not one.
It is not solely the Greaney Goons who have caused the problems. It is defensiveness on the part of Buy-and-Holders. The comment above from the Monevator is goonish in tone, The proper way to respond to someone who offers a view on investing not the same as your own is to thank him for stopping by and sharing his thoughts. If you want to make a point coming from the other side, that is of course fine. But it is not required. It is also fine to just let people visting the site come to their own conclusions.
There is nothing “strident” in saying “I think you are wrong in the point you made in your blog.” That’s what people who comment on blogs are supposed to do (unless they agree with the points made). The entire problem is that, since 1981, when Shiller published his Nobel-prize-winning research showing that market timing/price discipline is required for every investor at all times, there have not been enough people exploring that far-reaching how-to implications of Shiller’s research findings. When I do it, it comes as a shock to people like Monevator. I want us to get to a place where we no longer find that even a tiny bit shocking. That’s why I say (relentlessly!) that we need to open ever site to honest posting re the peer-reviewed research, without a single exception. Once we see this stuff discussed everywhere alll the time, the frictions will dissipate and we will all feel respect and affection for each other.
Monevator could help, you know. He could encourage those who have puts up posts in “defense” of Lindauer and Greaney to knocl off the funny business. The only way we ere ever as a nation of people going to get to the place where we all deep in our hearts want to be is for people like Monevator to speak up. There is no other way it can be done.
Do you think it would have been better had I kept it zipped re the error in the Greanrey study? Would that have been a less “strident” approach? My view is that it would just have been a more cowartdly approach. I was not a tiny but “strident” from May 1999 through May 2002, when I wrote only about saving strategies. Did that make the problem go away. It appears not. The only way to solve the problem is to address it. It is my strong belief that as a nation of people we need to do that by the close of business on Tuesday, if not a good bit sooner.
Rob
Do you think it would be better if we kept it zipped as to why you are wrong about Greaney? Do you think we should keep in zipped as to why you are wrong about not getting a job? Do you think we should keep it zipped as to why you forced your ex-wife to get 6 jobs? Do you think we should keep in zipped as to why you are lazy and can’t even finish a simple book in 10 years?
I think you should try to realize that we are all on the same side, that we all want the same thing, to learn what we need to learn to become effective stock investors. So someone who points out an error in a retirement study you like is acting as a friend. He is bringing something to your attention that you need to take into consideration.
Is Shiller a bad guy? I think he’s a great guy. I think we should be celebrating him.
Do I think that the people who advocate Buy-and-Hold are bad guys? I do not. I am grateful when they share their thinking with me because I can learn from it.
It is by sharing mutual respect and affection that we can all enjoy a great Learning Together experience. Learning is the one true free lunch in this world.
Rob
“ I think you should try to realize that we are all on the same side”
That is not what Wade said. That is not what your ex-wife said. That is not what Shiller said.
The 16 months that Wade spent working with me were the happiest days of his life. He was thrilled by each new discovery that we made together re how stock investing works in the real world. The only thing that caused me to flip is that he did not want to see you Goons destroy his career by telling lies to his employer. Had Bogle let Wade know that he would back him up if you Goons attacked, Wade would not have been afraid and he would not have flipped.
My ex told me that she believed that I was onto something important with my investing work. The only problem that she had with the marriage is that money was not coming in for a long time. Which again was attributable to the abusive behavior of you Goons.
All of my work is rooted in Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns, So again there would have been no problem if things in the investing field were operating according to the rules that apply in every other field of human endeavor. If that were the case, Shiller would be commenting on every column that I write at the Value Walk site and we would be fast friends. The reality, of course, is that Shiller has been reluctant to address the how-to implications of his research ever since he publushed it because it upsets the Buy-and-Holders so much when anyone does that. Again, the problem is the ban on honest posting, not anything that I have done.
We are all on the same side. We just need to figure out as a nation of people how we are going to bring the 42-year cover-up to an end. It is hard to acknowledge that lots of powerful and wealth and well-connected people have been covering up the realities for so long a time. It makes the Buy-and-Holders look really, really bad for anyone to speak openly and clearly about the core reality of stock investing that market timing/price discipline is always 100 percent required for every investor (just as is the case with every other market that ever existed). But what choice do we have? If we don’t come clean, we are going to continue to see these horrible Buy-and-Hold Crises that cause so much human misery. Is that the answer?
Coming clean helps the Buy-and-Holders as much as everyone else. The Buy-and-Holders made lots of highly valuable contributions. But they don’t do as much good as long as most investors believe that it is okay to fail to practice market timing/price discipline. Opening up the internet to honest posting permits the good stuff that the Buy-and-Holders did to have a positive effect in the world.
We are all on the same side. And it is clear from the first 21 years of out discussions that lots of Buy-and-Holders would like to be free to post honestly. Why do you think Bill Bernstein wrote in this book that the Buy-and-Hold retirement studies got the numbers wildly wrong? The man has a conscience. He would love to be able to speak honestly about all sorts of matters. But he knows what you Goons will do to him if he dares to “cross” you. We need Bernstein and all the other Buy-and-Holders feeling free to do honest work. We need to lift the ban on honest posting, We need to recognize that we are all on the same side in wanting to learn what it takes to invest effectively for the long run.
Rob
If your wife was on your side, would she have divorced you? If Wade was on your side, would he have stopped talking to you? If Shiller was on your side, wouldn’t he be pushing your timing scheme?
If investors were rational, would there be no bull markets.
Buy-and-Hold describes stock investing as it should be. Investors are engaged in the rational pursuit of their self-interest. So prices are always set properly. And the numbers on portfolio statements can be counted on to represent the realities.
That’s not the world we live in, according to Shiller’s Nobel-prize-winning research. Stock investors are humans. Humans get involved in bad relationships and drink to excess and gambel to excess and smoke and all the rest. You can’t help humans to live good lives if you don’t take their self-destrucitve emotionalism into account. And you can’t help investors to invest in stocks effectively if you don’t take their inclination to create irrational exuberance into account.
We’re all on the same side, Anonymous. But some of us are behaving in an irrational manner. We see the last 42 years of peer-reviewed research as a threat to our Buy-and-Hold/Get Rich Quick fantasies.
When we have opened every site to honest posting re the peer-reviewed research, Shiller and Pfau will be at every site helping us to become better investors, just as they always would have been if they hadn’t become aware of the way the members of the Buy-and-Hold goon aquads behave when they see their precious irrational exuberance challenged. There’s a part of you that wants to invest effectively. That’s why this stuff drives you so nuts. You are a person divided. You want to invest effectively. But you also want the irrational exuberance in your portfolio to be real. And it is driving you bonkers.
We are all on the same side. We now have 42 years of peer-reviewed research showing us how to achieve our goals. But we have not quite worked up the courage to give ourselves permission to discuss that research at every site. We are as a nation of people working on it. We are making (very slow) progress. We are not yet where we want to be. But we are close.
My sincere take.
Rob
“We are all on the same side.”
Again, no we are not. When people stop talking to you, they are not on your side. All the major boards banned you. Wade stopped talking to you. Your wife divorced you. How much more evidence do you need before you accept the fact that no one is on your side.
I would need to see that Shiller was not able to get his research published in a peer-reviewed journal. I would need to see that he could not get his book picked up by a major publisher. I would need to see that he was not awarded a Nobel prize. I would need to see Wade Pfau conclude after spending 16 months researching my investing ideas that: “No, Virginia, Valuation-Informed Indexing doesn’t work!” I would need to see something less than thousands of our fellow community members express a desire that honest posting re the last 42 years of peer-reviewed research be permitted at every site. That sort of thing.
Rob
If people were on your side, they would post here. Instead, they run away from you, just like your ex-wife.
If you Goons had never advanced an abusive post, there would be thousands of people posting here and I would be a multi-millionaire today.
You do it because you have seen the positive reaction to me and my ideas on stock investing everywhere I have posted them. You see no way to hold back the tide except with insane amounts of abusive posting that drive people away. The question on the table today is whether that will continue to work in the days following the next Buy-and-Hold Crisis. I believe that it will not. I cannot say for certain. There has never been a situation like this before. But I believe that the next Buy-and-Hold Crisis will cause the percentage of the population that believes that there is merit to Shiller’s Nobel-prize-winning research to increase from 10 percent to 20 percent and that at that point the abusive posting will no longer be enough to hold back the learning experience that we all need to participate in.
We’ll see, you know. I believe that we are all on the same side (pro-learning) and that that is going to become clear in the days following the next Buy-and-Hold Crisis. It won’t happen immediately. If prices recover quickly, it won’t happen at all. But, if price falls hard and remain down for many years, which is what we should expect to see happen in the event that the stock market continues to behave in the future somewhat as it has always behaved in the past, I think we will see the strongest surge of economic growth in our nation’s history as the result of our collective decision to permit honest posting re the last 42 years of peer-reviewed research in this field.
Wish us luck!
Rob
If there was an actual death threat, you would post it here as proof. People can also post anonymously.
People run away from you. Just ask your ex-wife.
If Greaney had corrected his study, you would put forward the page containing the correction.
It’s been 21 years.
Rob