Set forth below is the text of a comment that I recenrly posted to the discussion thread for another blog entry at this site:
Remember when Wade said this: “ What is Step 2? There isn’t one. You will still be in the same position as you’ve been in for the last 10 years.”
He was wrong. You are not in the same position as 10 years ago. You are in a much worse position. Your savings are now depleted, your wife divorced you and you lost your house. It is often said that drug addicts and alcoholics finally seek help when they hit rock bottom. You have hit rock bottom, yet your are so far gone that you can’t even deal with the reality of the situation. You have experienced a major failure and your future is bleak, unless there is some kind of miracle.
Wade sees the wall of abuse that a person faces if he seeks to speak honestly re the last 42 years of peer-reviewed research as an obstacle and concludes that it is not worth the personal cost that it would take to overcome that obstacle. I don’t like the personal cost that must be paid one tiny bit. So we are in agreement re that much. But I interpret the reality of the personal cost that must be paid in a different way. I see it as the EXPLANATION of why we have not advanced in our understanding of how stock investing works despite having Shiller’s amazing research findings available to us for four decades now. I see the wall of abuse as something that must be overcome if we all are to live better and fuller and richer and freer lives in the future.
The abusive posting is part of the story of stock investing. It is the emotional part that the people who came up with the Efficient Market Theory overlooked and that Shiller focused on in producing his Nobel-prize-winning research. If we ignore the emotional stuff (which trsanslates into abusive stuff when the question on the table is whether we should permit discussion of the last 42 years of peer-reviewed research), we are missing out on understanding 70 percent of the stock investing story. That 70 percent is a big deal. It is because Shiller put that 70 percent on the table that his work was important enough for him to be awarded a Nobel prize.
So Wade concludes: “It isn’t worth it.” And I conclude: “It is really, really, really worth it, the abusisve stuff shows why it is so important to explore this stuff.” I hate the absive stuff. I don’t like it one tiny bit. But it is a motivator for me because it points to something so important that is holding us all back, our desire to convince ourselves that the emotional element of the stock investing story can be ignored and that was can all just follow Buy-and-Hold/price indifferent strategies. I don’t believe that. I believe that price indifferent strategies end up causing an ocean of human misery. I believe that Buy-and-Hold as currently practiced is dangerous stuff. I believe that Buy-and-Hold needs to be modified according to what we have learned from the last 42 years of peer-reviewed resarch. I call that modified form of Buy-and-Hold “Valuation-Informed Indexing.”
The mistake that the Buy-and-Holders made in the early days was leaving out the emotional stuff that so concerns Wade, that he cynically tells himself can never be overcome. I believe that it can be overcome. I sure hope so! I believe that the overcoming of that emotional stuff is the core job of anyone working in the investment advice field. To give up re the emotional stuff is to give up on the project of offering sound investment advice.
If Wade truly believes that it is impossible to surmount that wall, he should be looking for another line of work. I believe that he will flip back in days to come and that he will at that time regret ever having flippeed to the Goon side. Wade is not a Goon at heart. He is just afraid of what you Goons can do to harm his career. And his decision to suppress the discussion of his own sincere beliefs is certainly not helping in that regard. Each time you Goons win one, it makes things harder for everyone possessing a desire to do honest work in this field.
I naturally wish you the best of luck in all of your future life endeavors.
Rob
You said that you are the one with the emotional issues and that is why it was taking you more than a decade to finish the book and also why you can’t get a job.
We all have emotional issues when it comes to stock investing, Anonymous. That’s the entire point of Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns.
The normal thing is that we would all behave rationally. Investing in stocks successfully affects our hopes of achieving our financial goals. So you would certainly think that we would want to apply rationaliy to the stock investing project. That’s the idea behind the Efficient Market Theory, which is the theory that causes the people who developed the Buy-and-Hold strategy to conclude that market timing is not required. If all investors invested rationally, there could never be any overvaluation, It is a logical impossibility, So market timing would not serve any purpose.
Shiller showed that we are not ratioanl when it comes to stock investing, we are emotional. To say that valuations affect returns is to say that emotions matter, that they affect our choices, that we are not entirely.
Yes, I have felt emotions in response to the hate directed at me because I have said that I believe honest posting re the research should be permitted at every site. I am one of the humans too. I try to overcome my emotional reactions to the extent possible. I hope to finish my book as quickly as possble. But it has been a hard emotional road for me these past 21 years.Thart’s a stone cold fact.
What makes it all worthwhile is my understanding that we will all live better and fuller and richer and freer lives once we elect as a nation of people to permit honest posting re the peer-reviewed research at every site. Shiller revolutionized our understandong of how stock investing works. That’s great. But so far the revolution has only been an intellectual one. To make it a real-world revolution, we need to open every site to honest posting so that we can ponder the various aspects of the matter ans ask questions and so forth. On the other side of the big black wall, we will all be in agreement that since market timing is 70 percent of what it takes to achieve long-term investing success, we should be making suggestions on how to engage in market timing successfully 70 percent of what is presented at every investing site. Investing advice should be aimed at making us all more effective investors, not at covering up mistakes that we made back in the 1960s and have been covering up for 42 years now.
That’s where I am coming from re this one. I hope that that helps at least a tiny bit.
Rob
“ We all have emotional issues when it comes to stock investing, Anonymous.”
No we don’t. You are not in a position to speak for anyone, other than yourself.
I’ve seen what I’ve seen over the past 21 years, Anonymous. There are Post Archives.
The Greaney retirement study has not been corrected to this day.
Rob
Feel free to provide the links to all those people that say they have emotional issues with investing.
Anyone who tolerates an investing discussion board or blog banning honest posting re the last 42-years of peer-reviewed research is declaring that he or she has emotional issues with investing, in my assessment. I believe that all sites should permit honest posting re the research, without a single exception. It took me three years to work up the courage to say that out loud, but I did eventually pull it off.
My best wishes.
Rob
So, like everything, you pulled it out of your backside and don’t have actual proof/facts to back it up. Got it.
Okay, Anonymous.
Please take good care.
Rob