Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
You love taking things out of context. There are undervalued stocks available today. You can seek those out, or just buy the index. Timing the market is a fool’s errand.
Trying to guess when prices will shift is a fool’s errand. We agree re that one. But adjusting your stock allocation to maintain the proper risk profile that you determined was right for you has been working since 1870, which is as far back as we have good records of stock prices. That’s price discipline. Its impossible for the rational human mind to imagine any circumstance in which that would stop working.
I’m skeptical of the idea of picking undervalued stocks. i think it’s possible. But I think it’s harder to pull off that most people realize. I think it’s better for the typical investor to go with a broad index fund. If you do that, higher valuations translate into greater risk and you need to lower your stock allocation as prices risk to keep your risk profile constant over time. If there were any research suggesting that valuation-based market timing is not always 100 percent required, you Goons would have put it forward years ago. I mean, give me a freakin’ break. Buy-and-Hold is a marketing gimmick.
Rob
You are obviously right about everything because you have hundreds of millions of dollars in your investment account, your comments sections are filled with glowing endorsements, you are the most sought after financial expert and you have been nominated for a Nobel prize.
The fact that none of those things are so does not show that this is an unimportant matter, it shows that this is a super important matter.
I am right that that the Greaney retirement study lacks a valuation adjustment. The ordinary thing would be that, within 24 hours of the moment that I pointed out the error, Greaney would correct his study and we would all get on with our lives. That hasn’t happened for 22 years now. What does that say about the state of the investment advice field, Anonymous. It doesn’t say anything good.
The one thing that it says that is good is that there is enormous potential to advance in our understanding of how stock investing works. If we can’t even get the numbers in retirement studies right, we have a long ways to advance. And we have seen during those 22 years that there are lots of good and smart people, both ordinary investors and experts in the field, who want to participate in that advance. We are very close. All that we need to do is to pull together as a nation of people and make a firm resolution to stand up to you Goons when you engage in behavior aimed at disrupting the construvive discussions that most of us want to have.
I’m clearly right that the Greaney study lacks a valuation adjustment. Even Evidence-Based Investing acknowledged that. So why no correction for 22 years? Everyone who lives in the United States and has hopes of being able to retire someday needs to know the answer to that one. It affects all of us in a very big way.
My best wishes, etc.
Rob
Everybody else is wrong and only Rob Bennett is right. Poor Rob is the victim of a mass conspiracy.
Shiller’s book is offered in libraries all across the nation. We are close.
There are reasons why we have laws against the behavior we have seen from you Goons. That sort of stuff scares people. I believe that in the days and years following the onset of the next Buy-and-Hold Crisis, we will work up the courage we need to get past you.
We’ll see, you know? I think we are a good people.
Rob