Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
People were afraid to tell the story of how cigarettes cause cancer in that day just as they are afraid today to tell the story of how retirement studies that lack valuation adjustments eventually cause failed retirements.
It’s not 20 years. Prices crashed in 2008. They returned to high levels in late 2009. It’s now late 2023. That’s 14 years.
Once we open every site to honest posting re the research, we can get that number down. The more people there are who practice market timing, the quicker prices will correct. If everyone practiced market timing, there would be no irrational exuberance. It wouldn’t be an issue. We would just price stocks properly. What a concept!
Rob
Unfortunately, most people ARE market timers. Take a look at the stats. The top 10% of people own the majority of stocks because they take advantage of market timers that dump cheap shares. Take a look for yourself, Rob. Who owns the shares?
If most investors engaged in valuation-based market timing, we could never have the CAPE value (34) that applies today. Each time stocks became overpriced and the value proposition of owning stocks dropped a bit, the demand for stocks would drop and the price would return to reasonable levels.
Today’s CAPE value shows that most today are following a Get Rich Quick/Buy-and-Hold “strategy.” It’s a national scandal that that is so 43 years after Shiller published his Nobel-prize-winning research showing us all for the first time how stock investing works in the real world.
My sincere take.
Rob
If you think it is overpriced, then don’t buy the stock. Others don’t have to think like you or do like you (thank goodness). The last house I bought, the asking price was $1.25 million and is in a very hot area. I was bidding along with several others. I ended up paying $1.33 million. Two years later, the house is worth at least $1.6 million without factoring in what could be another price war. Did I overpay? Now compare that to the S&P in 2010 and every year after when you kept telling us it was overpriced. Look at where it is today. Look at how people would have lost out listening to your bad advice.
How much money do you have in your investment accounts right now, Rob?
I rest my case.
It’s not possible for anyone to “lose out” by becoming informed as to what the last 43 years of peer-reviewed says about how stock investing works in the real world. Prices are set by markets. For investors to set prices properly, they need access to the information needed to make good choices. The peer-reviewed research is obviously critically important information. We all benefit when every investor is able to talk over the far-reaching implications of Shiller’s Nobel-prize-winning research at every site because permitting honest posting re the research permits us to do a better job of establishing stock prices.
Or so Rob Bennett sincerely believes, in any event.
Rob
Wrong. We have a living example of someone losing out. It is you. Your timing scheme didn’t work. Your opinions are not peer reviewed either.
If you hadn’t seen with your own eyes the power of my words to persuade long-time Buy-and-Holders to explore a new and better way to invest in stocks, you never would have insisted that I be banned at every site on the Internet.
I mean, come on
Rob
Rob, it doesn’t matter who you convince. The numbers matter. Your market timing scheme has never worked and you are broke. Isn’t actually a good thing people are not following your advice?
The Bennett/Pfau research shows that Valuation-Informed Indexing has been trouncing Buy-and-Hold for as long as there has been a market to invest in.
You have no way of knowing what the numbers show, You don’t adjust for irrational exuberance, as the last 43 years of peer-reviewed research shows is required to get the numbers right.
If we had opened every site to honest posting re the research on the afternoon of May 13, 2002, we never would have experienced the Great Recession of 2008. That would have been better. And the CAPE value today would not be anything even remotely in the neighborhood of 34. It would be something close to 17. That would be better.
And none of our discussion boards or blogs would have been destroyed as a result of your abusive posting. That would be better. And hundreds of people would have written books on Valuation-Informed Indexing over those 22 years, so as a nation of people we would be much farther along in our development of the Valuation-Informed Indexing concept. That would be better.
Rob
And your peer reviewed research opinion, along with your magical market timing system, gave you such a great retirement plan, right Rob? Gee, we wish we could be totally broke like you.
That’s emotion, Anonymous.
That’s what Shiller was getting at when he used the term “IRRATIONAL Exuberance.” The rational thing would be to want to get the numbers right in retirement studies, not to strike out at those who point our errors in the studies.
Rob