“Doing Something About the Intimidation Tactics Would Take the Fraud Element Out of It. That’s the Big Thing. I Would Recommend Down the Line That Mutual Fund Companies Provide Both the Official Numbers for Stock Portfolio Value and the Number After It Has Been Adjusted for the Effect of Irrational Exuberance. I Would Encourage All Investors to Work Together to Pull the CAPE Value Down Once It Rises Significantly Above Fair-Value Levels.”

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

Companies issue quarterly and annual reports, and they are audited. Falsifying the information on these reports leads to prison sentences. See Ken Lay. What SPECIFIC remedies do you suggest?

I believe that we need to open every discussion board and blog on the internet to honest posting ee the last 43 years of peer-reviewed research in this field. All laws that apply in every field other than the investment advice field should apply in the investment advice field as well. So no death threats, no extortion to stop researchers from publishing honest research, no defamation to suppress discussions of the research, etc.

That would do it. We have seen strong interest among experts in the field to report on what the recent research says and strong interest among ordinary investors to learn as much as they can about the subject. Everyone is not going to switch to Valuation-Informed Indexing immediately. It wouldn’t be realistic to expect such a thing. But I am highly confident that we could get the percentage of Valuation-Informed Indexers up from 10 percent to 20 percent in six months if honest posting were permitted. And it would grow from there.

Doing something about the intimidation tactics would take the fraud element out of it. That’s the big thing. There are still smokers today even though it has been years since researchers were afraid to let people know about the research showing that smoking causes cancer. But the number of smokers has been reduced significantly. And those who smoke at least know what they are getting into. That’s how it should be with Buy-and-Hold. People should be able to learn how dangerous and be able to make up their own minds after hearing both sides of the story.

I would recommend down the line that mutual fund companies provide both the official numbers for stock portfolio value and the number after it has been adjusted for the effect of irrational exuberance. I would encourage all investors to work together to pull the CAPE value down once it rises significantly above fair-value levels. And of course I believe that all retirement studies not including valuation adjustments should contain language explaining why many people believe that such adjustments are needed to get the numbers right. If people elect to ignore such warnings, so be it. But all should be properly informed of what the research shows.

It’s too important a matter to just let the industry turn a quick buck exploiting people’s weakness for Get Rich Quick approaches. In the long run, there would be more money for everyone as a result of us having a more stable stable economic and political system.

Rob