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 agree, Rob.  People shouldn’t be repeating things over and over again.  People like that should have their posts blocked, don’t you think?  It really is rude to do that.  It is like telling people that you don’t listen.

It’s true that the discussions have been repetitive. That’s because there is nothing to say on the Buy-and-Hold side. If valuations affect long-term returns (they do, according to Shiller’s Nobel-prize-winning research), then valuations have to be taken into consideration in any decision relating to stock investing. The reason why the Buy-and-Holoders reacted with so much defensiveness when I said that Greaney got the numner wrong in his study (the study does not contain a valuiation adjustment) is that they are all on some level of consciousness aware that the Buy-and-Hold retirement studies get the numbers wrong but they very much do not want to give up the way of thinking about stock investing (Buy-and-Hold) that produces those numbers.

Valiuation-Informed Indexing is research-based. Buy-and-Hold is emotions-based. Advocates of the two models speak two different languages. The words that they put forward do not connect with people who follow the other model. I still believe that the Greaney study lacks a valuation adjustment. But you DO NOT CARE. You like thinking that the safe withdrawal rate is always the same number, that valuations do not matter. You do not want to hear about any research saying otherwise. You want ton continue to believe in the stuff that the people who developed the Buy-and-Hold strategy believes in at the time when the strategy was developed (which was of course prior to the publication of Shiller’s Nobel-prize-winning research).

Will there be a greater desire to get the numbers right in the days and years following the onset of the next Buy-and-Hold Crisis? Will the pain that we all witness cause more people to want to know about the first true research-based model? That’s the question on the table today. The only way to find out the answer is to wait and see. I think it might. I sure hope it does. But I don’t claim to know everything. I’m some guy who posts stuff on the internet, nothing more and nothing less. I find the Buy-and-Hold stuff scary because I believe that Shiller’s Nobel-prize-winning research is legitimate research. That’s pretty much it.

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 will mark you down as someone that can’t deal with reality.

Today’s stock price really is a current-day reality. It is the product of the votes of millions of investors. It’s what we collectively believe today the stock price should be. We could set the stock price wherever we wanted it to be and we set it where it is. So one could say that it reflects reality.

But Shiller’s research is a reality as well. His book is a reality. Today’s CAPE value is a reality. My claim that the Greaney retirement study lacks a valuation adjustment is a reality. The Bennett/Pfau research is a reality. The laws against death threats and extortion are realities.

Those latter realities are being suppressed at this time so that the former realities can remain realities a bit longer. If as a nation of people we were to give full recognition to the latter realities, the former realities would change. We would collectively set the stock price at a very different place. I would like to see that happen. I would like to see all of the realities given recognition.

I believe that we all will begin living fuller and better and richer and freer lives once all of the realities are given recognition. I believe that our stock market will be less volatile and that are economic and political systems will be more stable once that change takes place. Recognizing more of the realities means developing a deeper understanding of how stock investing works in the real world. It’s a move away from the dark ages belief that wherever investors happen to set the price at a certain time is the most important thing and there is no need to take into consideration how emotion went into the decision to set prices at that place.

We’ll see , you know? I naturally 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 for another blog entry at this site:

You have been all telling us the story for 20+ years about how you are going to be rich from market timing and all the buy and holders would be broke.  You admitted that anything beyond 10 years is long term.  More than double that time has expired and during this very long period of time, you went broke and the buy and holders have been incredibly rewarded.  Meanwhile, you keep up with the same stories of disaster like Chicken Little while doing nothing to address your complete financial failure.

You’re right about the 20 years, Anonymous.

Do you think irrational exuberance is a good thing or a bad thing? I think it is a very bad thing. I think of irrational exuberance as the cancer of the personal finance world. So somehow it doesn’t impress me too much when you say: “Hey! We managed to let the cancer get more out of control this time than it ever did at any earlier time in U.S. history.” You talk about that as if it is a good thing. I think of all the human lives destroyed because people did not know the true value of their portfolio for so many years.

I would like to see honest posting at every site so that never again we do we have to go through something like this. 10 years of irrational exuberance is bad stuff. 20 years of it is twice as bad. We are coming at this from different starting points. That’s why we always end up at different end points.

If I were king of the universe, we would permit honest posting re the last 42 years of peer-reviewed research at every site. If we did that, I believe that we would never see another bull market. Which means that we would never see another bear market. Which means that we would never see another Buy-and-Hold Crisis. I could live with that, you know?

Do you see any downside?

Rob

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

It is not proper when there is no error, as thousands have pointed out.  Did Wade Pfau say there was an error?  No.  Did Shiller say there is an error? No.

Pfau said: “Yes, Virginia, Valuation-Informed Indexing works!” Valuation-Informed Indexing calls for market timing in response to shifts in valuations. Buy-and-Hold discourages market timing. To say that Valuation-Informed Indexing works is to say that the claim of Buy-and-Holders that market timing doesn’t work or is not required is in error.

The title of Shiller’s book is “Irrational Exuberance.” The reason why the people who developed Buy-and-Hold concluded that market timing is not required is that they believed that the market is efficient. That’s another word for saying that the market is rational. The idea is that investors take into consideration all developments that affect the return on stocks when setting the price of stocks. It would be rational to do that, not irrational. Shiller is saying that for emotional reasons investors do not take into consideration all developments that affect the price of stocks. To say that investors are irrational is to say that Buy-and-Hold is in error.

It’s not thousands who today say that there is no error in the pricing of stocks, it is millions. It is all stock investors. To the extent that the millons of people who owned stocks today believed that the price of stocks is in error, they would correct it. Today’s stock investors are living in delusion, Anonymous. A CAPE value of 30 is a CAPE value of deliusion. Irrational exuberance is a delusion. Development of the Buy-and-Hold strategy did not create the delusion. Stock investors have been living in delusion ever since the first stock market was opened for business. Every bull market is an act of delusion. If investors were not deluded, they would price stocks properly. There would be no overvaluation.

The error is not really an intellectual error. It is an unfortunate inpulse inherent in human nature to want to get something for nothing. Stock investing is dominanted by this impulse because it is investors who set the price of their stocks. Investors possess the power to vote themselves raises whenever they please and, so long as no one mentions the reality that the pumped-up price is going to disappear in time, the pretend money appears to be real and makes the human investors feel good. The error is believing that the pumped-up prices are real.

Awareness of the error corrects it. Stock investors do possess the capacity for rationality. When they become aware that there is irrational exuberance present in the current stock price, their rationality causes them to engage in whatever amount of market timing is required to get their risk profile back to what they had wanted it to be when they started investing. So irrational exuberance is self-correcting SO LONG AS INVESTORS HAVE EASY ACCESS TO THE INFORMATION NEEDED TO MAKE RATIONAL CHOICES. A ban on honest posting neutralizes the part of the brain that wants to make rational choices by permitting the investor to enjoy his delusion without the unccomfortable feeling that he has permitted his risk profile to get out of whack.

The error is in human nature. We all want something for nothing. So we are all drawn to Buy-and-Hold/price indifferent strategies. It’s not an intellectual error, it is an emotional error. Anytime someone observes that “stocks are overpriced today,” they are saying that there is an error. To misprice stocks is to make an error. The purpose of market timing (the long-term variety, not the short-term, variety) is to correct errors, to get prices back to where they should be. Market timing is the thing that brings rationality (the correction of errors) into the stock buying process.

Someone who says that there is no error is saying that there is no mispricing, that there is no overvaluation. Do you say that stocks are priced properly when the CAPE value is 30?

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:

Since you don’t really spend much time on your book each day and your posts only take a few minutes each day, what do you do with the vast majority of your time?

I spend it overcoming the feelings of angst that follow from the social ostracism that has been visited on me.

I don’t want anyone else ever to experience something like this. So I need to come to a deep understanding of what’s going on. I could state it simply and say “Greaney doesn’t want to correct the error in his study and there are people who are friendly to him who are willing to help him supress the discussions that thousands of people have indicated they want to have (and those thousands of course stand for millions in the larger community of investors)”. That would be a true statement so far as it goes. But it doesn’t tell the full story.

Why do site owners go along? Why don’t researchers want to make a name for themselves by showing the realities? Why don’t journalists expose the massive act of financial fraud?

That’s the conspiracy theory that you Goons often refer to. There was not a group of people who met in a room and decided to pull off this fraud. That way of thinking about it is just not believable. But people ARE acting in concert. It’s not just Greaney and Lindauer. Not by a long shot.

It’s something inherent in human nature. We have had bull markets since the first stock market opened for business. And they have always hurt us. Why have we not as a nation of people worked up the will to stop them from forming? That’s what Shiller’s research is about. That’s what my journalism is about. It’s about changing the nature of the stock investing project in a fundamental way. In the past it’s always been about pushing prices up to crazier and crazier levels and celebrating the act of doing so. Valuation-Informed Indexing is very different. It’s about reining in the Get Rich Quick urge so that prices reflect the economic realities to the greatest extent possible.

So I am taking on something fundamental to human nature with every word I write. It’s scary to do that. It’s not intellectually all that hard. It’s common sense. But it is scary emotionally to go against the crowd in a way that makes the crowd so angry. The vast majority of Buy-and-Holders are not as angry as you Goons, of course. But the majority is synpathetic to the Goon position while not approving of the Goon tactics. You Goons never could have pulled off what you have pulled off if that were not so.

It’s painful, difficult work to go against the crowd in this way. I of course believe that it is necessay work, that someone has to do it so that we never have to live through something like thus again. But it ain’t away being the one who is the target of all the hostility.

Most of my time is devoted to overcoming the anxious feelings that result from that. I might try to write about an important point and then experience some feelings of angst because I am being critical of an aspect of human nature that millions of people do not want to see esposed. Maybe I would go on a walk to quiet those feelings. Or look at a baseball game for a bit. Or surf the interest. Or talk to a friend. Anything to ease the feelings of angst that need to be quieted if I am going to get to the heart of this problem and put the words down on paper that need to be put down to solve it.

It’s not physical labor and it’s not intellectual labor. It’s primarily EMOTIONAL labor. It’s an emotioanl problem. The Buy-and-Holders are smart. There’s no lack of intelligence holding us back It’s a desire to avoid facing these painful feelings of angst at stnading up to the crowd that is holding us back. My job is to do that. I do what I can to hang in there. Someone has to do it. All of us need to see this problem solved. We are all in the same board and we all want the same thing. So I hang in there. The hanging-in-there part requires some calming activities that unfortunately tend to soak up a good bit of time.

It frustrates me that that is so. But I have been shown again and again that it is so. I sometimes feel a temptation to get down on myself for not having finished the book sooner. But then I recall that no one else has written the book that I am writing (including Shiller!) in the 42 years since he published his amazing research and I realize that no one has done it because it is such a darn hard thing to pull off. And I grant myself some relief in the form of taking a walk or whatever so that I can continue drilling down on all the stuff that I need to drill down on and not let that pain associated with doing that cause me to stop doing so.

I hope that that helps, at least a tiny bit. It’s highly fulfilling work. But it’s not fun work. Not by the longest of long shots. No sane person would choose to do with this work unless he had seen with his own eyes how many people there are out there who long to know how stock investing works in the real world and who have seen their hopes for coming to learn that smaskee to the ground in such horrible ways as we have seen them smashed to the ground during the first 21 years of our discussions.

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:

I look at outcomes.  You are busy trying to deflect your failures through word salad.

Okay, Anonymous.

Research looks at historical outcomes. The difference is that research looks at all outcomes, not just those in the present day or the recent past.

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 said there are “thousands”.  How would that be separated from the pack?

The first 21 years of our discussions show that about 10 percent of the population of U.S. stock investors believe that Robert Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns (that the stock market is NOT efficient/rational) is legitimate research. That’s MILLIONS of people. But there are ten times as many people who believe that Buy-and-Hold is a legitimate strategy, that market timing/price discipline is not always 100 percent required for every investor (that the stock market IS efficient/rational). So the people who believe this are a small minority. They are not an insignificant minority. Millions of people are a lot of people. But the number is small enough today that the minority feels a need to zip it when it comes to discussions of whether or not market timing.price discipline is always 100 percent required for investors who want to keep their risk profile stable over time.

There are other issues where we permit people who hold beliefs held by only 10 percent of the population to express those beliefs openly. But the belief that market timing/price discipline is always 100 percent required for all stock investors is a belief that causes a particularly great amount of anguish among the majroity of people who hold the majority belief, that market timing is not required, that market timing doesn’t work, that the number on their portfolio statement provides an accuratre and real and lasting indication of the value of their stock holdings. People use their stock holdings to finance their future lives. It affects them in hundreds of ways, one of those ways being that it affects whether they have saved enough to retire or not.

So it is extremely upsetting to them to learn that there is 42 years of peer-reviewed research showing that the number on their portfolio statement (a number that according to current practice is NOT adjusted for the amount of irrational exuberance present in the stock price at the time that portfolio statement is developed) is wildly off the mark. So the 90 percent for 42 years has suppressed discussion of the far-reaching how-to implications of Shiller’s Nobel-prize-winning research findings. A social taboo has developed prohibiting discussions of these matters. I violated that social taboo when I questioned whether we should be considering the effect of valuations when calculating the safe withdrawal rate. Hence the many board bannings.

I believe that as a nation of people we need to do away with the taboo on honest discussion re these matters. Today’s CAPE value is 30. That’s scary. The stock market is priced today for an ocean of human misery to be delivered in the next year or two or three in the event that stocks continue to perform in the future somewhat as they have always performed in the past. Shiller’s research is powerful, amazing research. But it has not achieved results in the practical realm. If we took Shiller’s research seriously, we never again could as a nation of people permit the CAPE value to reach such a dangerous level. We have elected as a nation of people to ignore the last 42 years of peer-reviewed research and to continue to invest in ways that cause periodic (about once every 40 years) economic collapses.

I believe that we should as a nation of people give ourselves permission to openly discuss what the research shows us all about how stock investing works in the real world at every discusion board and blog on the internet, without a single exception. You Goons would prefer that Greaney not need to correct the error he made in his retirement study (it lacks an adjustment for the valuation level that applies on the day the retirement begins). Thus, you would like to see the taboo on honest discussion of Shiller’s research to continue and we are working at cross purposes. That’s the conflict. That’s been the conflict going back to the morning of May 13, 2002. You refuse to permit honest posting and I refuse to say that I believe that the Greaney study contains a valuation adjustment (and of course I believe that Shiller’s Nobel-prize-winning research contains a valuation adjustment).

Anyone who says that market timing/price discipline is required when buying stocks separates himself from the pack by doing so. I believe that, to advance in our understanding of how stock investing works beyond what it was in 1980, we need as a nation of people to overturn the taboo and give ourselves permission to explore the far-reaching implications of Shiller’s amazing research. I have separated myself from the pack. I have violated the taboo. Hence, all of the horrible consequences that have been visited on me, which you Goons make reference to and celebrate in nearly every post that you advance. I feel that to capitulate to your demands that I keep it zipped re the error in the Greaney study would just make matters worse. I feel that everyone, Buy-and-Holders and Valuation-Informed Indexers alike, should be posting honestly. So I have elected not to capitulate. I continue to post honestly and to say that I believe that the Greaney study LACKS a valuation adjustment, intimidation tactics be darned.

My best 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:

If you had friends and they were scared, they could post anonymously. Your story doesn’t hold water.

Even if you post anonymously about the realities of stock investing, you have still separated yourself from the pack, Anonymous. Irrational exuberance is vulnerable stuff. If people talk about it, the Pretend Money goes “Poof!” People do not want to be separated from the pack. That was put in us by evolution. So even anonymous posting does not solve the problem.

When every site has been opened to honest posting. I think that will solve it. The more that people see others doing it, the more comfortable they are going to feel doing it themselves.

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 don’t have to sell you cheap shares just because you don’t want to pay the price.  If you don’t want to buy a stock at its current price, you don’t have to.  Just don’t expect anyone to sell to you at a lower price just because you say so.

The market sets the price, not me. I am saying that we should permit each investor to become informed as to what the research shows. Informed investors are going to practice price discipline because the benefits of doing so are so great. That would solve the problem.

The price that is set at a time when honest posting re the research is banned is obviously not the price that would apply if honest posting re the research were permitted. We should all want to see the market become empowered to perform its core purpose of getting prices right.

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 claim that your timing scheme can help make people money, yet it doesn’t.  This has been the basis of why you think you should get $500 million.  However, you also state that Shiller and Pfau say people should time the market.  If that is the case, then why should anyone pay you anything.  It would be from their work right?  Shouldn’t they get paid?  You didn’t come up with the idea.  Also, since Pfau pointed out that your timing scheme has worked since Shiller’s work.  Does that mean that you owe people money for peddling a failed scheme?

Humankind did not arrive on Planet Earth with a manual on how stock investing works. We are learning as we go. The Buy-and-Holders made many amazing contributions. I 100 percent recognize them for that and am grateful to them for that. They made a mistake on market timing. They got it right re short-term timing — the evidence shows that that does not work. But they failed to distinguish short-term timing (which is just a guessing game) from long-term timing (which is price discipline. They made their mistake because they were working under a false belief that the market is efficient. Shiller discredited the Efficient Market Theory. which means that long-term market timing must work.Price discipline works in every market in which it has been employed. There has never been any reason for believing that it is not 100 percent essential in the stock market as well except for the Efficient Market Theory, which has now been discredited, freeing us all to explore what really works.

My contribution will be to open every site to honest posting re the last 42 years of peer-reviewed research. Shiller’s research does no good if we are not all free to talk about it at every site. We all have a Get Rich Quick/Buy-and-Hold impulse residing within us which causes us to want to believe that perhaps it will all turn out different this time, that perhaps this will be the first time in history when a pure Get Rich Quick/Buy-and-Hold “strategy” does not cause widespread human misery. Id we are going to overcome our Get Rich Quick/Buy-and-Hold urge, we need to be able to hear from thousands of our fellow investors helping is to tune out the noise of the Wall Street Con Men, who continue to advocate Get Rich Quick./Buy-and-Hold “strategies to this day, re years after they were discredited by the peer-reviewed research.

Today’s CAPE value reveals how much good it does us to have Shiller’s book carried in all of the libraries but not being able to explore the far-reaching how-to implications of Shiller’s Nobel-prize-winning research at every site. Without the discussion, the research and the book do not help. To have the book carried in libraries but not to permit all investors to talk over the meaning of Shiller’s amazing research is like mentioning one time that gaining too much weight can lead to heart disease but banning all discussions of how to develop good eating habits and not permitting people to share recipes for healthy meals. The follow-up implementation stuff is of hugre value. Once every site has been opened to honest posting re the research, we will be getting mountains of the follow-up implementation stuff.

I proposed that we start down that road on the morning of May 13, 2002. The work that I have done would obviously have brought in a very big multiple of $500 million ir it had not been for the absusive and in some cases criminal bahevaior of you Goons and of the site owners who encouraged your behavior by banning honest discussion of the peer-reviewed research. I have said that I would be willing to settle my legal claims for $500 million because it is such an absurdly big number that I don’t see any great need to seek more and because I would like to put the ugliness of lawsuits behind us so that we can all work together to get the word out about Shiller’s amazing research findings to every investor on the planet.

Does all of that not make perfect sense?

Rob