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 spent the last 20+ years telling everyone else as to how you think you are right and everyone else is wrong and that the world needs to change.  In the end, nothing will change for you.

You have spent the last 40 years living in denial as to what the peer-reviewed research tells us all about how stock investing works in the real world and insisting that as a society we must never, never, never acknowledge that we once made a mistake in thinking that market timing is not always 100 percent required. In the end, we will acknowledge as a society that Robert Shiller’s Nobel-prize-winning research is legitimate research.

We all should be doing everything in our power to see that every site on the internet is opened to honest posting so that we all can begin enjoying an amazing learning experience. That’s my sincere take, 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:

Can you explain why you make allegations of criminal acts, yet refuse to provide proof that they even exist?

Can you explain why Greaney has not corrected an error in his retirement study that was brought to his attention 19 years ago?

The two things are the same thing. Greaney doesn’t want to correct the error. So he was left with no alternative but to engage in criminal acts to suppress discussion of it. The criminal acts obviously do not serve their purpose if they are acknowledged. So discussion of the criminal acts too is suppressed.

The root question is — Why do so many people (experts and ordinary investors alike) let him get away with it? The answer is — because they do not want to know the truth about how stock investing works. Buy-and-Hold/Get Rich Quick is a fantasy. Investors work together to create phony wealth (irrational exuberance). They sense on some level of consciousness that permitting discussion of the scam will cause it to unravel. So they insist that those who talk about these matters pretend that there is some reason to believe that market timing (price discipline!) is not required. Those who claim otherwise are disappeared.

But sooner or later the irrational exuberance disappears anyway. That is what Shiller’s Nobel-prize-winning research shows. So this suppression of honest posting business is a temporary strategy. It won’t work forever. When it fails, then what?

We will have the choice as a people to educate ourselves re the first true research-based investment strategy (Valuation-Informed Indexing, which is Buy-and-Hold without the no-market-timing business). We can move forward or we can refuse to move forward and suffer the consequences, which according to Shiller’s research will be severe. I of course vote for moving forward.

If that is the choice that we make as a society, we will be able to talk about all aspects of the question at that time — safe withdrawal rates, market timing, allocation percentages, risk management, and yes, the death threats and other criminal acts that helped us to remain in the dark when we so desperately wanted help in doing that. My job is to tell the story in a balanced and clear and complete way. I intend to give it my best shot.

If you want to know why nothing has been done about the death threats, ask yourself why nothing has been done about the error in Greaney’s retirement study. That’s the story that matters. If we cannot get errors in retirement studies corrected, we are in a fix. And it has been 19 years now. I still say to this day that Greaney’s study lacks an adjustment for the valuation level that applies on the day the retirement begins.

I believe that as a society we are in the process of working up the courage to hear the truth about how stock investing works. I believe that we are going to make it to the other side. Not until after the next price crash. But I believe that we will then make it. But then I would, wouldn’t I?

My best and warmest wishes you you and yours, my dear Goon friend.

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:

Anyone selling as you described is market timing. Show me the link to posts by Taylor indicating he sold off in the crash.

As for Bernie, he was not buying stocks, just like you.

The thing that is consistent about Buy-and-Holders is that they always do the emotional thing. When prices are insanely high, they insist that they will never sell. When prices fall, they say that anyone who continues to hold stocks is nuts. We know that they sell because the CAPE always drops to 8 at the end of a bull/bear cycle. That couldn’t happen unless the people who were bragging about their great results following Buy-and-Hold didn’t sell after they saw that it had failed.

It’s a question of reason vs. emotion. Buy-and-Holders hate the peer-reviewed research because the research supports the reason-based approach (practicing price discipline!) and letting reason become a factor makes it very hard to continue following a purely emotional approach (no market timing!).

It’s reason and research for me. Call me madcap.

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 saw people begin to question Buy-and-Hold in a serious way in the days when the CAPE had dropped to 13. There were people at the Bogleheads Forum flat-out calling Taylor Larimore a liar. That was unimaginable in the days before the crash.”

Those are market timers. We can just look at history and see that Buy and Holders have done extremely well as the held their stock and continues to buy.

These were ardent Buy-and-Holders before prices fell.

Are you saying that Taylor Larimore is a market timer? Before prices fell, he said that he would never sell. Then after prices fell he said that he needed to reconsider. Get Rich Quick strategies are not nearly as appealing after the pretend money disappear.

Check with the people who bought into the Bernie Madoff fund. They said that their strategy performed “extremely well” too before his fraud was exposed.

This is the benefit of looking at peer-reviewed research. Research takes you out of the emotion of the moment and helps you to focus on what works best in the long term.

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:

<em>“If the CAPE drops to 8, as it has by the end of earlier bear markets”

And if disco comes back, my Donna Summer records will be worth a fortune.

Why do you hang your entire existence on CAPE, but completely ignore Excess CAPE Yield, which says stocks are currently a better deal than bonds.

Shiller has positioned himself so he can claim to be right no matter what happens. People see right through such duplicity. A book on Shiller will never sell, even if it finally gets written (doubtful) and published (impossible).</em>

I don’t quite follow what you are getting at when you say that Shiller has positioned himself to be right no matter what happens. My guess is that you are unhappy that he has not said when the crash will come. So, if crashes arrive randomly, we will sooner or later see one and he will be able to claim “credit” for it. If Shiller is right about how the stock market works, then that’s just the way things are. If stock prices are determined by shifts in investor emotion, how could anyone say when a crash will come? Emotions are by definition irrational and thus unpredictable. No one can predict when emotions will shift. So no one can predict when a crash will come. It’s just not possible.

The mistake that the Buy-and-Holders make is in thinking that, since we cannot predict when a crash will come, we cannot effectively assess when the risk of a crash is greater. When an alcoholic drives home from a bar, the odds are that he will not get into an accident. There are probably alcoholics who have driven drunk ten times in a row without incident. Does it follow that drunk driving is safe? It does not. The odds of getting in an accident might go from one in a thousand for a sober driver to one in ten for a drunk driver. So driving drunk is insanely risky. It’s the same with going with a high stock allocation at times of crazy high CAPE values. You can do that numerous times and suffer no negative consequences. But then you can lose 75 percent of your life savings in a crash and that will set you back in a big way for the remainder of your lifetime. You would have been better off to assess how much extra risk you were taking on when the CAPE value went to crazy places and to have worked to keep your risk profile constant over time (which would require market timing).

Your comment about Donna Summers records suggest that you see a CAPE level of 8 as something that comes in and out of fashion. Economic crises are not something outside of us that just happen now and again. We CAUSE economic crises with our love of Get Rich Quick/Buy-and-Hold investment strategies. The market is going to get the price right sooner or later. That’s what markets do. There is no getting around it. The natural thing to do is to adjust our stock allocation in response to price changes to keep our risk profile constant. When we refuse to do that (which is what the Buy-and-Holders advise), we make the market dysfunctional. When it can find no other way to get prices down, it eventually crashes them. That causes a massive loss of consumer buying power, which causes an economic contraction. All these things are connected. They are inevitable in a world in which open discussion of the last 40 years of peer-reviewed research is prohibited.

Lucky for us, they are NOT inevitable in a world in which honest posting is permitted. Permit honest posting and all the bad stuff about stock investing goes away. The crazy ups and downs in prices are OPTIONAL. In a functioning market, there would be small ups and downs as the market tested various price levels. But none of the crazy stuff. Because the market would possess the ability to ADJUST when investor emotion got too out of hand. Buy-and-Hold takes away that ability to adjust. Which produces pleasant results in the short term. And then terrifying results in the long term. It is not a coincidence that things have always gone like that. It is a logical impossibility that things could ever play out any other way.

The wonderful thing is that the last 40 years of peer-reviewed research teaches us for the first time how the stock market really works. Knowing that, we can all live richer and better lives than we ever imagined possible at earlier times. But to reap the benefits of our good fortune we need to permit honest posting. Which most of us have always wanted! You Goons are only 10 percent of the population. The vast majority of us are Buy-and-Holders. You have that working for you. But the vast majority of us support the laws against death threats and extortion and so on. Our sympathies for Get Rich Quick investment strategies have kept you Goons in business for 19 years now. But, when prices drop below fair-value levels, there is no more Get Rich Quick element at work. At that point, I believe that the sympathies will change and the majority will favor the enforcement of U.S. laws in discussions of investing. That will change everything in short order.

I hang my hat on Shiller’s model for understanding how stock investing works. The difference between the two models is that Shiller’s model posits that investors are highly emotional while Buy-and-Hold posits that investors are 100 percent rational and act in pursuit of their self-interest. Everything else follows from that. It is true that the relative appeal of stocks increases when interest rates are low. But, if we just permitted honest posting, stock prices would never get so high that we would need to lower interest rates to such a crazy extent to keep the stock market afloat. The way to deal with the craziness of today’s stock prices is not to spread the craziness to other markets. It is to permit honest posting and thereby empower investors to rein in their irrationality.

That’s my sincere take, 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:

“The job affects me and my family. The book affects millions and millions of people.”

Wrong. The difference is that a job would be in the real world. The book is imaginary. You always choose imaginary over real world, because the real world is cold and mean and requires effort. It doesn’t fit in with your selfish hedonistic philosophy.

I view Get Rich Quick strategies as imaginary.

The reason why I prefer research-based strategies is that research helps us to appreciate reality and thereby to keep our imaginations in check.

The CAPE today is 37. That means that roughly 60 percent of the value of your stock portfolio is nothing more than irrational exuberance, stuff of no real and lasting value.

The way we fight irrational exuberance is through market timing. That’s why I am such a big advocate 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:

I haven’t seen honest posting banned anywhere else but here.  Perhaps you can give us examples of what you are talking about.

Every comment you put forward illustrate the problem. Not every comment you put forward contains a death threat. Some do, some don’t. But every comment contains a hostile tone. That is the issue.

If Buy-and-Hold were a real thing, Buy-and-Holders would not be hostile to the idea of hearing challenges to their beliefs about how stock investing works. The hostility shows that Shiller was right — investing is not a 100 percent rational endeavor but a highly emotional endeavor.

That changes everything. Absolutely everything.

One thing that it changes is that, in a world in which investors are highly emotional, the safe withdrawal rate is not a single number but a number that changes from time to time depending on how emotional investors are at the various times. Shiller gave us the tool (CAPE) that permits us to distinguish the highly emotional times from the less emotional times. And of course identifying the risky times helps us to reduce risk. Once we know that it is there, we can tell people about it and people can then do something about it and then it is not there (at least not as much) anymore.

The job of an investment adviser is to help people cope with stock investing rusk. One does that through market timing. Market timing lowers risk by not permitting irrational exuberance to get out of control. Buy-and-Hold pushes risk to the highest possible level by encouraging investors to ignore it.

Your hostility is the story, Anonymous. The biggest reason why you don’t see people posting here, even anonymously, is that it embarrasses people to confront you re your emotional approach to stock investing. When people point out how emotional you are, they are not just saying something negative about you. They are saying something negative about all human beings. You did not personally pull the CAPE value into the 30s. We ALL did that as a people. When I say that today’s CAPE value is insane, I am saying that the humans are insane. And they are. Those same humans drink themselves to death and gamble themselves into poverty and racism themselves into deep social conflicts. And on and on.

But all is not lost! Those same humans also go to AA and overcome their drinking problems and make Shiller’s book a best-seller and award him a Nobel prize and express a desire on discussion boards that Rob Bennett be permitted to post honestly. We humans are screwed up and wonderful, both at the same time.

I think that we are going to pull together and overcome your hostility once we see how much human misery we end up causing with our screwed-up-ness. That’s what I sincerely believe. But we are just going to have to be a bit patient in letting things play out before us to find out for sure.

Grrrr….

My best wishes to you, dear Goon friend.

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:

Why should you dictate the price of stock?  Price is always determined by what someone is willing to pay.

If honest posting re the last 40 years of peer-reviewed research is permitted, that is going to change what people are willing to pay. People want to act in their self-interest. Permit them access to the information they need to do so and you are going to see a change in prices. It is not me dictating the price. It is investors doing so.

Doing something about fraud would help us all. Whoever would have thought 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:

Other than JWR, why hasn’t there been just one person that has said that they believe the death threats, job threats, extortion, etc or even has come out to say they support your VII strategy and use it for their own portfolio, or say they agree with your interpretation of what Schiller says?

Are they all afraid of those mystical goons, despite being able to post anonymously?

There have been thousands who have expressed a desire that honest posting be permitted. There have been hundreds who have said they see merit in Valuation-Informed Indexing. Some very effusively so. I have had numerous people tell me that they view me as the first person who has ever spoken about stock investing in a way that makes complete sense.

The intimidation stuff is very scary to people. There was a day when women were not permitted to vote. Why didn’t everybody speak up? Some genuinely supported the policy. But lots and lots of people were just afraid to speak up about something that was so deeply embedded into our way of life. Buy-and-Hold is deeply embedded into our understanding of how stock investing works. If we opened every site to honest posting on the last 40 years of research tomorrow morning, that would cause a massive price crash and an economic crisis. Would you want to be responsible for that?

People are intimidated by the social pressure to pretend that Get Rich Quick/Buy-and-Hold is just fine. The other side of the story, of course, is that, the longer the cover-up continues, the harder things will be for all of us when it finally is brought to a close, as it must be if our economic system is going to remain in place. So I vote for permitting honest posting. But lots of good and smart people have a hard time standing up to you Goons, given the circumstances that apply.

Had Shiller’s research come 20 years sooner, there never would have been any controversy. Had we known how stock investing worked before Buy-and-Hold came along, no one would have ever taken the idea seriously. But that’s not the way things played out. So we have to do things in his unfortunate, mixed-up way instead.

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 everyone has all the information at their fingertips, why do we even have academic researchers? ”

They are not researchers. Research is making discoveries. What they are doing is analytics. This is why you have such a large disconnect.

Shiller made a discovery. He discovered that the market is not efficient, that valuations affect long-term returns, that risk is variable and that market timing is required. That’s huge. That changes the analysis of every strategic question that comes up in stock investing.

If you don’t get the question of whether market timing is required or not right, you can’t get anything right. That one is fundamental.

Rob