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The Old Ideas on Saving & Investing Don't Work -- Here's What Does

Valuation-Informed Indexing #199: Investing Strategies That Ignore the Effects of Stock Crashes Cannot Work

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I’ve posted Entry #199 to my weekly Valuation-Informed Indexing column at the Value Walk site. it’s called Investing Strategies That Ignore the Effects of Stock Crashes Cannot Work.

Juicy Excerpt: You really only need to know one thing about stock market history to know that the market is not efficient. Prices crash from time to time. If prices were determined by economic realities, there would be ups and downs in prices. But there would never be crashes. The market lost over $9 trillion in value in the 2008 crash. There is zero chance that informed investors had in late 2008 taken note of changes in the economic realities serious enough to justify that sort of change. The market crashed because market prices are determined primarily by shifts in investor emotions and one of the characteristics of emotions is that they change suddenly and harshly.

Emotions are not rooted in logic. So they can do just about any crazy thing. It is critical that those studying stock investing come to a better appreciation of this seemingly obvious implication of Shiller’s “revolutionary” (his word) finding. When I tell people that the numbers show that it was the relentless promotion of Buy-and-Hold strategies that served as the primary cause of the economic crisis, they find it a hard reality to take in.

It doesn’t make sense! Surely investors would not let prices get so out of hand as to cause $12 trillion of consumer buying power to disappear from the economy as prices worked their way back to fair-value levels. No, it doesn’t make sense. But bull markets aren’t supposed to make sense. They are an emotional phenomenon, not a rational one. What would make sense is for the P/E10 always to remain at 15, the fair-value P/E10 number. Higher P/E10 values signify the presence of unhealthy levels of investor emotion and we need to pay attention to those readings if we are to invest effectively for the long-term and to avoid the sorts of economic crises that have followed every secular bull market experienced over the 140 years of stock market history available to us today.

So long as stock market prices are determined by emotional phenomena, we are going to see terrifying price crashes and the terrifying economic crises that inevitably follow from them. The other and more positive way of stating it is that, now that we are aware that market prices are determined by emotional phenomena, we are empowered to avoid crashes and economic crises by educating investors as to how they need to respond to bull-market prices to win higher lifetime returns and earlier retirements for themselves.

“I Want to Convert the Entire World to Valuation-Informed Indexing. I Want to Get All the Textbooks Rewritten. I Want to See a Nobel Prize Awarded to Wade Pfau and I Want to See Hundreds of Academic Researchers Follow in His Footsteps. I Want to Restore People’s Confidence in Our Economic and Political Systems. I Want to Make Jack Bogle and Robert Shiller More Famous and More Loved and More Wealthy Than They Have Ever Been Before and Make Myself a Good Bit Famous and Loved and Wealth in the Process.”

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Set forth below is the text of a comment that I recently put to another blog entry at this site:

Rob,

You know that most don’t agree with your comments, but let’s put that aside. Bottom line, what is it you want? Is it simply for people to suck it up and bear with your posts and allow you back on the boards?

The fact that the majority of today’s investors do not follow Valuation-Informed Indexing strategies does not have to be viewed as a bad thing. From one way of looking at it, it can even be viewed as a very, very good thing.

Valuation-Informed Indexing is the first true research-based strategy. It is backed by 33 years of peer-reviewed research. It reduces risk by 70 percent. It increases returns by enough to permit those investors who follow it to retire five to ten years sooner. It puts an end to the economic crises that are caused by the boom/bust cycle that inevitably follows from promotion of Buy-and-Hold strategies. So the transition from Buy-and-Hold to Valuation-Informed Indexing is the biggest advance that we have seen in the history of personal finance. It will make us all much richer (in every sense of the word) people.

If there were only a few people who did not know about Valuation-Informed Indexing today, we would want to spread the word for the benefit of those few. But, given that most of today’s investors do NOT understand the implications of the peer-reviewed research of the past 33 years presents us with a huge opportunity. We will not be helping out 10 percent or 20 percent of the population when we open the internet to honest posting on SWRs and scores of other critically important investment-related topics. We will be helping out 80 percent or 90 percent of the population. The opportunity presented here is off-the-charts exciting.

There are some who will indeed have to “suck it up and bear with my posts,” as you put it. That’s certainly true of you Goons. It is also true of some others who feel pain when they see evidence presented that they have made mistakes in choosing their investing strategies. It’s a small percentage of the board population that feels that way, but there are indeed people in this category. Yes, those people have to suck it up. They agreed to tolerate the expression of a variety of viewpoints when they were granted the ability to post at our boards and blogs. They are going to have to honor the promises they made when they were granted posting privileges or find some other internet to which to direct their posts. We have rules on this one and we need to insist that those rules be respected.

The majority of community members are in a middle ground. They don’t fully understand or believe in Valuation-Informed Indexing. So they are not willing to fight for the right to hear about it. But they have zero problem with the idea of permitting people who want to hear about it to do so. The majority of our community members are NOT Goons. They are not Valuation-Informed Indexers. But they have no problem with the idea of others learning about it and in many cases they have a small interest in learning about it themselves so long as the threads in which they do so are moderated in a reasonable manner and they don’t see the death threats and the demands for unjustified board bannings and the tens of the thousands of acts of defamation and the threats to get academic researchers fired from their jobs that you Goons have been using to poison those threads for 12 years now.

Getting back on the boards with my right to post honestly re the last 33 years of peer-reviewed research respected is the first step on the path forward, not the last, Anonymous. Yes, of course I want that. And of course I demand that. And of course I insist on that. But please don’t think that that is the end goal. That is what we need to see for progress on all the other follow-up goals to be achieved.

I am happy to list follow-up goals if that helps. My guess is that you could imagine what they are. Or you could listen to the RobCast (#193 — My Vision) that I recorded on this topic:

http://www.passionsaving.com/personal-finance-podcasts-page-twenty-five.html

What I want is what I call “Normalcy.” I don’t want to see any invective from any poster, regardless of which “side” he or she is on. I put the word in quotes because I do not believe that there are any “sides” in a final, true sense. We all want the same thing — to learn how to invest effectively. The Buy-and-Holders need what the Valuation-Informed Indexers bring to the table and the Valuation-Informed Indexers need what the Buy-and-Holders bring to the table. We should be enjoying our good fortune in having been born the luckiest generation of stock investors ever to walk Planet Earth rather than quarreling over whether honest posting on what the peer-reviewed research says should be permitted on our boards or not. We should be going up, up, up, up, up rather than down, down, down, down, down.

What I most want to see is a change in attitude among the Buy-and-Holders. For the first 12 years, the attitude has been: “We have got to make the Valuation-Informed Indexer as uncomfortable as possible, we want them to leave the premises before they win converts and their new ideas begin to catch on in a big way.”

Yuck.

I WANT the new ideas to win converts. I WANT the new ideas to catch on. This is why I say that, for the first 12 years, you Goons and I have been working at cross purposes. I think that is unfortunate. I think it is unnecessary. And I don’t believe that we will have successful interactions until that basic attitude conflict changes.

Are you open to learning new things about how stock investing works?

If you are, I cannot imagine that we will not be able to work together to make everyone happy about the new arrangements.

If you are not, I cannot imagine that will will be able to work together to make everyone happy about the new arrangements.

We have to have that attitude change. We do NOT want anyone to say they believe in things they don’t really believe in. If you believe that the odds of a Valuation-Informed Indexing strategy producing good results are zero, you not only have a right to say so but a duty to say so. But even if you think the odds are zero, you should be happy that there are people in our community willing to argue the case for VII as effectively as they can. Those people add something important to the community discussions and those people must be respected and admired for their contributions. In the event that Buy-and-Hold really is the cat’s pajamas, those people help community members to see that by putting so much effort into making the case for the other side (and failing — which is what they will do in the event that Buy-and-Hold really is the cat’s pajamas and is not just imagined to be so by many of today’s investors).

My ultimate goals are very, very, very ambitious, Anonymous. I want to convert the entire world to Valuation-Informed Indexing. I want to get all the textbooks rewritten. I want to see a Nobel prize awarded to Wade Pfau and I want to see hundreds of academic researchers follow in his footsteps. I want to restore people’s confidence in our economic and political systems. I want to make Jack Bogle and Robert Shiller more famous and more loved and more wealthy than they have ever been before and make myself a good bit famous and loved and wealthy in the process.

But none of that is terribly important at this stage of the proceedings, in my assessment. What matters today is that I want to add to the value of every investing discussion board and blog on the internet in a big way by working WITH my Buy-and-Hold friends to enhance the world’s knowledge of how investing works.

Do you see?

I cannot contribute by arguing for Buy-and-Hold because I do not believe in Buy-and-Hold. If your idea of the purpose of the boards is to spread support for Buy-and-Hold, I don’t belong.

I don’t see that as the purpose. I see the purpose as spreading KNOWLEDGE whether the knowledge that is spread happens to count in favor of Buy-and-Hold or against it. Telling people about the implications of the last 33 years of peer-reviewed research obviously spreads knowledge in an important way. So that’s the direction to which I want to direct my energies.

I want to see us all Learning Together. That’s the short version of the story.

I believe that our wonderful Learning Together project will ultimately take us all to some amazing places. But talking about those places is better put off for later. Once we all see how wonderful the change is when we make the change we need to make, we will ALL be looking forward to our journeys to those amazing places. Today, we need to work up the courage to take the first magic step. The first magic step is adopting an ATTITUDE that is conducive to learning experiences.

That first step has proven difficult for us. The follow-up steps will prove a lot less so. I am sure.

I hope that helps a bit, old friend.

Rob

“If You Looked at the Portfolios of the People Who Awarded Shiller the Nobel Prize, You Would Find that Most of Them Are More Believers in Buy-and-Hold Than They Are in Valuation-Informed Indexing. But They Are Experiencing Doubts.”

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Set forth below is the text of a comment that I posted to another blog entry at this site:

All it proves is that you can find patterns in the data. Let’s see….each time the P/E10 ended in a “1? in February, it dropped 10% by the following May. There’s no causation – that’s all in your head.

If we were talking about a small number of years, it would make some sense to say that it is just coincidence. But the P/E10 level has been effectively predicting long-term returns for 140 years. The odds of the same coincidence playing out 140 years in a row are probably something like 10 billion to one. This is something real.

We don’t know all the details. I don’t say that we know everything there is to know. But Valuation-Informed Indexing is rooted in something real and important.

That’s why Shiller was awarded the Nobel Prize in Economics. As a society we are gradually working up the courage to acknowledge what a big deal this is. At an earlier time, the people who awarded Shiller the Nobel prize wouldn’t have done so. My guess is that, if you looked at the portfolios of the people who awarded him the prize, you would find that most of them are more believers in Buy-and-Hold than they are in Valuation-Informed Indexing. But they are experiencing doubts. That’s what led them to make that statement.

They didn’t feel safe making a bold statement.They gave the prize to Fama too so that they could not be viewed as “taking sides.” They didn’t take sides but they changed the playing field. In the old days, Fama was it, there was no Shiller. Those days are gone. Buy-and-Hold is still dominant, Valuation-Informed Indexing is still the thing that can only be discussed tentatively, not in bold and firm and clear terms. But that is in the process of changing when the guy who did the research that led to the revolution in understanding is being awarded a Nobel prize for his work.

This isn’t some kind of thing where people are saying “Buy stocks in January and sell in May.” The data is available at Shiller’s web site. Buy-and-Holders can study it as long as they want. And yet in 12 years of discussions no one has ever found a single hole in the new model. That tells us something, Anonymous.

I have no fear that Jack Bogle will ask me a question that I cannot answer. But Jack sure has fears that I will ask HIM a question that HE cannot answer.

Why? Because Buy-and-Hold is the thing that is in the process of dying and Valuation-Informed Indexing is in the process of being born.

In future days, we won’t look at it that way. In future days, we will be able to look back at what the Buy-and-Holders did and give them full credit for all of their wonderful contributions. That becomes possible when the Buy-and-Holders stop being so defensive and when we all can acknowledge that Buy-and-Hold was a FIRST DRAFT effort at a research-based investing strategy and that Shiller’s “revolutionary” (his word) findings moved the Buy-and-Hold project forward in a very, very, very important way.

You either believe in following the research or you don’t, Anonymous. If you don’t believe in following the research, then you are just guessing when you invest your retirement money. If you don’t believe in following the research, then you really are back with the people who say “Buy in January and sell in May” and all the other garbage that follows from a guessing approach.

If you truly believe in following the research, you cannot ignore what Shiller discovered. His discovery that valuations affect long-term returns changes everything in a fundamental way.

Buy-and-Hold could once be promoted as a research-based strategy. It cannot honestly be promoted as that today. Once peer-reviewed research was published showing that valuations affect long-term returns and the Buy-and-Holders neglected to change their strategy to incorporate this revolutionary finding, Buy-and-Hold stopped being research-based and became just another case of investing superstition.

The Buy-and-Holders have two choices today. They can accept that they made a mistake and change the Buy-and-Hold Model so that it reflects the last 33 years of peer-reviewed research as well as the research that came before that. Then they go down in history as the people who developed the foundation for the first research-based strategy and then later made the changes needed for that model to work in the real world.

Or they can continue with the death threats and the demands for unjustified board bannings and the tens of thousands of acts of defamation and the threats to get academic researchers fired from their jobs. Then they go down in history as fools and con men and felons.

There is no middle ground. You cannot say “this is a research-based strategy” and ignore the last 33 years of peer-reviewed research.

They didn’t award Shiller the Nobel Prize because he is some clown who forgot to take his meds. When you say that Valuation-Informed Indexing cannot be discussed on the internet, you are saying that the last 33 years of peer-reviewed research cannot be discussed on the internet. That makes you the clown.

An unethical clown.

A clown headed on his way to a prison cell.

Not good.

That’s my sincere take re this terribly important matter, in any event.

My best and warmest wishes to you, my long-time clown friend.

Rob

“The Owners of the Bogleheads Forum Are As Corrupt As the Day Is Long. But, After They Have Spent Some Time in Prison, Their Hearts Will Melt. When Their Prison Sentences Are Over, I Will Welcome Them Back to the Site. We Will Get Along Fine and They Will Make Important Contributions. People Will Wonder What All the Commotion Was About.”

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Set forth below is the text of a comment that I recently posted to another blog entry at this site:

Do you expect the bogleheads to merely forget your past behavior and trust that you have changed?

Any Boglehead who thinks that I have changed is a damned fool, Uralapin.

The owners of the Bogleheads Forum are as corrupt as the day is long. But I wouldn’t call any of then fools. You don’t have to read too many of my posts here to know where things stand. They know where things stand.

Following the next price crash, there will be court proceedings. Things will be set straight. That’s how our system works.

After the owners of the Bogleheads Forum have spent some time in prison, their hearts will melt. That’s how human beings work.

I intend to take over operation of the Bogleheads Forum after the prison sentences are announced. There are lots of great people who post there and they deserve to have a place where they can feel clean about the discussions in which they participate.

Our economy will recover. I believe that we will see the greatest period of growth in U.S. history.

When their prison sentences are over, I will welcome the owners of the Bogleheads Forum to the site. We will get along just fine and they will make important contributions. They will feel better about themselves.

We all will make it to the other side of The Big Black Mountain together.

And people will look back in future days and wonder what all the commotion was about.

My best wishes to you.

Rob

Kathy Sierra on What Drives the Goons: “The Real Problem Was That Others Were Beginning to Pay Attention to Me. His Rage Was Because, In His Mind, My Work Didn’t Deserve the Attention. From Their Angry, Frustrated Point of View, You Must Be Stopped.”

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The Wired.com site recently posted an article titled Why the Trolls Will Always Win.

I do not agree with the conclusion stated in the title of the article. I believe that the trolls responsible for the 12-year cover-up of the errors in the Old School safe-withdrawal-rate studies will LOSE big time when their prison sentences are announced following the next price crash. I believe that, when that happens, legislation will be passed making clear that site owners are responsible for crimes and torts committed at their web sites, especially when those crimes and torts are committed through violations of the published rules of the site and when the owners of the sites are aware that the published rules have been violated and yet have failed to take effective action. I see the internet discussion board as a powerful communications medium of the future that will not realize its potential until the internet is opened to the millions of good and smart people who would be happy to make positive contributions if the lowest of the low among us were reined in.

That said, Kathy Sierra is as much an expert on the insanity of internet Goons as I am. She has earned a right to her opinion on these matters, she states her opinion intelligently and fairly, and I believe that all of us concerned about the future of the internet should be paying attention to her words and to the words of the thousands (!) who posted comments in response to her article.

Re the words quoted in my headline, what is going on here is that the internet has the capacity to enhance all of our lives in very important ways. That’s obviously a good thing. But advances are always going to be perceived as threats to those who see themselves being left behind. It is the power of the internet to do so much good that causes the Goons to feel such intense hatred toward those who employ it for constructive and positive and life-affirming purposes. Those who think that the internet can achieve its potential without us all working together to see that the laws of the United States and the rules of the boards and blogs at which we post are applied on it are ignoring a dark side of human nature that has been present since the first day and that in the past has always been reined in by good and responsible people.

That’s my sincere take re this terribly important matter, in any event.

On Investing: Risk Could Be Almost Entirely Optional

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I recently posted a Guest Blog Entry at the MoneyCrush blog. It is called On Investing: Risk Could Be Almost Entirely Optional.

Juicy Excerpt: Many top-name people acknowledge the problem. The trouble is figuring out what to do about it. If people come out today and acknowledge that the retirement studies used by millions got the numbers wildly wrong, the millions of people who relied on those numbers are obviously going to be very upset. The other side of the story is that people will be even MORE upset if they learn only when their retirements fail that the numbers were wrong all along and that many people knew this and didn’t tell them.

If we were open with investors and explained to them that stocks offer a poor long-term value proposition when they are overpriced, they would act in their self-interest and keep stock prices at least sane. We hurt ourselves in a very big way by borrowing so much from our future selves. We didn’t know how things worked in the past, so there was nothing we could do about it (when, for example, the bull market of the 1920s caused the Great Depression).

But now we have available to us the research we need to end a great deal of human misery. My view is that we all should be working together to get the word out and to help people learn what they need to learn to earn far higher returns while greatly reducing stock investing risk. My advice to investors is to consider the possibility that most of the investment advice that you hear is rooted in research that may not be nearly as sound as you have been led to believe.

The Last Days of Stock Investing Risk

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I recently posted a Guest Blog Entry at the Budgeting in the Fun Stuff blog. It’s called The Last Days of Stock Investing Risk.

Juicy Excerpt: You can never eliminate risk entirely because short-term returns are not at all predictable. But there is now 33 years of peer-reviewed research showing that long-term returns are highly predictable for those who consider valuations. Risk is optional! Go with a high stock allocation when prices are low, a moderate stock allocation when prices are at fair-value levels, and a low stock allocation when prices are high and you cannot lose. That’s not just my opinion. That’s what the entire 140 years of U.S. stock market history available to us today tells us.

This new approach is called “Valuation-Informed Indexing.” It is rooted in the research of Yale Economics Professor Robert Shiller, who won a Nobel Prize last year for his work in this area. It is solid stuff. And it is a very simple strategy to implement. You need to check valuations once per year. And you need to change your stock allocation because of a big swing in valuations perhaps once every ten years. That’s it.

Making that one change in the conventional advice to stick with the same allocation at all times reduces risk by nearly 70 percent. That’s exciting. I think this is the future of stock investing.

Economics Professor Marcelle Chauvet: “I Think You Are Mentioning My Name Outside the Context and You Inserted an Answer Below With Your Own Thoughts, As If I Endorse Them.”

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Marcelle Chauvet is an Economics Professor at the University of California at Riverside. I wrote her some time back letting her know about the threats that were made by the Buy-and-Hold Mafia to silence Academic Researcher Wade Pfau when he sought to get the errors in the Old School safe-withdrawal-rate studies corrected. She wrote back a kind and intelligent note, saying: “I like it and I totally agree. The market goes through cycles and if we want to or need to sell in the wrong cycle phase all bets are off. The only thing is the cost of obtaining information as opposed to Buy-and-Hold. This would be a good research topic. Why would your job be jeopardized by such a sensible claim?”

I posted the words of my response to Marcelle here. I argued that: “Did we know it was funny money? We did. We all possess common sense. No one really believes on a deep level that their retirement accounts can increase by 20 percent or 30 percent in a year for no good reason. We all knew all along that there was some sort of funny business going on and that we should look into it. BUT WE DIDN”T WANT TO KNOW. So we silenced the voice within us telling us “this is wrong.”

Marcelle recently posted a comment to the discussion thread at that blog entry. She wrote:

Dear Robert,

We have exchanged one or two emails in which you mentioned that buy and hold can be a bad strategy and I agreed with you given the high volatility in the market. However, I think you are mentioning my name outside the context, and you inserted an answer below with your own thoughts, as if I endorse them.

I would like to ask you to take my name out of this article, please. I do not want to be listed as endorsing your positions blanche card. This does not represent our exchanges and they are misleading. Thanks.

I responded with the words set forth below:

Marcelle:

Thanks for writing about your concern. It is nice to hear from you again!

I certainly did not in any way, shape or form intend to suggest to anyone that you endorse all of my views on stock investing. I don’t believe that. I have added a note to the article (in bold type) stating this and directing people to your comment. I hope that helps. If you would like me to add any additional language detailing how your views differ from mine, I am happy to add such language (in bold type) to the note at the bottom of the article.

I’d be grateful if you would tell me how this came to be a concern. I have learned over the past 12 years that there is a lot of funny business going on in the investing advice area. I believe that we all need to work together to clean up the corruption in this field. I don’t know whether people involved in the corruption have contacted you or not. If they have, I would like to know more about what happened and share it with my readers.

My best and warmest wishes to you and yours.

Rob

I also added a note in bold type to the bottom of the blog entry. The note read:

I received a comment (see below) on August 2, 2014, in which Marcelle expressed a concern that readers might pick up the impression that she endorsed all of my views on investing. She has never said any such thing and I do not believe any such thing.

 

 

 

 

Motley Fool and Wade Pfau Experience Pangs of Conscience re Their Safe Withdrawal Rate Lies

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My good friend Wade Pfau’s conscience must be bothering him. He has recently worked up the courage to begin posting honestly again on at least some critically important investment-related topics.

It gets better.

Motley Fool, the site at which I posted my famous post of May 13, 2002, pointing out the errors in the Old School safe-withdrawal-rate studies (SWRs) and which for years now has prohibited honest posting on SWRs (after John Greaney, the author of one of the discredited retirements studies, threatened to kill family members of anyone who dared to “cross” him by posting honestly re this matter), is now permitting at least a limited amount of honest posting on the subject.

A recent article at the site titled Retiring Now? How the 4 Percent Rule Could Hurt You, states: “Recent research using current market data shows that the rule could be far from safe.” Hmmmm….

The article adds that: “In the current market environment and a 40/60 equities and bonds split, a 4% withdrawal rate has over 50% chance of failing over 30 years.” Sounds familiar somehow!

It points to research done by Wade showing that: “To get the failure rate down to 10% in the “worst case” conditions, the authors had to reduce their hypothetical withdrawal rate to 2.5%, with a portfolio mix of 45% stocks and 55% bonds.” So it turns out that retirement plans calling for a 4 percent withdrawal are NOT “100 percent safe” (as Greaney’s study — uncorrected to this day — claims) afterall!

The article explains that: “It’s just that those age-old rules about what is safe or not safe are not set in stone: the market changes, and so should your rules of thumb. Just because 4% was determined to be safe at one point doesn’t mean it will stay that way forever. ” The 4 percent rule really worked until you used it to plan your retirement. Only after you retired and stocks continued to perform as they always have in the past did the 4 percent rule become insanely dangerous. Too bad for you, you foolish middle-class investor you! You believed that the Wall Street Con Men were shooting straight! The joke’s on you!

I noticed a helpful note at the beginning of the comments section asking readers to: “Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. But please don’t feel any hesitation to threaten to kill family members of posters who post honestly re the numbers that their friends use to plan their retirements.”

Actually, that last sentence is mine, not Motley Fools’. The owners of the Motley Fool site are not any more willing to tell you how they really administer the board than they are to tell you the true safe withdrawal rate in time for it to help you plan your retirement effectively.

All that said, we should be thankful today that we are beginning to see tiny shoots of honestly burst up through the cold hard ground that has come to dominate the investing advice field in the Buy-and-Hold Era. Let’s hope that Motley Fool and Wade Pfau and lots and lots of others make it more of a habit to offer honest investing advice in days to come. I believe that we will be seeing a lot of this sort of thing following the next price crash. I am sure of it!

Valuation-Informed Indexing #198: The Appeal of the Valuation-Informed Indexing Story to an Enterprising Journalist

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I’ve posted Entry #198 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Appeal of the Valuation-Informed Indexing Story to an Enterprising Journalist.

Juicy Excerpt: This is a bigger story than Watergate. If Shiller is right and Fama is wrong, it was the heavy promotion of Buy-and-Hold that caused the economic crisis. Plus, there are millions of middle-class investors who are going to suffer failed retirements in days to come and the government is going to need somehow to find money to bail them out (it wasn’t their fault if they followed the conventional advice, which was known to be in error for three decades but was promoted heavily all the same). That’s news.