Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
I am describing what would happen if your high returns at minimal risk fairy tale ever happened.
You want high returns at minimal risk assets available to you but for no one else to notice, because as soon as it was noticed other people would outbid you.
You think that opening up other websites to your “information” would induce people to sell you high return low risk assets at a bargain price. It simply won’t happen.
It is simply impossible for all of us to load up on high return low risk assets.
You believe in the returns fairy, Bill Bernstein explains why you shouldn’t http://www.efficientfrontier.com/ef/403/fairy.htm
A return of 6.5 percent real is not a “high return.” That’s the return justified by the economic realities.
It is the Buy-and-Holders who are seeking returns higher than that. I am saying that everyone should be happy with the 6.5 percent real return. When you push prices up beyond that (by failing to engage in valuation-based market timing), you increase risk dramatically. Then you act like risk is just a normal part of stock investing.
It’s not normal at all. It came to appear normal in the years before we had access to Shiller’s Nobel-prize-winning research findings showing us how things work in the real world. But there’s nothing normal about failing to exercise price discipline when buying something. I every other market that exists, people know to do that. It’s only in the investment advice field that people came up with this loony-tunes idea that everything might work the opposite of how comTghmon sense says it must work and market timing/price discipline might not be 100 percent required for all investors.
There’s nothing wrong with a return of 6.5 percent real. That’s a great return. Those house of horrors that follows from pushing the return up above that just isn’t worth it.
My sincere take.
Rob
Shiller does not say what you say. You throw his name around because you think it somehow gives you credibility. It does not. It is Shiller’s work. Not your work. If there is some kind of interpretation to be had, then it is up to Shiller to do so. Meanwhile, you are free to do your own research and write your own papers and make your own conclusions. Stop hijacking what someone else has done in order to spin it top further your agenda.
I say that Shiller says that valuations affect long-term returns. I say that Shiller believes that there is a phenomenon in the stock buying process that he calls “irrational exuberance.”
I also say that all of us (very much including Shiller himself) should be talking about the far-reaching how-to implications of his amazing research at every discussion board and blog, without a single exception. The core aim of the entire 22-year project is to make that happen. What I say is relatively inconsequential. What matter is what thousands and thousands of people say. We are not hearing those thousands and thousands of people today because they fear what you Goons will do to them if they express their sincere thoughts. That needs to change.
I have a funny feelings that I will not help the cause of it changing by agreeing to censor myself re the error in the Greaney retirement study (it lacks an adjustment for the valuation level that applies on the day the retirement begins).
Rob
Who cares what you say. It is not your work and you are not an expert.
If no one cared, you would not have insisted that I be banned from even a single site. Your behavior for 22 years now shows that you believe that plenty of people care.
Rob
You deserved to be banned for your behavior. You hijack threads, refuse to answer questions and lie constantly, not to mention calling respected people like Jack Bogle a con-man.
And I say that the Greaney retirement study lacks a valuation adjustment!
I’m so bad!
Rob
Your error about Greaney is not why you are banned. Why don’t you host a segment on your website where all the board owners can come on a live webcast explaining to everyone why they really banned you. Are you game for that?
I’m game for a discussion of whether or not the Greaney retirement study contains a valuation adjustment.
I say it lacks one. I stand by that one 22 years after I first raised the idea.
Rob
We have already had the discussion as to how you are wrong about Greaney thousands of times. Let’s have a live webcast on your site discussing the reasons for your banning. We can also discuss the criminal acts you claim have happened as well.
You forced your wife to work 5 jobs and your then-high school-aged kids to work fast food to support the household over this. Greaney’s study does in fact lack a valuation adjustment. The reason is because Greaney doesn’t believe it needs one. This is what you’ve decided to ruin your life over.
We have already had the discussion as to how you are wrong about Greaney thousands of times. Let’s have a live webcast on your site discussing the reasons for your banning. We can also discuss the criminal acts you claim have happened as well.
Say that there’s a 1 in 100 chance that I am right in what I have been saying about the Greaney retirement study for 22 years now –that it truly does lack an adjustment for the valuation level that applies on the day the retirement begins. If that’s so, that’s something that we should be talking about at every discussion board and blog on the internet, without a single exception. It affects every American’s hopes of achieving a decent retirement in a big way.
I believe that the chances are something like 99.9999 percent. But for purposes of discussion let’s say 1 percent. In that event, we all need to pull together as a nation of people and do everything in our power to get every site opened to honest posting by the close of business today, If we fail to achieve that goal, that would mean that the biggest act of financial fraud in our nation’s history would get that much bigger.Not good.
Once every site has been opened to honest posting re the peer-reviewed research, we can talk about all sorts of other stuff. That one is so big that we can hardly go wrong once we achieve success re that one and can hardly go right if we fail to achieve success re that one.
My sincere take.
Rob
You forced your wife to work 5 jobs and your then-high school-aged kids to work fast food to support the household over this. Greaney’s study does in fact lack a valuation adjustment. The reason is because Greaney doesn’t believe it needs one. This is what you’ve decided to ruin your life over.
It makes me happy to hear you say that the Greaney retirement study does in fact lack a valuation adjustment, Sensible. Please mark me down as saying that I believe that it needs one. I believe that Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns is legitimate research.
I would say that I “ruined my life” over my feeling that I needed to do right by my fellow community members to be able to sleep at night. There were people at the Motley Fool board who used the Greaney study to plan their retirement. I know this. I was there.
It is an amazing reality that someone could “ruin their life” simply by posting honestly re what the peer-reviewed research says about how to invest in stocks effectively for the long run. Given that that is the current-day reality, I think that it would be fair to say that we all need to pull together to get the word out to every investor on the planet. That’s pretty darn important stuff, no. If we fail to get the word out, it seems entirely possibly to me that the stock market would continue working in the future somewhat as it has always worked in the past.
That’s where I’m coming from re this matter.
Rob
Rob
So tell us how you think you saved your fellow community members over at the Motely Fool? Would anyone over there say that you saved them? Why aren’t you able to communicate with others and still work a job just like the rest of us? What is so different and special that you do versus everyone else that supports their family?
I tell the truth about stock investing.
There would be universal support for telling the truth if there had never been a cover-up. The people who developed Buy-and-Hold did not have Shiller’s amazing research available to them when they were doing so. So they took a wild shot in the dark on the valuation-based market timing question and they learned years later that their wild shot in the dark was wildly wrong. What to do? The best thing for every single person involved would have been to acknowledge the error. Instead, they elected to cover it up. Now that we are 43 years down the road, it is harder than ever to come clean. We need a responsible journalist to get the story out to every investor in the world and to get us all back on the right track. There is not one person who benefits from a ban on honest posting re the research.
Had we been permitting honest posting re the research all along, the Greaney retirement study would have been corrected long before I came on the scene. Greaney probably would never have made the mistake in the first place. Wouldn’t that be a better world? How do you think we are going to get there if we all continue to live in fear of you Goons? Getting the numbers right in retirement studies is a good thing.
Rob
In your world there is a massive coverup when you are banned, yet okay if you block people’s posts. In your world, your posts are honest, but not posts by others. In your world, you decide as to what constitutes peer-reviewed research. In your world, you dictate that Greaney made an error and that everyone else must agree with that statement.
Sorry, but won’t choose not to live in your world of delusion. We live in reality because we don’t want to be broke in our retirement years.
I naturally wish you all the best that this life has to offer a person, Anonymous.
I like to think that that might help at least a tiny bit. Given the circumstances, it’s the best that I can do.
Rob