Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
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.
Ro
“If we were all thinking clearly, there would not be one person in the United States disagreeing with any of this.”
So only Rob Bennett thinks clearly and the rest of us are delusional idiots. Got it.
Today’s CAPE value is 31, Anonymous. What does that say about our ability to think clearly?
We’re trying to do better. Shiller’s book was a best-seller. He was awarded a Nobel prize for his amazing research. Thousands of our fellow community members have expressed a desire to see honest posting re the last 42 years of peer-reviewed research permitted at every site.
But we have obvuously not yet brought it all the way back home. A nation of people that is thinking clearly does not permit the CAPE value to reach 31. We should all be working together every day to bring that CAPE value down to a more reasonable level. It takes market timing/price discipline, you know?
My sincere take.
Rob
Like I said, all of us delusional morons just can’t think straight like you can, Rob. I am so stupid, I let my account grow to over $6.4 million.
I don’t think that a CAPE value of 31 is a good thing, that would be fair to say. I’d like to see us all working together to pull that CAPE value down before it puts us in some serious hurt.
I don’t buy into your claim that we are all “delusional morons.” We would not have laws against death threats and acts of extortion if we were all delusional morons. Shiller wouldn’t have been awarded a Nobel prize if we were all delusional morons. You Goons wouldn’t be so worried about what would happen to Buy-and-Hold/Get Rich Quick if honest posting were permitted at every site if we were all delusional morons.
We’re not perfect. But we are on the threshold of achieving a huge economic advance that will help us all to live better and fuller and richer lives. That doesn’t sound so bad to me. I can live with that.
But, yes, I do believe that today’s CAPE value shows that most of us are not thinking clearly about stocks today. That’s unforuntate. But it’s nothing that opening every site to honest posting re the peer-reviewed research wouldn’t cure.
Rob