Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
VII gets the numbers wildly wrong. How do we know this? Let’s use you and me as an example. We are both in our 60’s. If one of us was a market timer over the last 30 years, that person would have substantially less money in their retirement account vs the other that was a buy and holder. There is no argument on this. It is simple math. The market timer would not be able to retire right now. That is a very big problem for someone in their 60’s because most people have little time to continue working and many are forced out of working by health issues, ability to work a job or job availability.
You’re not adjusting for irrational exuberance. If you adjust for irrational exuberance, you get very different numbers. That’s the entire dispute. The last 43 years of peer-reviewed research shows that you need to adjust for irrational exuberance and the Buy-and-Holders ignore it because they don’t want to acknowledge that they made a mistake in failing to distinguish the guessing-game approach to market timing (which really doesn’t work) and valuation-based market timing (which is just price discipline and which the entire 150 years of historical return data available to us shows is always 100 percent required for every investor. There’s no other way to combat irrational exuberance.
We should be Permitting honest posting re the peer-reviewed research so that each investor can hear both sides and decide for himself or herself. That’s my sincere take re this terribly important matter.
If we permitted honest posting re the peer-reviewed research, everyone would just retire when he had enough saved to support a retirement. There wouldn’t be any of this phony baloney irrational exuberance floating around in our portfolios. So it would not be difficult to know when we had enough wealth accumulated to finance a retirement. Irrational exuberance hurts us all. It is the cancer of the personal finance world. We should all be working together to eliminate it. That means encouraging each other to practice price discipline (valuation-based market timing!) as needed.
Where I’m coming from.
Rob
You have repeated the same thing thousands of times for over 2 decades. No one believes your lies and anyone new reading your words will find out the truth with a quick Google search. The internet never forgets, so you can’t change history.
Okay, Anonymous.
I naturally wish you the best of luck in all your future life endeavors, in any event.
Rob
Here is why no one will listen to you. The people on Bogleheads and other similar forums have been following buy and hold. It has always worked for them and now most of them have over a million dollars. Many of them (like myself) have many millions in our accounts. Many of these people are between 60-80 years old and have several decades worth of a track record. With that success, why change? But, let’s say they are always willing to look at something else. So when we look at market timing, we haven’t seen any successful timing strategy. In your case, you went broke? So why would these people change, to anything else? Why would they change to market timing when their buy and hold strategy has always worked for them, yet they see the market timing failures? It just doesn’t make sense to them as well as anyone else that runs the numbers.
If you are personally persuaded that Buy-and-Hold is best (I believe that you are), then you should follow it. That part is fine. What is not fine is that you have employed abusive and criminal practices to suppress discussions that thousands of other community members (10 percent of the population of our boards and blogs) wanted to have. That’s completely over the line. It’s so far over the line that it’s impossible to describe how far over the line it is.
You are responsible for the losses that will be suffered by millions of people in the event that stocks continue to perform in the future anything at all as they have always performed in the past. You never should have put yourself in those circumstances. It was wrong to do that harm to others and it was wrong to do that harm to yourself.
You live in a community of people. That community has adopted laws to govern the behavior of the people in the community. Buy-and-Holders need to follow those laws just as much as all others. So, If there are people who want to discuss the far-reaching how-to implications of Shiller’s Nobel-prize-winning research, that’s just the way it is. You are not required to participate in the discussions. That’s your option. It is not your option to engage in abusive and criminal behavior to suppress the discussions. That is 100 percent over the line, It is not acceptable behavior.
My sincere take.
Rob
No one believes your made up Hocomania posts, no matter how many times you repeat it.
Okay.
Rob
People like you tend to get a bit more nutty when they are cut off from society. Perhaps you should get out of the house and socialize.
Socializing is essential. This entire story is a story of human psychology. If you went strictly by logic, then every single person would want to know the correct value of his stock portfolio. So irrational exuberance is something that can grow only if unnoticed and not commented on. We’ve always had irrational exuberance and we’ve always suffered the consequences of the Buy-and-Hold Crises that follow from permitting it to get out of control. We’ve only had peer-reviewed research showing how dangerous it is since 1981.
When someone like me points out the dangers, it’s a threat to the majority of investors, who enjoy the feeling of seeing exaggerated numbers on their stock portfolio. So the person is treated like a social pariah to keep the loony tunes prices intact. It’s painful to be threated like a social pariah. So most people learn to keep it zipped re this stuff.
This is why it has taken me so long to write the book. There’s something inside us all that makes us not want to go against the crowd. I certainly have those feelings. But it is my job as a journalist to tell the story as clearly and completely as possible. Each time I describe some aspect of the thing clearly and completely, I feel anxious because I know on some level of consciousness that I am angering people. It’s not fun. It’s something that needs to be done.
The intellectual work associated with this project is minimal. The price you pay for stocks matters — huge insight, right? But the emotional work is very difficult. We humans just don’t like to go against the crowd on something so important to so many. So, yes, I think it’s important not to feel isolated. I’m aware of the issue and I do what I can. It’s a painful thing. There are people out there who love the idea of learning the truth about stock investing. But they are isolated too and it’s hard to connect with them. I don’t say that I do the best possible job at it. I say that I continue to work it a bit every day.
I’d be grateful if you would wish me luck with it.
Rob