Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“But I definitely believe in practicing price discipline when buying them, just as I believe in practicing price discipline when buying anything else.”
Other investors also practice price discipline when selling stocks.
They refuse to sell stocks to Rob Bennett at the knock down prices he wants to pay, whenever much higher prices are available on the free market.
As with most investing topics you are incapable of seeing both sides of an argument.
You don’t realize that just as you are unwilling to pay more than a certain price for stocks, other investors are unwilling to accept less than a certain price for stocks.
Those willing to pay the market price for stocks will continue to participate in capital markets.
Those who are unwilling to pay the market price will sit on the sidelines for about 30 years.
The fair-value price for stocks is not a “knock-down price.” Yes, I would like to pay the fair-value price for the stocks I buy. Why wouldn’t I?
We can never know the market price for stocks until we permit the market to function properly. The market obviously cannot function properly until we open every site to honest posting re the peer-reviewed research. Investors need to be able to act in their self-interest for the market to function properly. Investors cannot act in their self-interest for so long as there is an internet-wide ban on honest posting re the peer-reviewed research.
Rob
Question: How much is a house worth?
Answer: It is worth the amount that someone else is willing to pay for it.
Question: How much is a plot of land worth?
Answer: It is worth the amount that someone else is willing to pay for it.
Question: How much is a painting worth?
Answer: It is worth the amount that someone else is willing to pay for it.
Question: How much is a share of stock worth for any company?
Answer: It is worth the amount that someone else is willing to pay for it.
So, it is simple. If you want something and you are willing to pay the price that is asked by the owner, then buy it. If you don’t like the price, then don’t buy it. You don’t just demand that other people have to lower their price on a particular asset just because you say so and that YOU think it is overvalued. Your faulty thinking has led to you going broke, while the rest of us have done very well, from a financial perspective. We are not here to make you happy. We are not here to fix your problems.
No one can determine what something is worth unless the information they need to make that determination is available to them. Once a ban on honest posting re the peer-reviewed research Is put in place, the market is no longer functional. So you get the crazy and dangerous CAPE level we see today in the stock market.
I would permit honest posting re the peer-reviewed research. Then I am confident that the price that people were willing to pay for stocks really did reflect their true value. It’s the ban on honest posting re the peer-reviewed research, enforced by the sorts of people who have posted in “defense” of Mel Lindauer and John Greaney, who have been holding us back for 22 years now.
Where I’m coming from.
Rob
Because Rob Bennett is the only honest person in the world and the rest of the world just needs to get in line with what he wants. Mel Lindauer, John Greaney and every other buy and hold person needs to just keep it zipped. Rob has told all of us that he is the leader of the entire investment community, so just do what he says. Look at how all of it has worked out for Rob. That is proof enough.
It’s not just Rob Bennett. We have seen thousands of our fellow community members express a desire that honest posting re the peer-reviewed research be permitted. I am happy for everyone to hear what Mel and John say. But only when they follow the published posting rules and the laws of the United States. When they violate the rules and the laws, I say that they should be given the boot.
It’s worked out a lot better for me than it has worked out for anyone who put up a post on “defense” of Lindauer or Greaney. I never sold out my fellow community members. I can sleep at night.
Where I’m coming from.
Rob
Rob Bennett is a totalitarian, a would-be tyrant!
He says that the Greaney retirement study lacks a valuation adjustment, that much is certainly fair to say.
Rob