I’ve posted Entry #718 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The More Frequently Irrational Exuberance Is Discussed, the Less of It We Will See.
Juicy Excerpt: The alternative to talking about the dangers of high stock prices and taking action to get them back to reasonable levels again is Buy-and-Hold. Buy-and-Holders say that there’s no need to engage in market timing. They don’t directly say that high prices are good. They say that there’s no need to do anything about them when they get out of control. If investors really were rational, that would follow. However, the reality is that investors are often highly irrational, and the only way to keep the irrationality from getting out of control is to encourage market timing. To fail to do so, given what has happened on earlier occasions when prices were permitted to get out of control, is reckless and irresponsible. Buy-and-Hold is a reckless and irresponsible investment strategy.
Geesh, Rob. It is Thanksgiving. Can’t you even stop with the Hocomania on a holiday?
The last 43 years of peer-reviewed research in this field is the most important 43 years of peer-reviewed research in the history of personal finance. It permits us all to retire many years earlier than what was possible in pre-Shiller days. We should be celebrating it. It’s something that we all should be thankful for. So today is the perfect day to discuss it.
It’s Buy-and-Hold that we should be giving a rest to, in my assessment. Once we have opened every site to honest posting, we are on our way to moving on from it. We should be thankful that we have learned what we need to know to do that.
Rob
Who is “we”, Rob? No one is interested in living in the land of Hocomania.
Everyone wants to invest more effectively, Anonymous. 100 percent of the population. Yes, it will take time to get everyone of board. The first step is opening every site to honest posting re the peer-reviewed research. After that is done, it’s just a question of letting the good stuff happen. Every investor should be able to hear both sides and make up his or her own mind,
It’s not possible for the rational human mind to imagine any possible downside to permitting honest posting. If Buy-and-Hold is real, it will be able to survive questioning,.
Rob
No one is interested is following you or your horrible advice. That is why they don’t post here and why people don’t talk to you. There is nothing honest about anything you post. Stop trying to drag people down with you.
If you Goons thought that no one was interested, we never would have seen a single abusive post, much less any of the criminal stuff. There thousands of people interested. Nothing close to a majority, about 10 percent of the population of the various communities. That’s a good start. Once we answer all the questions advanced by the 10 percent, we will be able to get another 10 percent interested, then another 20 percent, then another 40 percent.
The journey of a million miles starts with a single step. We should have taken that single step 43 years ago. The best that we can do today is to take it today. So we should do that.
You don’t get to decide what’s up or down. You can decide for yourself, that’s all. Every other investors gets to decide for himself after being able to hear both sides. At least that’s how things SHOULD go according to our laws and our social norms.
Rob
“ If you Goons thought that no one was interested, we never would have seen a single abusive post, much less any of the criminal stuff. ”
We have never seen these kind of posts, except from you. This is yet another reason why people have ignored you. If such posts occurred, you would post links all the time to support your claims.
If looking at today’s CAPE level doesn’t convince you, then nothing could ever convince you. A well-functioning stock market could never generate that CAPE level.
Rob
What convinces people is actual proof by providing links to the abusive posts and claimed death threats. Funny how you never post those links. Should be easy to do if they actually occurred.
It would be easy for you to look at the Greaney retirement study and check whether it contains a valuation adjustment. Do you think that he gets away with not correcting it without engaging in any funny business? Does that sound even a tiny bit realistic to you?
It’s not all funny business. There’s the fact that we all come with a Get Rich Quick impulse installed at birth. So we want to believe that valuation-based market timing is not 100 percent required for every investor. That’s a huge part of it.
But you couldn’t get away with it without the funny business. Not with 43 years of peer-reviewed research showing how it works. Maybe prior to then you could. But we humans have been learning about this stuff over the years. We are close to making some huge leaps forward. In recent years the funny business has played a huge role in keeping millions of us from learning what we need to learn to become far more effective investors.
I believe that we will as a nation of people figure out a way past you one day. I believe that there will come a time when we won;t have any choice. But we’ll see, you know?
Rob