Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Did you know that only 4.7% of American’s have saved at least $1 million and only 1.8% have $2 million? The REAL crisis is that people do not have enough money in their savings/investment accounts (just like you). Let’s talk about what the REAL error is.
From May 1999 through May 2002, I posted only about saving strategies. I was a highly popular poster. Greaney wrote an introduction to the Retire Early board urging newcomers to read all of my ‘seminal” stuff first. I had never had an abusive post directed to me at that time.
So there’s a sense in which I would love to re-focus on saving strategies. But you can’t do that forever. Once people save enough money to become financially independent, they need to do something with the money. Should they go pure Get Rich Quick/Buy-and-Hold? Or should you tell them about the last 44 years of peer-reviewed research? If you tell them about the research, there is a segment (about 10 percent) of the Buy-and-Hold community that is going to be very unhappy with you. And the other 90 percent may speak up once or twice but they are not going to be willing to tale on the Goons in any sort of sustained way.
So you end up where we are today. I would prefer to write about saving. But sooner or later you need to address investing issues if you are going to have a board that helps people to achieve financial freedom early in life. I didn’t wake up one morning and say ‘Gee, I think I would like to write about investing.” I got forced into it against my will because I had made friends with a number of people who were planning early retirements and i was concerned that they were making use of a retirement study that gets all of the numbers wildly wrong (the Greaney study lacks a valuation adjustment).
Investing matters. Saving matters too, maybe more. But in the final analysis, investing matters as well.
Rob
“ From May 1999 through May 2002, I posted only about saving strategies. I was a highly popular poster.”
There is the problem. Your objective was to try and get some kind of online fame. You had a dream that you would become someone kind of expert/leader and you have long sought after praise. Instead, all you did was made yourself an internet joke. Eventually, people just grew tired of you and either banned you or ignored you.
The real goal of all this is to have a successfully funded retirement. Have you done that? Of course not. In fact, it got so bad, your wife had no choice but to leave you. No one did this to you. It is all because of the choices you made. You still have a choice now. You can face reality and try to fix what you can, or you can just keep repeating the same behavior and then experience the same painful results.
Uh oh……….the market is dropping and no one is blaming buy and hold…….only tariffs. That means you won’t be getting your $500 million windfall. There goes your plan “B”.
I believe to this day that the Greaney retirement study lacks a valuation adjustment. So I am going to continue to say that I believe that.
Rob
Uh oh……….the market is dropping and no one is blaming buy and hold…….only tariffs. That means you won’t be getting your $500 million windfall. There goes your plan “B”.
I’m blaming Buy-and-Hold. Announcement of the tariffs would have caused a price drop in any event. But when stocks are priced at two times their real value, the price drop is much larger.When all investors are practicing valuation-based market timing, both phony price increases and phony price drops will be eliminated, Permitting honest posting re the peer-reviewed research at every site will take away the thrill-ride aspect of the stock investing experience. I think that would be a very good thing.
Rob
At least you have some good news. Since you are broke, you don’t have anything to lose.
The good news is that prices are moving in the direction of fair-value levels. There’s obviously a great deal of pain associated with the move. But that pain was locked in when investors failed to respond to irrational exuberance with valuation-based market timing, which is the only weapon we have available to us to fight it.
I am not happy to see the pain. But I am happy to see us moving in a direction which may help us avoid experiencing this kind of pain in the future. The peer-reviewed research is our friend.
We should be explaining to investors that the phony gains were never something they could count on. The “idea” that valuation-based market timing is not always 100 percent required for every investors is just an insanely irresponsible marketing gimmick.
Rob
Rob
Fair value is what the market determines. Stocks go up and down, but continue to rise over time. We have learned that market timing doesn’t work and that people can and do go broke when following schemes like this.
Fair value is what the market determines when investors have access to discussions of the peer-reviewed research. The market obviously is not able to function properly when honest posting re the last 44 years of peer-reviewed research is prohibited at every site.
Today’s CAPE value is 33. Are we to believe that the relentless promotion of the Buy-and-Hold “strategy” had nothing to do with that?
Rob
Everyone has access to all the information. You just don’t like the opinions of others. Learn to deal with it and fix your own problems.
I wish you all the best, in any event, Anonymous.
Rob
Let’s say that Shiller changes his mind and tells people that we should time the market with CAPE and then he gets rich from people buying his books with this new message………..but then you are still ignored and you don’t earn a single dime from all this. Are you okay with that outcome?
I wouldn’t be happy about it. But I could live with it. I see it as a better outcome than having to live with myself in the days and years following the onset of the next Buy-and-Hold Crisis knowing that I could have helped my friends by speaking out about the error in the Greaney retirement study but that I failed to do so because I was afraid of what you Goons would do in response.
None of us get everything we want in this life. We have to make choices. We have to try to choose the best option presented to us.
Rob
You have spent decades trying to create an online story. The rest of us have been focused on putting together a financially secure retirement. Go ahead and pump your stories. I choose to provide for me and my family.
I naturally wish you the best of luck with it, Anonymous.
Rob