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 measure the truth through results. How much do you have that you can spend, Rob? I have been spending because of my saving and investing strategy. Despite buying a house, car, etc., my net worth keeps growing significantly.

Spare us your silly talking points. Show us results.

You can see the results of regular promotion of Buy-and-Hold by running a Google search for “Shiller CAPE.” That CAPE value will become a logical impossibility once we open every internet site to honest posting re the last 44 years of peer-reviewed research in this field.

The arc of history bends toward rationality in stock investing. We are close. Or so this Rob Bennett individual sincerely believes, you know?

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:

I am looking to purchase a Rolex Datejust 41mm watch with certain style of bracelet and bezel. The MSRP is under $11k if you buy it from an Authorized Dealer. There is limited supply so you can’t just walk in a pick one up right now. Instead, you would have go out to the open market. Certain dials will cost you close to $16k if you want to buy one now. Prices for many Rolex watches have appreciated over the years, but you can’t also see scenarios with some declines that can happen when financial markets are soft.

So, if anyone is trying to determine the value of the watch (much like the value of a stock) how do we determine that value? We just look at what the market price is at that time. Anyone can make up claims telling you that it will be higher or lower in the future. Long term data shows that the value will continue to increase in future years, but Rob Bennett’s of the watch world will tell you that you will go broke with your Rolex watch.

We agree that the way to determine value is to see how the market values the thing. The problem in the stock market is that honest posting re the last 44 years of peer-reviewed research is banned at every internet site. Without access to discussions of what the peer-reviewed research says, the market is not able to function properly. In ordinary circumstances, participants in a market act in their best interests. It’s obviously not possible for stock investors to do this for so long as honest posting is prohibited at all sites,

This is one of the reasons why I am always says that we need to open every site to honest posting re the research. Once we do that, we obviously will no longer need to suffer with a CAPE value of 35

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 can spend my $7.5 million right now and that is its value.  How much can you spend right now of your $500 million windfall?

Do you believe that irrational exuberance exists? Do you believe that Shiller’s research is legitimate? Do you believe that Shiller got it wrong?

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 already agreed that the value is what my account balance says because I can spend it today.

You could spend the full stated value of your portfolio if you elected to cash it in. It doesn’t follow that that is the correct value. To identify the correct value, you need to adjust the stated value for the effect of irrational exuberance.

We learned something important in 1981. That’s why Shiller was awarded a Nobel prize. You cannot just identify the value of your portfolio in the same manner as you would have in 1980 — by looking at the value listed on your portfolio statement.

I would like to see adjusted numbers appear on portfolio statements as well as the stated numbers. That would be a hugely positive reform. Ask yourself — how do we get there? We don’t get there by not talking about the subject, by pretending that Shiller did not do anything of consequence. He did something of great consequence. He showed that shifts in investor emotion — a factor not considered in the calculation of the number that appears on the portfolio statement — affects the real, lasting value of the portfolio. I believe that there will be a time when the accurate number is printed on the portfolio statement below the inaccurate one. To get there, we need to begin talking about what it is so important that that be done. We need to open every site to honest posting re the new peer-reviewed research.

There was a time when we did not know that smoking causes lung cancer. Now there are. Do you think it would have been a good response to claims that smoking causes cancer to say “there are no warnings about cancer on cigarette packages, surely there would be warnings if that really were so.” There’s a step between knowing something and taking the appropriate action in response to that knowledge. We know today that valuations affect long-term returns. But we have not yet taken the appropriate step of doing everything in our power to persuade people always to practice valuation-based market timing in an effort to keep irrational exuberance from getting out of control. To get to the point where we take that step, we need to let the knowledge in, we need to talk about it everywhere we talk about stock investing.

Not talking about the new knowledge doesn’t make it go away to. Not talking about it –pretending that we live in the world that existed in 1980 — is fraud. We don’t live in the world of 1980. The last 44 years of peer-reviewed research exists. No, that research is not reflected in the numbers that appear on our portfolio statements. That’s unfortunate. That’s bad. That’s something that we all should want to change.

Once adjusted numbers appear on portfolio statements below the official numbers, the gap between the adjusted numbers and the official numbers will diminish. At some point, we may defeat the cancer of irrational exuberance altogether. We get there step by step. The first critical was having research published showing that valuations affect long-term returns. The second critical step is opening every site in the internet to honest posting re the peer-reviewed research. Shiller’s research was of huge importance. But we have not obtained the benefits of that research as of today because as a nation of people we have not get given ourselves permission to talk about the far-reaching how-to implications of that research.

The stated value of your portfolio is not its real value. Irrational Exuberance is included in the stated value but is not real. That’s the entire point of Shiller’s research. That’s what it means to say that valuations affect long-term returns.,

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 somehow think you are getting greater stability outside of stocks when you look at CAPE?  Really? Are you familiar with the impact of interest rate changes, inflation, etc?

Valuations affect the result. So valuations need to be considered.

The only possible reason for ignoring valuations is that you want to persuade yourself that irrational exuberance gains are real. Which is a self-deception. Not this boy, 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:

The investment community kicked you out. Wade Pfau stopped talking to you. The Bogleheads never let you in. Your wife divorced you.
You still think the problem is everyone else and not you.

The problem is human nature. We all have a Get Rich Quick/Buy-and-Hold urge. The job of investment experts is to help us overcome that urge, to engage in valuation-based market timing to the extent needed to keep irrational exuberance under control. There was a time when we didn’t know how stock investing worked and some people thought that Buy-and-Hold might be okay. Now we have 44 years of peer-reviewed research showing us otherwise. But of course we can’t get to the place where we all deep in our hearts want to be without the Buy-and-Holders learning how to pronounce the words “I” and “Was” and “Wrong.”

We are close. I think we are going to get there. If there had never been any abusive posting or any criminal behavior, we would have gotten to where we need to go many years ago. People who work in this field are like people who work in any other field — they want their work to help people. I say that we should let them. We will all be living better and richer and fuller and freer lives once we do.

I sincerely believe that the Greaney retirement study lacks a valuation adjustment. I believe that more strongly today than I did on the morning of May 13, 2002.

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:

So you finally admit the truth in that the current balance is the current worth.  As for your speculation on the future, you have been wrong with every prediction.  Further, you have no idea as to what investments anyone has in their accounts, so no one, including you, can weigh in on the estimated future value of anyone’s portfolio.

The current balance is the current worth. But the stability of that value is determined by the valuation level. To act as if valuations do no matter is foolish and dangerous. Valuations affect long-term returns. There is 44 years of peer-reviewed research showing that.

There is no evidence that it is possible to make precise predictions of future returns. But there is a mountain of evidence that the riskiness (the potential for big price drops) is affected dramatically by changes in valuations. So it would be insane to put together a retirement plan without taking valuations into consideration. The valuation level that applies on the day a retirement begins is the most important factor that determines whether that retirement will survive or not.

The future value of a portfolio cannot be determined with precision by looking at valuations. But a range of possibilities can be determined and rough probabilities can be assigned to the points on the range of possibilities.

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:

It is just one big conspiracy.  The world plotted to make you broke, divorced and a cast out.

Is ignorance of the realities of the world a conspiracy? Was it a conspiracy when we didn’t know that smoking causes cancer and we failed to warn people of its dangers? Was it a conspiracy when doctors used to bleed patients and were actually hurting them rather than helping them? Was it a conspiracy when we didn’t appreciate the risks of using pesticides and overused them.

Shiller’s research wasn’t available when Buy-and-Hold was being developed in the 1960s. So the people who developed it had to take a wild shot in the dark on the question of market timing. It shouldn’t be too surprising that they got it wrong. Fortunately, we learned the realities in 1981, when Shiller published his Nobel-prize-winning research. Unfortunately, a lot of the people who were promoting Buy-and-Hold felt funny about acknowledging that they were every bit as capable of making a mistake as all the other humans.

So here we are. We now know the realities. We all can begin living better and richer and fuller and freer lives than we ever imagined possible in the Buy-and-Hold Era. The price of admission to this amazing new world is learning how to pronounce the words “I” and “Was’ and “Wrong.” I say that we should go for it. I am not able to imagine any possible downside.

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:

I read the book.  It never says to time the market with CAPE.  It never mentions you.  Shiller, Pfau and Greaney disagree with you.  You are broke, they are not.

The title of the book is “Irrational Exuberance.”That tells you what you need to 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:

I think the dangers of market timing need to be discussed on every board and every thread, every single day. I think the dangers of being broke in your 60’s need to be discussed on every board and every single tread, every single day.

There are no dangers to valuation-based market timing so long as it is practiced in a reasonable way. Saying that there are dangers to engaging in price discipline when buying something is absurd. The vast majority of people practice price discipline with everything they buy other than stocks. Wade Pfau devoted 16 months of his life trying to locate some peer-reviewed research supporting the Buy-and-Hold claim that there might be an alternative universe in which everything works the opposite of how it has always worked here on good old Planet Earth and he came up empty-handed, The response of the Lindauerheads and Greaney Goons was to threaten to destroy his career if he continued doing honest work in this field. Gee, I wonder what’s going on here?

My best wishes.

Rob