Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“Then we could all enjoy the benefits on investing in an asset class that offers high returns at minimal risk.”
I don’t think there is a better sentence that illustrates your lack of understanding of how stock investing works.
If there was an asset class that offers high returns at minimal risk then we would all try to buy it, driving up the price and therefore lowering returns.
You’re describing what we would all do if we were all 100 percent rational. We are not. That’s the entire point of Shiller’s Nobel-prize-winning research. Shiller DISCREDITED the Efficient Market Theory. Investors are humans. which means that they have an inclination to engage in highly emotional behavior at times. 70 percent of what it takes to be a successful long-term stock investor is reining in those emotional inclinations. That is done through valuation-based market timing.
The companies that make up the U.S. stock market produce profits. The investors who own the shares of those companies get to participate in those gains. Stocks are not inherently risky. The thing that has made them risky in the past is irrational exuberance. Investors start to think that valuation-based market timing might not always be 100 percent required and they bid prices up to crazy levels. Then there is a horrible price to pay. We see bull markets and price crashes and economic collapses every time the Buy-and-Hold “strategy” (no market timing now, no price discipline now) becomes possible.
It doesn’t have to be that way. We now have 43 years of peer-reviewed research showing how stock investing works in the real world. And we have seen in our discussions that many. many investors are interested in learning the realities. All that we need to do is to open every site to honest posting re the peer-reviewed research and from that point forward we all get to live better and fuller and richer and freer lives.
I vote “yes” to that. I am not able to imagine any possible downside.
Rob
https://www.passionsaving.com/rob-bennett.html
“Rob expects to publish his second book, Investing for Humans: How to Get What Works on Paper to Work in Real Life, in 2008.”
I assume you are using some sort of word processing software to write your book which has the functionality to give a word count.
How many words does you book have at the moment?
There are parts that are going to be added and parts that are going to be subtracted. Until decisions as to what to include are made, it is not possible to give a good estimate of the book length. My rough guess at this point is that it will be 200,000 words.
Rob
I thought you said you are about done. Doesn’t sound like it if you are still looking at adding and subtracting whole sections vs just editing.
My current goal is to complete the book by the end of the calendar year.
Rob
Your “current goal” means nothing. You have given us “current goal” updates for years and you just keep moving it. You use the book as an excuse for not getting a job, so if the book was actually complete, then you can’t use it as an excuse anymore.
Do you plan to use any ink to comment about Internet Goon Squads?
Your “current goal” means nothing. You have given us “current goal” updates for years and you just keep moving it. You use the book as an excuse for not getting a job, so if the book was actually complete, then you can’t use it as an excuse anymore.
Yeah, yeah.
It means something. I take every aspect of this thing seriously. There’s not one day that goes by in which I don’t take at least some tiny step toward completion of the book. I am 100 percent confident that I will get there in time.
It’s far to say that my track record re estimates of the completion time is not good. The emotional side of the project is very hard (the intellectual side is not super hard). I reassure myself that I am not the only one who has found it hard by noting that it’s been 43 years and no one (including Shiller himself) has yet written a book exploring the far-reaching how-to implications of Shiller’s amazing research in dept. As you Goons have noted on occasions, there is no entry for “safe withdrawal rates” in Shiller’s book. There should be. I sincerely believe that there will be come the end of this calendar year.
If you were capable of thinking clearly about these matters, you would be wishing me luck with the project. It helps you even though you don’t see it at this time.
Rob
If you took things seriously, you would have gotten a job, saved money, saved your marriage and acted normal. You have kept running with your story because you just don’t want to work.
Do you plan to use any ink to comment about Internet Goon Squads?
Certainly I need to address the phenomenon. And certainly I need to take care to be fair-minded in what I say.
This is the aspect of the thing that makes it difficult to write about. The Goon part of the story is the relatively unimportant part of the story. Sure, there was a lot of abusive stuff that went down. That’s hardly a shocking news development when it comes to discussions that were held on the internet. It happens every day in hundred of different places. The shocking part of the story is the tolerance of Goon behavior that we have seen on the part of the Normals. That’s the driver of the high CAPE value.
That part is hard to write. It involves being somewhat critical of my readers. Generally not a great promotional strategy. And, for the stock buying process to become more rational over time (the core goal of the entire project), things need to be said in such a way that they avoid the protective radar of the Normals. That’s a very difficult business. Sometimes I get it just right. Sometimes I see that it is going to take more work to get it just right. My job is to take as much time as it takes to get the entire thing just right. no more and no less.
Rob
If you took things seriously, you would have gotten a job, saved money, saved your marriage and acted normal. You have kept running with your story because you just don’t want to work.
Um….
Rob
Your wife and kids worked while you did nothing to support the family.
I told the truth re the error in the Greaney retirement study while you did nothing to help me get it corrected.
Rob
The only reason why your family might not hate you is because you are obviously mentally ill and need to be convinced to get help. I can’t imagine letting my kids work fast food to help support the family while I spend all my time arguing with “goons” on my personal website.
You’re leaving out the fact about how bad I am, Sensible. That’s all you really need to show here.
And I acknowledge saying that the Greaney retirement study lacks a valuation adjustment. So it’s a simple and obvious case to make!
Fair enough?
Rob