I’ve posted Entry #689 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called People Are Afraid to Post Even Anonymously in Support of Market Timing.
Juicy Excerpt: I often make the point that thousands of my fellow community members have expressed a desire that honest posting re the last 42 years of peer-reviewed research be permitted. They ask: So why is it that none of these people post at my blog? I point out all the abusive stuff. People don’t like to see the lives of their loved ones threatened, I argue. People don’t like to see their careers destroyed. People who support me could post to my blog anonymously, one of my critics observed today. Why don’t they?
I don’t see anyone on this board asking for your version of honesty. You have zero support, so there is no credibility in your claims of support.
Everything that I have seen during the first 22 years of our discussions tells me that 10 percent of the population of investors finds merit in Shiller’s Nobel-prize-winning research. That’s not 90 percent. But it’s not 0 percent either. 10 percent of the population of investors is a lot of people. It’s millions of people. It’s that large number of people that made Shiller’s book a best-seller. So I have plenty of supporters. That’s why we have seen thousands of our fellow community members express a desire that honest posting re the peer-reviewed research be permitted at every site.
Still, today’s CAPE value is 34. Not good. How the heck did we elect as a nation of people to permit the CAPE value to rise to 34 at a time when we have 43 years of peer-reviewed research showing us how dangerous it is not to regularly practice valuation-based market timing? Why aren’t we all working together to bring that CAPE value down once we see it beginning to get out of control?
We have Shiller’s research. We have his book. We have his Nobel prize. We have our common sense. But all of that has not been enough. We also have that Get Rich Quick/Buy-and-Hold impulse that resides within all of us telling us “oh, it may all turn out different this time than how it has ever turned out before, a CAPE of 34 isn’t so terrible, there’s no need for valuation-based market timing, just Stay the Course a little longer.” So here we are.
We know intellectually how stock investing works because we have Shiller’s research available to us. But we don’t WANT to know. We want to believe that the Buy-and-Hold stuff is real. We want to believe that the Get Rich Quick stuff is real. We want to believe that the safe withdrawal rate is always the same number. We want to believe that the number on our portfolio statement is an accurate reflection of the value of our stock holdings. Our Get Rich Quick desires are stronger than our desire to understand the realities of stock investing.
For now.
Will it change in the days and years following the onset of the next Buy-and-Hold Crisis?
I think so. I believe so. I don’t see how we can continue doing this sort of damage to ourselves in a world where you can walk down to the nearest library and pick up a copy of Shiller’s book. I think there will come a time when we will elect as a nation of people to open every site to honest posting re the last 43 years of peer-reviewed research. I believe that that day is coming and I believe that we will all live better and fuller and freer and richer lives once we take the step of opening every site to honest posting re the peer-reviewed research.
That’s where I’m coming from, Anonymous. I have plenty of support. Nothing close to a majority. But enough that we should be permitting people to discuss the realities as revealed by the peer-reviewed research at every site, without a single exception. I think we are close. I think we will make it to the other side of the line in time. I’m sure hoping for that outcome.
We will have to exercise some patience to see how it all plays out in the real world.
My best wishes.
Rob
Every thing you see is not what everyone else sees. The only way to know who is right and who is wrong is by looking at track records. All of your predictions failed. Your retirement plan failed. The buy and holders have had successful outcomes. When you turn 60, it is now too late to try and undo the history and fix problems.
And yet, when I look at the Greaney retirement study, I don’t see a valuation adjustment.
Please explain.
Rob
It has been explained thousands of times Rob as to why it was never needed. Your wife (now ex-wife) explained to you why you needed to get a job to help pay the family bills, but you didn’t listen. She divorced you. Wade Pfau told you about all the harm you caused him, but you didn’t listen. He stopped talking to you. Shiller told you not to time the market with CAPE. You ignored him and went broke.
See the pattern? You don’t like to listen.
Now I see!
(Just joking around, Anonymous.)
I wish you all good things, in any event.
Rob
Notice that no one is asking you for anything. You are the one making all these demands. No one has to do a single thing to make you happy. If you want something done, do it yourself. Fix your own retirement failure, we are not lifting a finger. We already gave you advice, but you ignored it. As such, you can live with your failure and figure out how to get out of your mess on your own. Good luck.
If everyone was 100 percent happy with Buy-and-Hold, we never would have permitted Shiller’s research to be published. We certainly would not have awarded him a Nobel prize.
The Get Rich Quick impulse is part of us. That’s clear enough. But our Get Rich Quick impulse is not the entire story. We have been trying for 43 years now to work ourselves to a better place. I think we are going to pull it off.
But we’ll see, you know?
Rob
Instead, you have adopted the “Get Broke Quick” method.
30 years of consistent saving via buy and hold is hardly “quick”. Instead, it is a slow, methodical and proven way of retiring successfully.
Did the Great Depression “prove” that pushing stock prices up to unsustainable levels is a good idea?
I see it just the other way around. We can all enjoy annual returns of 6.5 percent real without permitting any irrational exuberance whatsoever. I vote for that. A 6.5 percent real return should be plenty. Relentless promotion of the Get Rich Quick/Buy-and-Hold stuff is killing us.
My sincere take.
Rob