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 already admitted in another thread that timing didn’t work when you said:

“Going by the historical, the crash should have arrived 14 years ago. You’ve got me re that one, Anonymous. We are living through something unprecedented. It’s scary.”

You’re saying that the timing did not work in the short term. I acknowledge that it didn’t work in the short term. But I do not advocate short-term timing. I advocate long-term timing.

The reason why market timing is essential is that irrational exuberance is a real thing. Irrational exuberance is a terribly destructive force (it is responsible for nearly 70 percent of the risk of stock investing, according to the peer-reviewed research that I co-authored with Wade Pfau). So we need a way to combat it. The only means available to us to combat irrational exuberance is market timing. So we want to do everything we can to encourage market timing.

You are saying that sometimes irrational exuberance persists for a long time. That is so. We have never before seen irrational exuberance persist for as long as it has in this current bull market. That’s why it is so imperative that we open every discussion board and blog on the internet to honest posting re the last 40 years of peer-reviewed research in this field. Doing that will help us pull stock prices down. Failing to do it will permit them to remain high for an even longer time.

Any market timing that people engaged in a few years ago to bring stock prices down did not “work” in the sense that stock prices are still insanely high. But it was a noble effort. If we had been able to bring prices down a few years ago, millions and millions of people would have been able to do a better job of planning for their financial futures. People who should have been saving more but were fooled by the phony numbers on their stock portfolio statement would have saved more. Entrepreneurs who started businesses that they would have not started if the economy was not being artificially pumped out by the phony stock numbers would not have started those businesses (and thus would not have to see them fail with the next price crash). Politicians who were given credit for a good economy during the time the economy was being pushed forward artificially would have been assessed by voters more effectively. And on and on and on.

There is no possible benefit that comes from lying to ourselves about the value of our stock portfolios, Anonymous. Irrational exuberance is a terribly destructive force. We all should be doing everything in our power to keep it in check. That means engaging in market timing. We all should be engaged in market timing and we all should be encouraging our friends to engage in market timing.

To say that there might be some circumstance in which market timing might not work is like saying that there might be some circumstance in which driving sober did not work. If you drive drunk on a few occasions and survive the rides, it doesn’t follow that driving sober no longer works. Driving sober is always better than driving drunk. Practicing market timing (price discipline!) when buying stocks is always better than failing to practice market timing when buying stocks. It is not possible for the rational human mind to imagine any exceptions to the rule.

If the market were efficient, none of this would be so. But the market is NOT efficient. Shiller showed with his Nobel-prize-winning 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:

The 2008 financial crisis was due to the debt obligations in the high-risk mortgage debt markets. It has nothing to do with stocks. To say otherwise indicates your lack of knowledge.

Okay, Anonymous.

I do wish you all good things, in any event.

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:

“ There were hundreds of thousands of businesses that went under as a result of the 2008 Buy-and-Hold Crisis. Were the owners of those businesses winners?”

They went out of business due to debt and not the stock market.

The people hurt by 5hecmarket were market timers.

We disagree, Anonymous.

If irrational exuberance is a real thing, there were trillions and trillions of dollars of pretend money floating around in our economy in 2008. Naturally, that was going to cause a collapse sooner or later. In September 2008, that collapse happened.

There’s always going to be something else that you can blame for an economic collapse. A guy who was driving a car with no brakes could blame the toll booth for causing him to crash. I think that’s silly. If he had had brakes in the car, he could have handled the toll booth without too much of a problem. And, if we had done something to lessen the irrational exuberance, we could have handled any debt problem that came up. Market timing is the tool that we use to lessen irrational exuberance. So the key to everything is making sure that all investors always practice market timing (price discipline!).

My sincere take.

And my best and warmest wishes to you.

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:

“ The 2008 economic crisis is a HUGE failure associated with Buy-and-Hold. ”

Wrong. Buy and holders just kept buying and have made a fortune. Meanwhile, you stayed out of the market and fell even further behind and can no longer catch up.

There were hundreds of thousands of businesses that went under as a result of the 2008 Buy-and-Hold Crisis. Were the owners of those businesses winners?

There were millions of people thrown out of work in that crisis. Were those people winners?

We saw political frictions increase on both the left and the right as a result of that crisis — the Occupy Wall Street movement and the Tea Party movement were both fueled by it. Are we all better off because of the increases in political frictions that we have seen in recent years?

Please mark me down as saying that we need to open every discussion board and blog on the internet to honest posting re the last 39 years of peer-reviewed research in this field. Having millions of people invest their life savings in the stock market while discouraging market timing (price discipline!) is like driving a high-performance car down a highway with a high speed limit without brakes. Doing something like that always ends in tears. It is not safe to drive a car without brakes. And it is not safe to encourage people to invest in stocks without making clear to them how essential it is to practice market timing so that prices do not get out of control and bring on an economic crisis that causes an ocean of human misery.

Not this boy, you know? No can do. No freakin’ way, no freakin’ how. Not my particular cup of tea.

I do wish you all the best that this life has to offer a person, in any event.

Rob

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

If I was only sitting on $500K and was hoping that a get rich quick market timing scheme was going to save me, I would be very worried. However, If I am sitting on $10 million, with a successful buy and hold track record, I would be very comfortable because I know that market go up and down, but have always recovered from any drop.

You’re entitled to your opinion, Anonymous. I say that a Great Depression hurts everyone. If we experience a Great Depression and the political turmoil that follows brings the political system down. that $10 million is not going to be able to buy you much comfort. We live in communities. Destroy the community you live in to turn a quick buck and in the end you hurt yourself as well.

Market go up and down. But there is no need for them to go up and down nearly to the extent that they do when the Buy-and-Hold stuff is being heavily promoted. If we permitted honest posting re the last 39 years of peer-reviewed research, I think we could limit the lows to a CAPE of 12 and the highs to a CAPE of 20. That would be a lot better than these crazy swings from 8 to 44 that have destroyed so many human lives.

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:

Rob,

You are moving the goal posts. Read again. You made the claim that rich people are more vulnerable. You are wrong. I have explained why. When someone has $10 million and the S&P has a drop, it does not have much of an impact on how they live. They are not “vulnerable” as you claim. In fact, they are in a position to capitalize on drops. Look at how the rich have profited off of every “crisis” including the current Covid-19 situation.

I agree that someone who has $10 million in assets is not as vulnerable as someone who has $500,000 in assets. Absolutely.

The question that I explored in the blog entry is why the price crash has been so long deferred. I wrote that one big factor is that as a nation we are richer today. It’s not just people who have $10 million in assets who are richer, people who have $500,000 in assets are richer too. People in both camps want to hold on to what they’ve got and the last 39 years of peer-reviewed research is perceived by them to be a threat to their ability to do that. If those people has not built nice lives for themselves, they would not care as much and they might have permitted the crash to take place back in 2006, as Shiller predicted. As we have become a richer nation, it has become more difficult to make the transition from a bull market to a bear market. Shiler was using data from earlier time-periods to form his prediction. That data obviously did not reflect the increased wealth that we have all enjoyed in more recent decades of our history.

Increased wealth is a good thing. But it makes us more anxious about stock price crashes. And thereby causes bull markets to last longer and to be more destructive when they arrive.

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:

“ This, in turn, led to a severe decline in liquidity, a stock market collapse, and a collapsing economy worldwide.”

Thanks for proving my point. The cause was decline in liquidity, not buy and hold. Shiller agrees with me.

I disagree strongly.

All that you are showing is that the decline in liquidity was the precipitating event. It is the $8 trillion loss of consumer buying power (caused by promotion of the Buy-and-Hold strategy) that did the most damage. That’s like saying that, when someone is driving a car without brakes and gets to a toll booth and crashes, it is the toll booth that caused the crash. The presence of the toll booth was the precipitating event. But, whenever someone drives a car without brakes, there is going to be a car crash sooner or later. Just as, whenever a large number of investors comes to believe that Buy-and-Hold (No market timing required!) is an acceptable investment strategy, we are going to experience an economic crisis sooner or later. There is no other way that the massive promotion of a pure Get Rich Quick approach could ever turn out.

Shiller predicted the crash and it happened. How did he do it? He has studied the history of the market and has seen that it happens every time. The way to get it to stop happening is to stop promoting Buy-and-Hold and to stop telling investors that market timing/price discipline is not always 100 percent requireed.

That’s Rob Bennett’s sincere take re these terribly important matters, in any event.

My best and warmest wishes to you and yours.

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:

The 24 years refers to your plan. You are the promoter and advocate of VII, not Shiller. You have failed to show even one successful person that has implemented VII and have also failed to show one failure with buy and hold. Like I said, just one big waste of time.

The 2008 economic crisis is a HUGE failure associated with Buy-and-Hold. Permit honest posting and we would never again see a CAPE value high enough to cause an economic crisis like that. Stock prices are self-regulating in a world in which honest posting re the peer-reviewed research is permitted. When prices go up, the value proposition of stocks goes down. So people sell. That brings the price back to reasonable levels. When Buy-and-Hold is pushed relentlessly, rational investing decisions become impossible. Investors are not able to see how much damage they are doing to themselves by following a pure Get Rich Quick/Buy-and-Hold approach. So the only way that the market can get prices down (getting prices right is the core function of any market) is to crash them. A price crash takes trillions of dollars of spending power out of the economy, causing hundreds of thousands of businesses to go under and causing millions of workers to be thrown out of their jobs and causing political frictions to increase dramatically.

No Get Rich Quick/Buy-and-Hold for this boy. I am a big-time believer in letting people learn about what the last 39 years of peer-reviewed research teaches us about how stock investing works in the real world.

My best wishes to you, 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:

“So hundreds of thousands of businesses would not have gone under. And millions of workers would not have been thrown out of their jobs. ”

Wrong. Businesses do not fold because of stock price. They fold due to lack of profit and/or capital. That is how it should work. Why should any business have endless access to debt?

Irrational exuberance is something that disappears into thin air. It is a psychological phenomenon, it does not have economic validity. But businesses count it as real. So they make plans based on a belief that that money will be around. When it disappears, those plans are put at risk of failing. If irrational exuberance is a real thing (Shiller was awarded a Nobel prize for his discovery of it), then it certainly can cause businesses to fail

We all should be doing everything in our power to keep irrational exuberance as limited as possible, To do that, we need to open every site to honest posting re the last 39 years of peer-reviewed research in this field.

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 John Bogle was in on the mass conspiracy against Rob Bennett.

Bogle was in on the mass conspiracy against anyone who believes that Shiller’s Nobel-prize-winning research is legitimate research. His own words show this. Bogle advanced a post to the Bogleheads Forum saying that he could see how Valuation-Informed Indexing could work. He didn’t endorse it. But he said that he could see how it would make sense for an investor to increase his stock allocation three times in the course of an investing lifetime when prices got insanely low and it lower his stock allocation three times in the course of an investing lifetime when prices got insanely high. That’s Valuation-Informed Indexing! That’s what works!

Given that Bogle believed that Valuation-Informed Indexing makes sense, he should have asked Mel Lindauer to knock off the funny business, especially the criminal stuff. He didn’t do that because he was afraid of what Lindauer and his Goon Squad would do to him if he posted with complete honesty. That’s sad. Bogle created a monster when he suggested (as he did on many occasions) that there might be some mystical alternative universe in which it is not 100 percent required to practice market timing (price discipline!) when buying stocks.

The “idea” that it might not be 100 percent required for all investors to practice market timing/price discipline when buying stocks is the marketing gimmick that ate the U.S. economic system. We need to move on to something real, to something truly research-based.

Rob