Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“ I agree that in recent years stocks have not performed at all as I was expecting them to perform. That’s an objective fact.
In short, you were wrong. Just say the words, Rob.
The Yankees were ahead by five runs at one time in yesterday’s World Series game. If someone said “I believe that there’s an 80 percent chance that the Yankees will win this game,” would you say that they were proven wrong? I would not. The historical record supported the statement. But 80 percent is not 100 percent. We saw an outlier outcome. It happens. In baseball and in stock investing as well.
You’re saying that, because we have seen this outlier outcome in recent years, we should throw away all of the peer-reviewed research and go with the strategy that the peer-reviewed research shows never works in the long-term (failing to practice valuation-based market timing). I don’t buy it. The value of the peer-reviewed research is that it steers us away from our worst emotional impulses.
Permitting the CAPE value to get to where it is today shows a dangerous emotionalism on the part of stock investors. I don’t believe that that dangerous emotionalism just fell out of sky. It is the result of the relentless promotion of Buy-and-Hold strategies by our Wall Street Con Men friends. We are perfectly capable of investing in rational, effective ways. But there’s a lot of money to be made pushing the Buy-and-Hold stuff. So we at times engage in this unfortunate behavior. I think we can do better. The key is opening every site to honest posting re the peer-reviewed research.
Where I’m coming from.
Rob
A study was conducted in 2015 in which 3 timing strategies were compared . Timing with CAPE performed the worst. Are you interested in a discussion? If so, I will post a link. If not, you have no interest in honest posting.
You should first see that every discussion board and blog on the internet is opened to honest posting re the last 43 years of peer-reviewed research, then post the link at the Bogleheads Forum and see what people think of it.
Rob
It has already been discussed there. The study was in 2015. If you really knew the research over the last 43 years, wouldn’t you know that?
Was every site opened to honest posting prior to the discussion? That’s key. You get a very different discussion if everyone feels comfortable expressing his sincere views from what you get if one side if engaging in acts of intimidation. The use of intimidation tactics subtracts from learning experiences.
Rob
I guess you don’t want to discuss ALL the research, right? Just your opinion of what one guy said.
Each community member should discuss the research papers that he is familiar with. Then the other community members can decide for themselves, based on what they have heard.
If one side engages in intimidation tactics, that’s a very, very bad sign. I would certainly subtract points from that side’s presentation in the formation of my personal assessment of things.
Rob
I guess you will have to use a new label then. You can’t say you are interested in the last 43 years of research since you want to exclude everything expect for what you think one guy said.
If there ever had been any evidence that Shiller’s Nobel-prize-winning research was not legitimate, the Buy-and-Holders would have advanced it a long, long time ago.
If there ever had been any evidence, we never would have seen a single board banning. They would have confidence that their evidence could convince people. Board bannings are not a sign of confidence. They are a sign of desperation.
Rob