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 guess I need to read more. Honest posting? I am not sure what you mean by that, but people are able to post what they want, right? Also, we do seem to already know about failed retirements and it seems to me that it is common knowledge that our collective savings rate is pathetic. It just comes down to spending less than you make, consistent investing and avoiding debt. The concept is not hard, but most people lack the discipline to do that.
Most people need the discipline to practice valuation-based market timing, Mike. That IS hard. It goes against human nature. The history of the stock market shows what happens when people fail to practice price discipline when buying stocks. It’s a tragic story.\
Rob
If only we could have the discipline that you have. Then we would be broke and divorced.
The entire point of the research is that it shows what works in the LONG TERM. Get Rich Quick strategies can do great in the short term. But that’s it.
Rob
It didn’t work for you in the long term. In fact, you can’t even name one person in which market timing has worked out.
Price discipline works for every investor who employs it, Anonymous. Ir’s impossible for the rational human mind to imagine any exceptions to that rule.
You don’t subtract for the effect of irrational exuberance when determining the size of your portfolio. That’s what confuses you. Irrational exuberance gains are imaginary gains. They are not real. They disappear into the mist in time.
Rob
“Ir’s impossible for the rational human mind to imagine any exceptions to that rule.”
It’s impossible to expect any rational human mind to follow a timing scheme that has never worked and to follow a guy that went broke.
Okay, Anonymous.
Rob