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

Half of Americans have no retirement savings, just like. Yet here you are, telling a bunch of successful millionaires that you are right and they are all wrong.

Who is dishing out the empty calories???

Anything good that seems to come about because of Buy-and-Hold comes not from the strategy but from the productivity of the U.S. economy. Buy-and-Hold encourages people to invest in stocks and stocks are an amazing asset class because of the productivity of the U.S. economy.

The thing that is distinctive about Buy-and-Hold is that it encourages the creation of irrational exuberance to the max and that only subtracts and never adds. Irrational exuberance makes it impossible for people to know how much genuine wealth they have accumulated and that makes effective financial planning impossible. It would be better to let people know what the research says. Then they could practice price discipline re their purchases of stocks as they do with the purchases of everything else they buy. In a world in which most investors acted in their self-interest and practiced price discipline, stock prices would be self-regulating. That would mean no more bull markets and no more bear markets and no more economic collapses.

All of the good associated with stocks and none of the bad. Investor heaven.

Rob

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’re the one who doesn’t understand, Evidence. You are assuming rationality on the part of investors.”

I am simply following the logic of what you are advocating. You stated “Permitting honest posting re the peer-reviewed research at every site would permit investors to become more rational than they are today.”

If that happened, and investors became “more rational than they are today” then they would look at the low volatility, high return stocks that would be available in your theoretical world and attempt to buy as much as they could (which would be the rational thing to do)

Of course the very act of doing that would drive up the price and lower the return.

The market would find the proper equilibrium. That’s what we should all want to see happen. Let the market work.

Banning honest posting re the peer-reviewed research is a bad idea. A profoundly bad idea. That’s my sincere take.

We know what we know. We obviously know more after the publication of Shiller’s Nobel-prize-winning research than we knew before publication of that research. We should all feel 100 percent free to talk about the amazing and far-reaching how-to implications of that research.

Rob

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

“Today’s CAPE value is the issue.”

It is the issue for you. Stock prices have been too high for you since the mid 90s.

And that is OK. No one should be forced to pay more for stocks than they are willing to pay. As long as you are willing to accept the lower returns from which ever investment classes you are currently invested in.

I, on the other hand, realize that I will need to pay the market price for goods and services that I wish to purchase. If I want to buy a new BMW or a 15 year old Ford Focus I will need to pay the market price. I may wish that market price to be half what it currently is, but that wish won’t get me a car at a 50% discount from the market price.

The issue is whether people should be permitted to discuss the last 43 years of peer-reviewed research at every investing site. That research shows that the CAPE value that applies on the day one purchases stocks affects the long-term value proposition obtained from the purchase. If everyone adjusted his or her stock allocation in response to price changes for the purpose of keeping his or her risk profile constant over time, we could never see the sort of CAPE value that applies today and we could all live richer and fuller and happier and less stressful lives.

You are of course correct that we all need to pay the market price for stocks. The market price is affected by the information to which stock investors have access. Permit honest posting re the peer-reviewed research and investors are going to become better informed than what it was possible to be back in the days when the Buy-and-Hold strategy was being developed. Better informed investors would set stock prices are more reasonable levels and we would all benefit. It’s not even possible to imagine any downside.

Rob

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

We have never seen a buy and hold failure over any 30 year period for our entire history.  Meanwhile, we have never seen one successful outcome with VII.  Even you went broke.  You talk about retirement failures, yet you ignore the fact that you have a failed retirement.  Why would anyone think you are credible?

The Great Depression wasn’t a Buy-and-Hold failure? What was it, a big success?

Rob

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

Show us the academic studies that say that stock prices cause recessions.  Guess what, Rob.  The studies do not show that.  The problem is you just make statements without any facts to back it.

I am highly confident that, six months after we have opened every discussion board and blog on the internet to honest posting re the last 43 years of peer-reviewed research in this field, we will have numerous big names (including some who are today viewed as Buy-and-Holders saying the permitting stock prices to reach insanely high levels does indeed cause recessions. We’ll see.

There’s a reason why Shiller’s amazing research showing that valuations affect long-term returns caused him to be awarded a Nobel prize. Shiller’s research changes everything we once thought we knew about how stock investing works. It takes us from the dark ages to an enlightenment.

My sincere take.

Rob

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

Look up the description of a recession.  It has nothing to do with the current level of the stock market price.  It is based on negative GDP.  VII investors do not own more stock.   It is owned by the top 10% who keep accumulating.  These are just simple facts that anyone can look up.

If irrational exuberance is a real thing (I believe that it is), then there’s a tight connection between high stock prices and recessions. Today’s CAPE value is two times the fair-value CAPE level. If half of the value of today’s stock market is illusory and fated to disappear into thin air at the onset of the next Buy-and-Hold Crisis, that’s trillions and trillions of dollars of spending power that are going to disappear from our economy in a short amount of time. It’s not possible for the rational human mind to imagine circumstances in which that would not bring on a recession, And, sure enough of you look back at times when stock prices reached insanely high levels, you always see a recession down the road a bit.

Not this boy.

Rob

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

So stock has been mispriced, in your mind, for the last 25 years.  Look at how all that has worked out for you.  You are in your 60’s and broke.

Stocks have been mispriced for 28 years, with the exception of a few months in the immediate aftermath of the 2008 economic crisis. That’s been bad for each and every one of us. When stocks are mispriced, both individuals and businesses cannot engage in effective financial planning. Ineffective financial planning diminishes wealth. So the high stock prices of the past 28 years have left us all poorer than we would have been if more of us had been following research-based investment strategies.

The difference between Buy-and-Hold and Valuation-Informed Indexing is that Buy-and-Holders accept whatever stock price happens to apply as real while Valuation-Informed Indexers distinguish between stock price gains caused by real economic factors and those cause by irrational exuberance. We believe that all investors should be practicing valuation-based market timing at all times with the aim of keeping noninal prices as close to fair-value prices as possible for the benefit of all concerned.

Irrational exuberance is the enemy of stock investors, in the eyes of Valuation-Informed Indexers. Buy-and-Holders are complacent about irrational exuberance. They do nothing to overcome it. If anything, they celebrate it. They act like it is a good thing. Yucko to the Max, you know?

Rob

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

Should other board owners be obligated to allow you to peddle your failed timing scheme?  Should other board owners be obligated to let you lie and tell stories on THEIR websites?  Of course not.  We should thank board owners for maintaining decorum on their websites.

Every site owner should permit honest posting re the last 43 years of peer-reviewed research in this field. The question is an absurd one.

It’s clear from the first 22 years of discussions that the majority of site owners would prefer to permit honest discussions. The problem is that to do so would expose the 43-year cover-up and that makes all Buy-and-Holders (which today make up 90 percent of the population) look bad. So the site owners “feel funny” about going there.

We obviously have no choice but to go there eventually. Every Buy-and-Hold Crisis that we have experienced in U.S. history has been a terrifying experience. It’s not a sane choice to just continue to experience them now when there is 43 years of peer-reviewed research making them optional. If we are going to go there sooner or later, it is better to go there sooner. Continued delay hurts every single person involved (you Goons even more than the rest of us — the rest of us are not looking ahead to long prison sentences). So I always advocate that we open every site to honest posting re the peer-reviewed research within the next 24 hours.

I also try to be careful to note that we need to open every site to honest posting “without a single exception.” You never know where the next powerful research-based insight is going to come from. We certainly do not want to leave anyone out!

My best wishes, etc.

Rob

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 went to the grocery store today.  When I went to check out, the cashier asked me for my peer-reviewed research papers to pay for the groceries.  I tried to use some money from my almost $8 million in savings, but she said that due to the current CAPE ratio, she would only accept a market timing opinion of Robert Shiller’s work.   Woe is me.  How will I ever survive this financial nightmare.

Should we shut down all the peer-reviewed journals, Anonymous?

Rob

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

Wendy’s won’t tell you the Junior Bacon Cheeseburger is $3 and then charge you $6 for it. The stock market won’t tell you that Wendy’s stock is $20 per share and then charge you $40 for it. Market forces determine stock price. If enough investors think that Wendy’s is going to be growing like crazy then that $20 per share stock could all of a sudden be worth $40. Likewise, if the $3 JBC is seen by everyone else as a bad value then Wendy’s will have to cut the price of the burger and may need to cut costs in other areas in order to stay in business. This is how markets work. Everyone has a say. No single person can dictate prices.

I don’t agree. I agree that this is how markets SHOULD work. But it’s not how they work in the real world. In the real world, there’s a thing called irrational exuberance that makes investors want to believe that their $50,000 portfolio is really worth $100,000. There’s a lot of money to be made encouraging those irrational beliefs. Thus, the Buy-and-Hold “strategy.” And, if anyone reports on what the last 43 years of peer-reviewed research says, the entire Buy-and-Hold house of cards comes crashing to the ground. Hence, the ban on honest posting.

There are times when the cashier at a Wendy’s overcharged the customer. The wonderful thing is that the customer who is overcharged usually complains. So this doesn’t become a standard practice. In the stock market, the person who is overcharged for the stocks he is buying LIKES it. When he pays double the real value for those shares, he believes that all of the shares he bought at early times are now worth two times their real value. So he is fine with being overcharged. If people reacted in the same manner to being overcharged in the stock market as they do to being overcharged in any other market, the CAPE value could never rise to where it resides today.

Market forces do NOT determine stock prices. For market forces to determine stock prices, we would need to open every site to honest posting re the peer-reviewed research. Relentless promotion of the pure Get Rich Quick/Buy-and-Hold strategy makes the stock market dysfunctional.

Rob