A Rich Life

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

Valuation-Informed Indexing #701: There Is Both Huge Support for and Huge Opposition to Valuation-Based Market Timing

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I’ve posted Entry #701 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called There Is Both Huge Support for and Huge Opposition to Valuation-Based Market Timing.

Juicy Excerpt: I won’t tell you what some of my critics have said about the concept because it would be just too darn upsetting and depressing. But please don’t think that there are not critics. There are lots and lots and lots of critics. I am a mild-mannered reporter. And I have been banned from more investing web sites than most people have visited. So this is not a thing where I can tell you that “50 Million Elvis Fans Can’t Be Wrong!”

“I Believe That, So Long As My Opinion Was Represented in Every Discussion, Over Time We Would See More People Coming Around to Support My Opinion. There’s Only One Way to Find Out for Sure.”

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

If my Tesla had a microwave oven, we would see the greatest economic boom in history.

It’s your opinion that valuation-based market timing is not required. It’s my opinion that it is.

If there were no abusive posting, both opinions would be represented in every discussion held on the internet. Your opinion is held by ten times the number of people who hold my opinion. So there would be more people giving voice to your opinion, in the short term. I believe that, so long as my opinion was represented in every discussion, over time we would see more people coming around to support my opinion. There’s only one way to find out for sure.

It is not your place to “win” the debate by imposing a ban on honest posting. You agreed to follow the published rules of the various sites and you should honor that promise. Each community member should be able to hear both opinions and to make up his or her mind as to how to invest his or her retirement money.

That’s where I’m coming from re this one, in any event.

I sincere believe that the Greaney retirement study lacks a valuation adjustment.

Rob

“Those Were Real People Who Posted at the Motley Fool Board and Who Thought That the Greaney Study Was Legitimate.”

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

Do you have a fully funded retirement or not.  That is the scorecard for telling us who is right and who is wrong.

Does the Greaney retirement study contain a valuation adjustment or not? That is the scorecard for telling us whether Get Rich Quick/Buy-and-Hold is on the up and up or not.

If the Buy-and-Hold Goon Squads were not supporting a cover-up, there never would have been a single abusive post and I would be flying high today, with hundreds of millions of dollars in my account. If we all were thinking clearly, there would be zero penalty for pointing out an error in a retirement study.

Those were real people who posted at the Motley Fool board and who thought that the Greaney study was legitimate. I was there.

Rob

“I’m Willing to Listen to Anyone Who Makes a Case That the Greaney Retirement Study Does Possess a Valuation Adjustment. No One Has Done That in the First 22 Years of Discussions.”

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

Bad behavior includes how you ignore yrge fact that people have pointed out YOUR error with Greaney’s work.  You just don’t listen.  That’s why your wife divorced you.

I believe that the Greaney retirement study lacks a valuation adjustment.

I’m willing to listen to anyone who makes a case that it does possess one. No one has done that in the first 22 years of discussions.

Threatening to murder someone’s loved ones is not an argument that the study contains a valuation adjustment. It’s an effort to silence people pointing out the error.

Rob

Valuation-Informed Indexing #700: Can Investors Be Both Rational and Emotional at the Same Time?

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I’ve posted Entry #700 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Can Investors Be Both Rational and Emotional at the Same Time?

Juicy Excerpt: To persuade one’s self that history doesn’t matter is even a scarier possibility than acknowledging that today’s high stock prices are bad news for stock investors. If history doesn’t matter, then there is no sound reason to believe that stocks will offer strong returns on a going-forward basis. The historical record offers a discomforting message for those invested heavily in stocks today but a highly comforting message for those with a general preference for investing heavily in stocks.

“That Explains Why I Am Banned at Every Large Investing Site — I Never Had Any Success Convincing People. Makes Sense!”

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

You have been completely unable to convince people.  That is why you have no followers posting here.  This is why you are divorced.  That is why you are broke.

That explains why I am banned at every large investing site — I never had any success convincing people.

Makes sense!

Rob

“The Vast Majority of Buy-and-Holders (Possibly Every Last One of Them) Believe That Buy-and-Hold Is Best.”

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

In your mind, all of you opinions are honest and everyone else’s opinions are abusive.

That’s not so. The vast majority of Buy-and-Holders (possibly every last one of them) believe that Buy-and-Hold is best. And it is only about 10 percent of the population of Buy-and-Holders who engage in abusive or criminal behavior. The problem is that the 90 percent of Buy-and-Holders who are non-abusive (the Normals) are afraid of you Goons. They might speak up in opposition to the abusive and criminal behavior of you Goons one or two times. But, when that is not enough to make it stop, they retreat into silence.

Which means that the discussions that we all need to have to spread knowledge of what the last 43 years of peer-reviewed research teaches us all about how stock investing works in the real world never take place. And we all miss out on the amazing benefits that should follow from knowing the realities for the first time in history. I want to write about those realities. I want to help people to live better and fuller and freer and richer lives. And the published rules of all the sites as well as the laws of the United States permit that.

Rob

“The Only Thing That I Would Suppress Is Abusive Stuff.”

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

It appears that you want everyone else to keep it zipped, while also expecting the rest of the world to let you say whatever you want on THEIR website.

Not going to happen, Rob.

I have zero desire to have anyone keep it zipped. The only thing that I would suppress is abusive stuff. And I would suppress abusive stuff because it scares people and causes them to self-censor. I want to hear what those people think.

I think it will happen. The fact that the published rules of every site prohibit the tactics that you Goons have employed to suppress honest discussion of the peer-reviewed research shows that as a nation of people we do not like the abusive and criminal stuff. We have thus far tolerated it in the investment advice field because we are conflicted by our love of Get Rich Quick/Buy-and-Hold. But I think it will become difficult to maintain that love in the face of all the human misery we will see following the onset of the next Buy-and-Hold Crisis. I believe that at that point we may permit our better selves to have a little more say in these matters. And then we are off to the races.

We’ll see, you know? I believe that we are fundamentally a good people.

Rob

“We Can All Enjoy Annual Returns of 6.5 Percent Real Without Permitting Any Irrational Exuberance Whatsoever.”

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

Instead, you have adopted the “Get Broke Quick” method.
30 years of consistent saving via buy and hold is hardly “quick”. Instead, it is a slow, methodical and proven way of retiring successfully.

Did the Great Depression “prove” that pushing stock prices up to unsustainable levels is a good idea?

I see it just the other way around. We can all enjoy annual returns of 6.5 percent real without permitting any irrational exuberance whatsoever. I vote for that. A 6.5 percent real return should be plenty. Relentless promotion of the Get Rich Quick/Buy-and-Hold stuff is killing us.

My sincere take.

Rob

“The Price of Stocks Will Change Once We Begin Permitting Discussion of the Research”

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

A portfolio is worth whatever you can sell it for in the market. No more, no less.

That’s the question under dispute, Sensible.

I agree that FOR THAT ONE DAY that is indeed what it is worth. But, if someone is planning a retirement, he needs to look beyond just what applies for that one particular day. If you are planning a retirement, you should be willing to take into consideration what the peer-reviewed research says re the true and lasting value of a portfolio. If the peer-reviewed research shows that you must take the CAPE value that applies on the day the retirement begins into consideration in calculating the safe withdrawal rate, then you should do that. You obviously get a very different number if you take the peer-reviewed research into consideration than what you get if you just ignore the peer-reviewed research.

I have a hard time seeing why we even have peer-reviewed journals if we are not going to permit people to talk about what the research shows. To my way of thinking, the research only has value to the extent it causes people to change their behavior. How can research change people’s behavior if they don’t feel comfortable talking about what the research shows and asking questions about it and so on?

We permit people to talk about the research in every other field of human behavior. Why do you think that the investment advice field needs to be so special?

Do you see that the price of stocks will change once we begin permitting discussion of the research? Then the price that the portfolio will sell for will be more in line with the real price. Given what you are saying here, that should make you happy. So you should logically be in favor of permitting honest posting re the research. Yes?

Rob