“Calling Your Readers Stupid Liars Is Not the Conventional Path to Journalism Success. But to Tell This Story Clearly and Fully and Accurately Its Something That Must Be Said.”

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

“ There’s a lot of value in putting the material from the 700 columns into one continuous narrative of a manageable length. That’s why books exist. Having the entire story in one place helps people appreciate how different aspects of the question relate to each other.”

So it is just a repeating the same information that you have already posted thousands of time and the production of a book is merely an organizational exercise. This is simple work and should be MUCH faster versus writing a book from scratch. Either you don’t intend to finish the book or your are just stretching it out as long as possible to avoid having to get an actual job.

There’s not a lot of intellectual content to this on either side, Anonymous. There are thousands of markets out there and in every single one price discipline is absolutely essential, the thing that makes the market work. It’s hardly a big surprise that Shiller showed that that’s how it works in the stock market as well. But he was awarded a Nobel prize for his work. There must be something about his research that impressed people. What impressed people is that what he said (timing is required) is the OPPOSITE of what most of today’s “experts” say. To acknowledge the obvious reality would save us all from future bull markets and bear markets and economic collapses. So it’s not a small deal, it’s a huge deal.

The challenge is not an intellectual one, it is an emotional one. Say that I went over to Reddit today and posted there. There would be a few people there who would be intrigued by what I said. I know that from experience. I also know that there would be some who would be very upset. There would be some guy who over the course of a lifetime has accumulated savings of $1 million and who ids proud of the work that it took to pull that off. And I come along and tell him that his portfolio has a lasting value of only half that, that the rest is just irrational exuberance. I would be taking $500,000 out of that guy’s pocket. He’s not going to like me for saying that and I am not going to like not being liked. That’s the dynamics we have seen at play here since the first day. Do we as a nation of people want to know the truth about stock investing or do we prefer to continue to cover up the truth and suffer the consequences associated with that.

When a person writes a book, he has a reader in his mind’s eye. He thinks about the effect on that reader as he puts his sentences together. I know from a lot of experience that a lot of my readers are not going to enjoy the experience of reading my words. I assume today that they are not going to read my words until after the onset of the next Buy-and-Hold Crisis. So I think that people may be more open to the message of the book when they read it than they would be today. But I don’t believe that everybody is going to be entirely happy to read my words. That affects the writing process.

The usual goal of a writer is to make things as clear as possible. In this case, making things more clear makes things more painful. You don’t want to call your readers stupid. That’s a very bad persuasion strategy. But it’s a pretty darn stupid phenomenon we’re talking about here. Today’s CAPE value is 36. We know from history how much human misery follows from that. And every reader of the book has contributed to that in some way. If a person jumped up and down when the CAPE went from 35 to 36, he played a role in causing all that misery. It was not done by one person. Yes the Wall Street Con Men lie to us all about how stock investing works on a daily basis. But they do it because we love them so much for doing it. So all of the people that they are lying to are liars too, no? Calling your readers stupid liars is not the conventional path to journalism success. But to tell this story clearly and fully and accurately its something that must be said.

How about the fraud? I love John Bogle. It was byb reading Bogle’s book that I learned that Greaney’s study is in error. But Bogle saw what was going on at the Bogleheads Forms and he kept it zipped re Lindauaer’s behavior. Had Bogle reassured Wade Pfau that he would protect him from Lindauer and his goon squad, Wade never would have flipped. So Bogle’s role in all this is a topic that must be addressed. But it is not easy to write the sections dealing with that sort of thing.

Intellectually, it’s a piece of cake. Paying attention to price is just as important when buying stocks as it is when buying anything else. One sentence does the job. It’s not hard to understand why it’s so. But if everyone took that comment-sense insight into consideration, we wouldn’t have a CAPE value of 36 today. If we want to bring an end to the pain that Buy-and-Hold causes, we are going to need to talk about these matters. So it is both a very easy book to write and a very hard book to write.

Valuations matter. So easy. Self-evident. Millions of people ignore this obvious truth and destroy their own lives and the lives of others by doing so. Writing that up is a very hard thing to do. That’s why no one had done it in the 43 years since Shiller published his amazing research, including Shiller himself. So I am not going to get too down on myself for taking some time getting there. I want to get there as soon as possible. But the bottom line is that it doesn’t matter how long it takes so long as I do a good job. I just need to hang in there and get a little closer day by day.

My sincere take.

Think about how slow Greaney has been about correcting his study! That’s the truly amazing one!

Rob