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

Wade Pfau doesn’t promote VII.  He promotes a bucket strategy.  Rob Arnott and his firm use a weighted stock index system.  JWR is no longer with us, so we can’t see what he is recommending.  I don’t recall seeing any of these people asking to buy you out or invest with you.  If these people really thought you had value, we would have seen something of confirmation in what they did or do with their money and recommendations.

Join with me to work to open every site to honest posting re the last 42 years of peer-reviewed research and you’ll see it. You’ll see it from Wade Pfau and from Rob Arnott and from thousands of others. Without honest posting, there is no way to spread knowledge of new research findings and thus no means of correcting mistakes. It is absolutely essential. I think it’s the answer.

I know it is!

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 think you are rational?

I try to be rational. All human investors have the capacity to be rational but also have an inclination to give in to Get Rich Quick/Buy-and-Hold urges. The value of research is that it helps us to see the dangers of going with a pure Get Rich Quick/Buy-and-Hold approach. That’s why I say that we should permit honest discussion of the last 42 years of peer-reviewed research at every site, without a single exception.

The more rational we all become in our investment choices, the fewer bull markets we will see and the fewer bear markets we will see and the fewer economic crises we will see. Today’s CAPE level is the result of the ongoing ban on honest posting re the peer-reviewed research. The more we all were encouraged to practice effective market timing, the less voatility we would see in stock prices and the more stable our economic system would be.

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:

Anonymous is worth $6.4 million. That’s pretty good but he’s not controlling institutions and he’s not capable of being extremely influential. Who are these goons that are pulling the strings?

We all have a Get Rich Quick/Buy-and-Hold urge residing within us. We all want to believe in the fantasy of getting something for nothing. It’s just human nature. We are to a large extent pulling our own strings.

Did anyone have to pull any strings to get people to like smoking cigarettes? Injesting tobacco made people feel good. People do less of it now that they know about the research showing that smoking causes cancer. The heads of the tobacco companies didn’t want that getting out. They fought it. To that extent, they pulled strings. we have that kind of string-pulling in the investment advice field. That was a time when we didn’t know how stock investing worked, when Shiller’s Nobel-prize-winning research had not yet been published. So just about everyone in the field jumped on the Buy-and-Hold bandwagon. Now they feel that they will look bad if people learn about the realities because they have been covered up for 42 years. So there’s a lot of instituional pressure not to talk about the realities, not to acknowledge the cover-up.

But people who work in this field are like people who work in every other field — they want to help people, they want to feel good about themselves when they go to bed at night. So there are conflicting pressures. There’s a pressure to continue the cover-up and there’s a pressure to tell people about the realities. Most of the experts try to do a little of both. They tell enough of the truth to help out their clients a little bit but not so much as to get into real trouble.

That doesn’t get the job done, If it did, the CAPE value would not be where it is today. Given that we all have a natural Get Rich Quick/Buy-and-Hold urge, halfway measures don’t get the job done. People need to be reminded daily of the dangers of failing to engage in market timing or they just are not going to engage in it. People want to believe that the numbers on their portfolio statement are real. If you want to persuade them that it is not so, you need to make the case repeatedly for it to stick. People can be reached, It can be done. But it’s not any easier to quit Buy-and-Hold than it is to quit smoking, It’s a highly addictive strategy.

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:

Bernstein told you to quit your job and to get out of stocks?  Really?

He said in his book that the safe withdrawal rate at the top of the bubble was 2 percent. Greaney should have corrected the error in his study within 24 hours of the moment it was brought to his attention (the morning of May 13, 2002). People use retirement studies to plan retirements.

If we were all thinking clearly, there would not be one person in the United States disagreeing with any of this. There is clearly more than one. Why? Because Shiller was right. Investors are NOT 100 percent rational (as was assumed by the people who developed Buy-and-Hold). Investors are humans. Humans are CAPABLE of rationality. There are also prone to becoming highly IRRATIONAL at times.

The Bennett/Pfau research shows that market timing (the tool we use to make stock investing more rational) is 70 percent of what it takes to achieve long-term stock investing success. So advocacy of market timing should make up 70 percent of what we hear from investment advisers. That’s not Buy-and-Hold. That’s Valuation-Informed Indexing.

My best and warmest wishes to you and yours.

Ro

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 the market and how it works is the same, in your mind, as 1929?  It doesn’t seem you have much knowledge about his things work.  No wonder you are broke.

Yes, I believe that the stock market works the same as every other market that has ever existed. Price discipline is by far the most important thing. From time to time we forget that that’s the case with the stock market because our Get Rich Quick urge caused us to place great value on the creation of trillions of dollars of irrational exuberance. When that happens, we all pay a terrible price.

I believe that we should permit honest posting re the last 42 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:

Like I said, you are calling them liars…..yet it is also a conspiracy since they are all in on it.

We all have a Get Rich Quick/Buy-and-Hold urge residing within us, Anonymous. That much is certainly so.

You could say that we’re all drug addicts or that we are all gambling addicts or that we are all sex addicts because we all have the potential to fall prey to those horrible addictions. The Bennett/Pfau research shows that it is nothing inherent in the nature of stocks that requires that they be a high-risk asset class. The risk for which stocks have become known over the years is the product of the Get Rich Quick/Buy-and-Hold impulse that resides within us all. Now that we have 42 years of peer-reviewed research showing us how to overcome that urge (through market timing/price discipline), the days of risky stock investing are over once we pull together as a nation of people to open every discussion board and blog to honest posting re the peer-reviewed research, without a single exception. I recommend doing this by the close of buisiness today, if not a good bit sooner.

My best 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 top 10% own 90% of all assets, including stocks. The problem is that most people cannot afford to own enough stock because they haven’t save enough (just like you). If you think stocks are valued too high, don’t buy it. Don’t expect people to sell you their assets for cheap. If some guy is selling his house for $1 million, why should he sell it to someone only willing to pay $100,000 just because he thinks it is too expensive?

If you want something, be prepared to save up the money and pay what someone is asking for it. Otherwise, you are out of luck.

I completely agree that people should sell their stocks for what they think they are worth. That’s how market prices are set. Where we differ is that I say that people shoulde have access to all of the information they need to determine what their stocks are worth. There is now 41 years of peer-reviewed research showing that valuations affect long-term returns. We should be discussing the how-to implications of that research at every site. That would permit people to set the price of their stocks properly. It would permit the price to return to real-value levels from the crazy levels we have seen apply during the Buy-and-Hold Era.

The market can never be 100 percent efficient so long as we all carry a Get Rich Quick/Buy-and-Hold impulse within us. But I believe that we can bring the market much closer to efficieny than it has been in recent decades by opening every site to honest posting. People need information to form proper assessments. The last 41 years of peer-reviewed research is important information. We should be permitting discussions of it everywhere.

That’s my sincere take re this terribly important matter, 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:

Wade Pfau agrees with Greaney.  Robert Shiller agrees with Greaney.  Your wife agrees with Greaney.

Greaney himself doesn’t agree with Greaney. His behavior reveals a lack of confidence.

If Buy-and-Holders believed deep in their hearts in bull market prices, prices wouidn’t crash. A price crash is just a confidence crash. It comes when the Buy-and-Holders can no longer successfully persuade themselves that irrational exuberance is real.

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:

What you fail to understand is that the top 10% are consolidating the ownership of stock and other assets. This is limiting the “supply” to those outside the top 10%. Ever play the game Monopoly? What happens to the bottom 90% of people when they own only a small percentage of the properties on the board? You have to decide if you are going to be an “owner” or a “consumer”. The top 10% have enough assets to ride out the ups and downs. In the end, they will win because they can keep buying assets, priced high or low. They are playing the long game. People with little to no assets can’t afford to play the game. They are just trying to survive.

It’s an increased desire to buy that sends prices up. This is why market timing is so essential. When prices are insanely high, market timing pulls them back down to reasonable levels. When prices are too low, market timing pulls them up to reasonable levels. Market timing is the thing that permits the market to do its core job — get prices right. It is market timing that keeps the market functional. We would never have a CAPE value like the one that applies today if we all stressed the importance of market timing.

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:

Many years ago, you were asked about when a crash would occur. Eventually, you said that if a crash did not happen by 2015, we should question timing and VII. It never occurred. Now we are 8 years after that point and it still hasn’t happened. This just illustrates the problem with market timing. While waiting around for a crash, the market timer watches their portfolio erode and then they have nothing left when they expect to benefit from a new cycle.

To the opposite, we have seen that the market ALWAYS returns after EVERY drop and goes on to new highs.

We are in 100 percent agreement that the market always returns after every drop and goes on to new highs, Anonymous. I don’t think that that justifies failing to engage in market timing/price discipline because you need to engage in market timing/price discipline to keep your risk profile constant as valuations change in a world in which valuations affect long-term returns (the world we live in, according to Robert Shiller’s Nobel-prize-winning research). But I certainly believe in your core point and I think it is an important point. This point is part of the reason why I do not advocate extreme allocation decisions (I say that investors should maintain a 30 percent stock allocation even when stock prices rise to crazy, scary highs, like what we see today).

The Bennett/Pfau research shows that this idea that engaging in price discipline will cause an investor’s portfolio value to erode over time is just a Buy-and-Hold myth. Wade Pfau and I looked at the history of stock price movements going back to 1870 and it has never yet happened. Market timing has always proven to be far superior to Buy-and-Hold over the long term. The evidence is so strong that Wade (who holds a Ph.D. in Economics) was amazed at what our research found. He told me that he kept asking himself: “Am I doing something wrong?” But, no, he wasn’t doing anything wrong. It was the people who came up with Buy-and-Hold who did something wrong by failing to distinguish short-term timing (which really doesn’t work) from long-term timing (which is really just price discipline and which thus of course always works and is always 100 percent required for investors who want to keep their risk profile stable over time).

Investors who are worried that they may “miss out” on some gains in the event that it takes longer for an overpriced market to crash than it ever has in the past can of course follow a Buy-and-Hold strategy if that sounds like a good idea to them. I have never objected to that and I have never heard any other Valuation-Informed Indexers object to that. What I object strongly to is the ban on honest posting re the last 41 years of peer-reviewed research, which means that investors do not get to hear both sides of the story when making their allocation decisions.

The ban on honest posting is a national scandal, in my personal assessment, the worst case of financial fraud in our nation’s history. It is proper that you decide on your own allocation. It is not even a tiny bit proper that you determine the allocation decisions of millions of others by engaging in absusive and in some cases criminal behavior to block them from learning what they need to learn to make informed decisions of their own. That makes you responible for the losses of millions of people (I am presuming here that stocks may continue in the future to perform something along the lines of how they have always performed in the past) and the collective losses are likely to be in the many trillions of dollars, far more than you Goons will be able to cover. Which means that the United States will be facing not just an economic crisis but a political crises as well. Not good.

My best and warmest wishes to you and yours, in any event.

Rob