Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Rob,
It is name calling and abusive. Making up stories about going to prison is abusive. For the last two decades, you have told us all about a buy and hold crisis coming in the next 2 or 3 years will result in millions of us losing our jobs, yet each prediction comes and goes with nothing happening. That is just fear mongering. Of course your intent is just to try and distract from your failures, but you are doing it in a way that is clearly abusive.
I don’t think it’s abusive. I think it’s descriptive. The ban on honest posting in the investment advice field is the most important public policy issue facing the United States today. It’s a strange one. We have laws against death threats and extortion and so on that apply in every field of human endeavor outside of the investment advice field. So it’s hard for people to understand what is going on in the investment advice field.
My job as a journalist is to tell that story as clearly and as fully and as charitably as possible. Referring to you Goons as “Goons” is part of that (while at the same time noting the positive contributions you have made from time to time, which is something that I have also done).
Say that there is a one-in-a-hundred 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 truly does lack an adjustment for the valuation level that applies on the day the retirement begins. After 21 years of this stuff, I would put the odds more at something like 99.999 percent. But let’s just say that there is only a 1 percent chance that I was right all along. If that’s so, then we should be talking about the error that Greaney made in his study at every site on the internet, even on non-investment sites.
It’s important to keep in mind that Greaney is not the only one who has made that error. There have been thousands and thousands of newspaper and web site articles that have made reference to the “4 percent rule.” It’s become conventional thinking in this field that a 4 percent withdrawal is safe even though we have 42 years of peer-reviewed research showing that it is a logical impossibilty that the safe withdrsawal rate is the same number at all valuation levels.
We need to get word of what the last 42 years of peer-reviewed research says out to every citizen of this nation. It’s not just that we are going to see millions of failed retirements if we fail to do that. Heaven knows that that’s a very bad thing, but that’s not even the worst of it. What are the political implications if we see millions of failed retirements and millons of people losing their jobs and all the rest and only then do people learn that peer-reviewed research was published in 1981 showing that there is zero chance that a pure Get Rich Quick/Buy-and-Hold strategy could ever work for a single long-term investor?
Opening the entire internet to honest posting re the peer-reviewed research is not something that benefits only Valuation-Informed Indexers. It benefits Buy-and-Holders greatly. We all are capable of making mistakes and, by opening the internet to honest posting re the peer-reviewed research, we protect ourselves from taking on financial and criminal liability for those mistakes. The ban on honest posting has put our Buy-and-Hold friends in a horrible place. They have made lots of positive contributions. They deserve better. We all should be doing everything in our power to see the ban lifted by the close of business today, if not a good bit sooner.
That’s where I am coming from re this one in any event, my dear Goon friend.
I naturally wish you all the best that this life has to offer a person regradless of what investmet strategy you elect to follow, in any event.
Rob
Teslas don’t have microwave ovens. Submarines don’t have screen doors. Greaney’s study doesn’t have adjustments. See the common thread? They all don’t need those things.
Do you believe that Robert Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns is legitimate research?
Rob
I believe Robert Shiller when he said that you should not time the market with CAPE. I don’t believe your interpretations of anything. If you would have listened to him, you wouldn’t be broke.
Shiller of course never said that. In fact, he published a paper URGING investors to practice long-term market timing because the CAPE value was insanely high. If you truly believed that Shiller does not believe in market timing, you would invite him to appear at the Bogleheads Forum and respond to questions about the matter. I have been recommending that course of action for many years now and it has not happened. I wonder why.
Some of this investing stuff is so darn hard to figure out!
Rob
He did say it, but you just don’t want to accept it. Shiller is welcome at the Bogleheads forum, but we don’t need to ask a question that has already been answered just to make you happy. We don’t care about your recommendations. Why should we care given your track record.
Okay, Anonymous.
Please take good care.
Rob
You are the broke guy. You are the one that should be asking for help instead of trying to dictate things to other people. Your bank account does not match your ego.
Woe is me, Anonymous.
I naturally wish you all the best that this life has to offer a person regardless of what investment strategy you elect to follow.
Rob
Why should anyone take financial advice from a broke guy? How does that make any sense?
It makes sense to take the last 42 years of peer-reviewed research into consideration, Anonymous. Even the Buy-and-Holders were in favor of looking at the peer-reviewed research before Shiller published his Nobel-prize-winning research showing that valuations affect long-term returns.
Valuation-Informed Indexing is today what Buy-and-Hold was intended to be when it was being developed. Research is a living thing. When old beliefs are discrdited by new research, a person who possesses a true belief in the value of research leaves the old, discredited ideas behind and embraces what he has learned from the new research. If we had all been thinking clearly, we would have all launched a national debate on the the far-reaching how-to implications of Shiller’s amazing research on the day (in 1981!) when it was published.
My sincere take.
Rob
As said thousands of times, your opinion of what one guy said is not “peer-reviewed research”. Have you ever conducted any kind of research? Do you know how to even run a full retrospective study? What formal education do you have with respect to research in the investment field? You like to put labels on things in which you have no fundamental knowledge or training.
I don’t need any specialized knowledge and traning to be able to read the title of a book, Anonymous. The title of Shiller’s book is “Irrational Exuberance.” Does that sound like a good thing to you? It sounds like a bad thing to me.
If irrational exuberance is a bad thing, then all investors should be working together to limit it to the greatest extent possible. The only way to do that is for investors to lower their stock allocation when prices get out of cotrol and the long-term value proposition of stocks is dimished That’s market timing! Not the bad kind that never works (short-term timing). The good kind that always works because it is price discipline and price discipline has been absolutely essential in every market that ever existed going back to the beginning of time.
Or so my formal education in reading the titles of books informs me.
My best wishes.
Rob
You make critical decisions based on book titles? That sounds really scientific (note sarcasm). Silly me. I rely on facts based on outcomes.
The book title signifies an important reality. It is a fact that irrational exuberance exists and that all investors need to do what they can to rein it in. Both for themselves and for the nation of people they live in.
Market timing/price discipline rules! Get Rich Quick/Buy-and-Hold not so much!
My sincere take.
Rob
People often argue about which sports team is better. We know that someone is right and someone is wrong. Games have a scoreboard for a reason. Look at your outcome. You are broke. Outcomes tell us who is right and who is wrong.
The last 42 years of peer-reviewed research is the more important scoreboard, Anonymous. The difference is that the peer-reviewed research looks at the entire history of the stock market whole your scoreboard is how things feel at a monent in time when irrational exuberance is out of control andthe CAPE value is scary high.
Rob
Book titles are not research. You have no clue as to what you are talking about. Even Wade pointed out that you don’t even know the different between a mean and a median. You just throw around the words “peer reviewed research” without one bit of understanding of the subject.
If you really knew what you are talking about, you wouldn’t be broke and you wouldn’t be isolated from the rest of the world.
Okay, Anonymous.
I do wish you all good things, in any evemt.
Rob