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 need to reflect on what the last 36 years of peer-reviewed research in this field is telling us, Anonymous.”

What research, other than writings by Shiller and Pfau, have you included in your exhaustive review? Who are the”peers” that have provide review and responses to the research you have referenced?

One of you Goons asked this question about two months ago and I responded with a long and detailed answer. I am not going to repeat those words here. If you want to tap into that one, I think you could find it by going through the somewhat recent blog entries.

The short answer is that there is a mountain of stuff. Shiller. Pfau. Russell. Arnott. Smithers. Bernstein. Kitces. And on and on and on and on and on. There’s no shortage of material.

The most important research that has been done is the two months in which Pfau went searching through the literature to determine how many studies there are showing that it is not necessary to exercise price discipline (long-term timing) when buying stocks. He found that there are zero. He was amazed to discover this. He spent years acquiring his Ph.D. and no one had ever told him this. He had heard thousands of times that “timing doesn’t work” and so he assumed that there must be a lot of research showing this. In fact, there is precisely zero research showing this. The claim that timing doesn’t work is 100 percent myth. There is no “there” there.

That’s the story, Anonymous. Given that there is precisely zero support for the key Buy-and-Hold claim, we should all be spending our energies trying to determine how stock investing really does work. If we did that, we would look to that mountain of research showing that the key is to always, always, always practice price discipline (long-term timing). The only reason why we are not all doing that today is that millions of us have a huge emotional investment in Buy-and-Hold. Either we have built out careers around it or we have written books promoting it or we have invested our life savings pursuant to its dictates or we have persuaded our friends that it is the way to go or whatever. We have not been engaged in an intellectual battle over the past 15 years, we have been engaged in a turf fight.

Buy-and-Hold was a MISTAKE. The idea that it is not necessary to practice price discipline was a MISTAKE. Instead of asking me what research supports Valuation-Informed Indexing, you should be asking me what research supports Buy-and-Hold. 100 percent of the research available to us supports Valuation-Informed Indexing. 0 percent of the research available to us supports Buy-and-Hold. This is why things get so nasty on your end. It’s hard to participate in an intellectual debate when you have no ammunition.

The core Buy-and-Hold claim is that timing doesn’t work. It’s that’s not so, the entire thing falls. Buy-and-Hold is a numbers-based system and, if timing works, all of the numbers it generates are wrong. Huh? What good is a numbers-based system that gets all the numbers wrong? A numbers-based system that gets all the numbers wrong is DANGEROUS.

The Buy-and-Holders were sincere when they developed their strategy. They truly believed that timing doesn’t work. They just didn’t have available to them at the time the tools they needed to determine the realities. There were no index funds in 1965. So there was no way to test whether long-term timing works or not. So Fama only tested short-term timing. Short-term timing really does not work. But he concluded falsely that timing in general doesn’t work. Had he been able to test both forms of timing, he would have concluded that “short-term timing doesn’t work but long-term timing always works.”

Shiller was the first to test long-term timing. He changed our understanding of how stock investing works in a fundamental way by showing that long-term timing always works. Research that doesn’t take his findings into consideration just doesn’t count anymore.

If some physicist came out with a study that was rooted in a belief that the earth is flat, reasonable people would just ignore it because it fails to take into account many years of research. That’s what we have with the Buy-and-Hold retirement studies. They are rooted in beliefs that people held prior to 1981. Yes, there are still smart and good people who hold those beliefs today but those people are not proceeding in a scientific manner. To proceed in a scientific manner, you need to take into consideration all the research available to you and there is now 36 years of peer-reviewed research showing that long-term timing always works and 0 years or research showing that there ever might be some alternate universe where it might not.

The short answer is — ALL of the research available to us supports Valuation-Informed Indexing and none of the research available to us supports Buy-and-Hold.

Now we just need to get prison terms announced for you Goons so that all of us who have expressed a desire to engage in civil and reasoned discussions about what the peer-reviewed research in this field really teaches us about how stock investing works can get down to the business of helping each other overcome any remaining thoughts that Buy-and-Hold (AKA/Get Rich Quick!) might be the answer.

I hope that helps a small bit, my long-term Buy-and-Hold 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:

“It’s true that math isn’t my thing. And it’s true that the math supports what I say 100 percent.”

Your understanding of the math begins and ends with “yup, that’s a dang high PE10.” Since that’s the only thing you understand, you stubbornly insist that that’s the only thing that matters.

But if it mattered that much, why isn’t the second highest PE10 in history enough to get Shiller to even issue a warning? (Today. Not in 1996.)

The obvious answer (to everyone but you) is that it doesn’t matter that much. Shiller has learned that the market isn’t that simple, so he moved on. Moving on is even less your thing than math.

It’s not that the P/E10 is high that concerns me so much. I 100 percent accept that you can have have a very high P/E10 number and not see an immediate crash, that you can even see 30 percent or 40 percent or 50 percent annual gains starting from a high P/E10 number. That’s not my focus.

My focus is what Shiller’s 1981 finding tells us about how the market sets prices. If the market is efficient, as people believed it to be in the days when Buy-and-Hold was being created, then prices are set through a rational process. It is unforeseen economic developments that cause prices to rise or fall. If that is so, then Buy-and-Hold is the ideal strategy. If that were so, I wouldn’t care what the P/E10 was, I would just follow a Buy-and-Hold strategy.

What Shiller did that was so important was to test this core Buy-and-Hold belief. Is it really unforeseen economic developments causing prices to rise and fall? That was never proven, it was an assumption. The thing that you do in science is that you test things. Is there a way to test that assumption?

There is. Shiller was the first person to test the assumption. If the assumption is correct, prices should fall out in the pattern of a random walk. There’s no pattern that should apply with unforeseen economic developments, sometimes they are going to take prices up and sometimes they are going to take prices down. This is why Fama was awarded a Nobel prize. He seemed for a time to have proven that the assumption is correct. He showed in his research that stock prices do indeed play out in the form of a random walk in the short term (up to 10 years).

Fama didn’t even think to test whether prices play out in the form of a random walk in the long term. Long-term timing was not a practical option in the day when Fama did his research. Long-term timing only works with index funds and index funds did not exist in the 1960s, when Fama did his most important work. Bogle formed Vanguard in the mid-1970s. Then Shiller became the first researcher to test long-term timing in 1981.

He found that it always worked. He found that market prices do NOT play out in the form of a random walk. He found that the core assumption on which our understanding of how investing works was in error.

If it is not unforeseen economic developments that cause stock price changes, what is it? It is investor emotion. That is the theory that Shiller puts forward and it is the only one that I have heard that makes sense and that is consistent with the peer-reviewed research of the past 36 years. That changes everything. That is a “revolutionary” finding. That finding merits a Nobel prize.

Not because we know now that a P/E10 of 30 means that a crash is coming next week or next month or next year. We don’t know that. Shiller didn’t show that. That’s not the point.

The importance of Shiller’s research is that it shows us that stock price changes are caused by shifts in investor emotion, not by unforeseen economic developments. We cannot say that there is going to be a crash soon just because the P/E10 is 30 because emotional investors might just ignore the high P/E10 level and push prices up to 35 or 40 or 45. Shiller didn’t give us information that helps us to predict short-term price changes.

What he did was to give up information that tells us that some stock price changes are rooted in real economic stuff and some are rooted in ephemeral emotions. Prices are caused by shifts in investor emotion. They follow a clearly defined pattern that has remained in place since the first day that stocks were offered for sale. The primary driver is the Get Rich Quick emotion. So the P/E10 level gradually increases over time. First it is 8, then a few years later it is 12, then a few years later it is 17, then a few years later it is 21 and then a few years later it is 26 and so on. The secondary driver is the Common Sense emotion. The Common Sense emotion causes people to feel fear over the long-term value of their emotion-generated returns. The Common Sense emotion causes prices to crash back to 8 so that the gradual-upward-movement part of the long-term pattern can reassert itself. The market always brings overpriced stocks back to fair-value levels or lower. There has never once been an exception.

Today’s P/E10 level is insane. But we cannot say that we are going to see a crash next week or next month or next year. Next year’s P/E10 level could be even more insane that this year’s P/E10 level. We just don’t know.

What we DO know is that stocks are a lot more risky today than they were the last time they were selling at reasonable prices. The more emotion there is present in the price at which stocks are selling, the more pressure there is for sharp downward movements in prices. The more risky stocks are, the less your stock allocation should be if you are seeking to maintain a steady risk profile. Stocks are insanely risky today. Prices might go higher. Then they would be even MORE insanely risky.

The question is — Do you want to gamble that prices will continue moving upward from these insanely risky levels? I do not want to gamble. I don’t care if prices double from where they are today before crashing back to a P/E10 level of 8. I am a long-term investor who does not believe that it is possible to engage in short-term timing successfully. So I don’t believe that I will know when to get out to avoid the crash that is inevitably going to come. So the only way to diminish the effect of the crash is to lower my stock allocation not when I think that the crash is about to arrive but when risk gets so high that stocks no longer represent a strong long-term value proposition.

It doesn’t make much difference to a long-term investor whether stocks crash next week or double in price from here and then crash a few years from now. The investor loses all his phony gains in any event. So why spend so much mental energy trying to figure out when the crash is coming? I don’t think it can be done. I just try to keep my risk profile roughly stable. If I do that, I am covered in all possible circumstances.

I think you are focused on the wrong thing, Anonymous. You don’t want to “miss out” on temporary gains. I focus on whether the gains are permanent or temporary. I don’t fret about temporary gains one way or the other. I just don’t care. I naturally don’t want to miss out on permanent gains. That’s where I direct my attention. I focus on distinguishing temporary from permanent gains.

Gains that are supported by the economic realities are permanent. There has never in the history of the market been a time when those went away. Yes, the market price can do down below fair value just as it can rise above fair value. But it always comes back when it does. That’s the beauty of it. If you focus on the real value of your portfolio, you always know where you stand and you always know what direction prices are moving in the long term. It makes financial planning about 50 times easier than it is when you are pretending that it is unforeseen economic developments driving prices rather than the crazy emotions of human investors.

What I learned from Shiller is that high prices are caused by investor emotion. That tells me to go easy on stocks when investor emotion gets too out of hand.

Shiller hasn’t “moved on.” If the Buy-and-Holders would drop the criminally abusive behavior, he would be 100 percent happy to talk these things over with you and to tell you everything he believes in a calm and clear and detailed way. There are some things he doesn’t know. He would learn those things over time by talking things over with you and with lots and lots of others. He is not able to do that today because you do nuts when anyone even suggests that the Buy-and-Holders might have made a mistake in earlier days and then failed to correct it for the 36 years since it came to light.

When the behavior of the Buy-and-Holders changes, our knowledge of how stock investing works will advance by leaps and bounds. We have 36 years of peer-reviewed research that we have not permitted ourselves to explore. That will change following the next price crash. We will explore the many far-reaching implications of Shiller’s research in days to come. I of course wish that we had begun those explorations back in 1981. We would have prevented a mountain of human misery by playing it that way. But the full reality s that the good news here is 50 times more good than the bad news here is bad. So we will just have to take the good with the bad and “move on,” to quote a phrase.

My best wishes.

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:

Of course, you are welcome to show proof otherwise.

All I’ve got to give you is 36 years of peer-reviewed research, based on 147 years of historical return data.

If that’s not enough for you, nothing could ever be enough for you.

There were people who questioned the Madoff fund in the days before Madoff was sent to prison. Those who were invested in the fund told them to just look at the results for the fund. They were amazing.

It’s not for me, Anonymous. But I do wish you the best of luck with it

It will be interesting to see how things play out.

Rob

 

Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

Funny how you talk about your “friend”. On your website, you talk about the “thousands” with failed retirements, yet can’t link to one single person. You just make up imaginary people. At the same time, you have been given many links to successful buy and hold outcomes, yet you ignore those. Further, as pointed out thus week, yet again, there has never been a 30 year period in which a 4% withdrawal rate has never worked. That fact alone blows away makes your endless diatribes meaningless. Lastly, your the one sitting here with the failed retirement plan, yet you want to lecture everyone else.

You need to stop attacking everyone else. We are not your problem. You are.

There are thousands of people who have spoken over the course of the past 15 years in support of my right to post honestly re safe withdrawal rates and scores of other critically important investment-related topics. All of their comments are documented at my web site. I have a slider at the top of every page of the site that runs over 200 of these comments, some from a number of the biggest names in the field. I’ve never been in the majority. I am very much in the minority — about 10 percent of the population today believes that valuations affect long-term returns. But I have never had a problem generating support for my work. About 10 percent of every board population offers the most effusive praise for my work that I have ever seen offered for anyone’s work. It is an extremely gratifying and humbling experience to hear the sorts of positive things that many people have said about the work that I have done over the past 15 years.

But it is true that those people stop speaking once they see the reaction of many Buy-and-Holders to their words of praise. People don’t expect to see that sort of behavior in our society. People have lived long lives and never seen that sort of behavior before and it shocks them and they silence themselves in response. One of the best illustrations of the general phenomenon that I have seen was when Carl Richards sent me an e-mail telling me that my web site was his favorite on the internet, that he had learned more from me that from anyone else on the subject of investing, that he thought that the work that I was doing was of “huge value” and that he was banning me from his site because some Buy-and-Holders who visited the site had told him that they would never visit again if my words continued to appear there.

That’s the problem that we face as a society. If we allow people to say what they truly believe re investing advice, as we allow people to say what they truly believe in every other field of human endeavor, we will be able collectively to take things to a very good place. But if we don’t, we are stuck with Buy-and-Hold and all that follows from it. If we are not even able to make the case for why this strategy is so dangerous, we cannot win converts to the approach supported by the last 36 years of peer-reviewed research. The only way to move forward is to permit honest and civil discussions and, since the Buy-and-Holders are in the majority today, the practical reality is that they possess the power to stop such discussions from going forward.

Carl was the keynote speaker at a recent FinCon event. That means that he had about 2,000 people cheering on his words. Had he said at that event what he told me in his e-mail correspondence with me, that he views my site as the best investing site on the internet today, none of the things that you say here would be so, Sammy. I would have so many people coming to my site today that there wouldn’t be enough hours in the day for me to answer all the questions directed at me. The people who would be asking those questions would be people who need help and who I would be happy to help if only circumstances were different. No one gains by our collective decision to deny those people the help they need and want. But the reality is that those people cannot gain access to the help they need and want today.

Carl is afraid to say the words that he would need to say for those people to get the help they need. There is a Social Taboo that stops us all from speaking openly and plainly and frankly about the 36 years of peer-reviewed research showing that valuations affect long-term returns. This Social Taboo is the #1 biggest public policy problem facing our society today, in my assessment. It is this Social Taboo that served as the primary cause of the economic crisis that began in 2008 and that is probably the biggest cause of most of the political frictions that we have seen evidence themselves in recent years.

I don’t believe that I am helping us overcome that Social Taboo by keeping quiet about my belief that the last 36 years of peer-reviewed research is legitimate research. I believe that each time one of us makes a decision to keep quiet about his or her true beliefs, it makes it that much harder for all the others who want to speak honestly to work up the courage to do so. Our Buy-and-Hold friends made a mistake. When the mistake was discovered, their first reaction was not to fix it but to cover it up. And our decision was to go along with the cover-up because that was the easier path to take in the short-run. Now, 36 years later, here we are, with millions having suffered in an economic crisis brought on by our cowardice.

I believe that we need to be charitable in the comments that we make about the Buy-and-Hold strategy and about our Buy-and-Hold friends who advocate this strategy. But I also believe that we need to be honest about the 36 years of peer-reviewed research showing that there is precisely zero chance that this strategy could ever work in the long-term in the real world. I believe that the answer lies in mixing charity and honesty in the proper proportions. Yes, we need to be nice. Kindness is a virtue, But it is not nice to be quiet about errors that have been made in studies that millions of people have used to plan their retirements. That’s a very, very, very cold kind of kindness, in my assessment.

I wish you all the best that this life has to offer a person, Sammy.

Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

You can’t wait until you are 90 for your plan to come through, Rob. Buy and hold has continued to work, while people peddling timing schemes have continued to fail. The record is there for all to see.

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 say Idiot Switchers got out of stocks in 1996, because of high valuations.

Which is exactly what you did. For the exact same reason. But you are absolutely NOT an Idiot Switcher.

Even you can’t really believe such nonsense. Or can you?

Idiot switching is getting out of stocks in 1996 for the perfectly good reason that valuations are sky high and expecting that you will be rewarded for doing so within six months or a year or two years. If you did that, then your strategy failed. Stock prices zoomed for the next six months and for the next year and for the next two years. When you saw that your strategy failed, you gave up on it and then bought back into stocks, having missed out on two years of gains. Then you lost out again down the road a bit when prices fell hard. Idiot switching is a very bad strategy.

That’s not at all what I did. I got out in 1996. But I had not thought that that strategy would be vindicated within two years. The research does not support such a belief. I got out because the long-term value proposition was not there. So the fact that prices zoomed did not concern me. I knew from looking at the historical record that that was a live possibility. So, when prices continued up, I did not become alarmed and did not buy in and ended doing fine in the long run, just as the research showed would happen.

You are confusing (for about the 10,000th time, I feel obliged to note) short-term timing and long-term timing. Fama showed that short-term timing never works and was awarded a Nobel prize for his efforts. Shiller showed that long-term timing always works and was awarded a Nobel prize for his efforts. Both Fama and Shiller merited their Nobel prizes. Valuation-Informed Indexing COMBINES the powerfully important findings of Fama with the powerfully important findings of Shiller. We never, never, never, never, never practice short-term timing (idiot switching) because we know that it never works. But we always, always, always, always, always practice long-term timing because we know that it always works and is always 100 percent required for all investors who seek to keep their risk profiles roughly constant over time.

It is my view that anyone who does not understand the importance of the distinction between short-term timing and long-term timing cannot be fairly referred to as an “expert” in this field. Understanding that distinction is key to understanding the last 36 years of peer-reviewed research in this field and the last 36 years of peer-reviewed research is the most important 36 years of peer-reviewed research published in the historical of investing analysis.

I should add that it’s idiot switching that gave market timing a bad name. Market timing is wonderful. It is through market timing that we practice price discipline when buying stocks. Market timing ALWAYS works so long as it’s not idiot switching. The peer-reviewed research that I co-authored with Wade Pfau shows that any investor can reduce the risk of stock investing by 70 percent while also earning far higher returns just be being willing to tune out the Buy-and-Hold noise and practice market timing faithfully.

So how the heck did it come to be that millions of good and smart people believe that market timing is a bad idea?

Their experience with idiot switching was so bad that they gave up on market timing altogether. Investors became so intent upon avoiding the disaster suffered by idiot switchers that they became freakin’ Buy-and-Holders.

Fama was right. We need to avoid idiot switching. And Shiller was right. We need to be certain to always practice market timing. We need to take ALL of the peer-reviewed research into consideration when buying stocks.

I hope that helps a small bit, Anonymous.

Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

That would be a market timer. A buy and hold person doesn’t sell when the stock drops. Therefore, looking at return rates of the life of the fund as well 10 years are showing actual results of buy and holders. As said before, you have been given this data.

What if the Buy-and-Holder doesn’t hold when he sees most of his life savings evaporate?

Most don’t.

If people who say they are Buy-and-Holders really held through dramatic price downturns, we wouldn’t see dramatic price downturns. It is the massive selling that CAUSES dramatic price downturns.

The reality is that Buy-and-Holders always lose confidence in their strategy when the numbers come to show that it doesn’t work. Stocks are now priced at two times fair value. So we should be expecting a 50 percent price drop. Do you really think that all Buy-and-Holders are going to hold when 50 percent of their life savings is washed away? Most will not. It is a very rare person who can avoid panic after losing 50 percent of his life savings. Buy-and-Hold was not designed with the realities of human nature in mind. And so it never works. Investing is done by humans. Humans SELL when they experience life-destroying losses.

The better way is to keep your risk profile constant over the years. Exercise price discipline as you go along and you will never feel pressured to sell when your excessive risk causes you to suffer unacceptable losses. Stocks are obviously a lot more risky when prices are at two times fair value than they are when they are at fair value, right? So lower your stock allocation a bit to bring it where you wanted it when you started out. With the proper risk profile, you will be able to hold. Then things really will work out long term. That’s Valuation-Informed Indexing.

Both Buy-and-Holders and Valuation-Informed Indexers are seeking to “Stay the Course.” The question is, is it more important to always have the same stock allocation or is it more important to always have the same risk profile? Bogle says that it is more important to always have the same stock allocation. I say that it is more important to always have the same risk profile. Shiller’s research shows that risk is not static but variable. So our stock allocations must be variable too if we are to have any hope of keeping our risk profiles roughly stable over time. It is the investor with the constant risk porfile who is able to stick with his plan for the long term because he doesn’t suffer the devastating hits that those who keep their stock allocation stable instead always suffer in secular bear markets.

Those are my sincere thoughts re these matters in any event.

I naturally wish you all the best that this life has to offer a person despite any differences we might have re stock investing, Sammy.

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, what you are saying is that if Vanguard says I have $4 million in my account, they are lying to me and I am actually broke, right?

I’m not saying that you are broke. I am saying that you need to divide by two to identify the true, lasting value of your portfolio at a time when the market is priced at two times its fair value. The real value of your account is roughly $2 million.

Is it a lie to say that the value of the account is $4 million? it is. We need to be careful here. It would also be bit untruthful to say flatly that the value of the account is $2 million. You could cash in the account today for $4 million. So the $4 million figure has significance. But the lasting value of the account (according to the last 36 years of peer-reviewed research, not just me) is $2 million. So that has to be noted.

The most truthful way to talk about the value of your account is to note both realities. The account has a short-term value of $4 million because it can be cashed in for that amount today. But it has a long-term value of $2 million because 36 years of peer-reviewed research shows that valuations affect long-term returns. You don’t have a $4 million account that will be earning a return of 6.5 percent real for as long as you hold it. You have a $4 million account that will be earning returns far below 6.5 percent real until the stated value of the account comes to reflect its real value (which is half of today’s stated value).

Does that help?

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:

Of course you always give the caveat that people must reduce their account balance by 65% in order for your math to work, but then again, you said math wasn’t your thing.

Math isn’t my thing, Anonymous. The math supports what I say 100 percent. The math has been supporting what I say for 147 years now. So I suppose that you could say that math is my friend re this matter. But math isn’t really what gets of off, no. I care about the people. I am happy to use math to help people. But it’s the people that are my focus, not the math.

I think with the 65 percent number you might be thinking of the likely size of the next price crash. We always go below fair value before a secular bear market comes to an end. To know the true value of your portfolio, you would need to divide by two. Today’s P/E10 value is about two times the fair-value P/E10 value.

Why do you object to dividing by two? Does it not make perfect sense to divide by two at a time when stocks are priced at two times their fair value? Would you not like to know the true value of your portfolio? Do you not think that knowing that number would be a huge help in engaging in effective financial planning?

I think it makes all the sense in the world to divide by two. I think everyone should do it. I see it like brushing your teeth, huge upside and nearly no downside (the tiny bit of effort put into the task is the tiny downside). I can’t say that I have ever once in the 15 years heard any reasonable argument for NOT dividing by two.

The only one that I have been able to come up with myself is that, if you think the market is efficient, there would be no need to divide by two. I think that’s why it was not common practice pre-1981 to divide by two. But Shiller showed in 1981 that the market is NOT efficient, that valuations affect long-term returns. So that should have been the end of that. But for 36 years now we have been living in a twilight zone where few of us divide by two and yet everyone who follows the peer-reviewed research knows on some level of consciousness that we all need to do so. But they don’t say anything because it would hurt the feelings of those who don’t divide by two to realize that they have been making a terrible mistake all these years.

How is that ever going to change if a few of us don’t work up the courage to just say out loud what we realize the last 36 years of peer-reviewed research teaches us all about how stock investing works in the real world? If I keep my mouth shut, I am just one more person making the problem worse. It gets worse the longer the cover-up goes on because as more time passes it becomes more embarrassing to admit the mistake. So I try hard not to keep my mouth shut.

I try to be as gentle and loving as I can be in what I say because I don’t like to hurt people’s feelings any more than any of the rest us do. But I do make an effort to say what I believe. I believe that I end up hurting people’s feelings MORE by not speaking up. People are going to find out the realities the hard way when the next price crash arrives. Is it really a kindness to let them be surprised by seeing most of their life savings washed away with the tide? Or is the kinder thing to talk about the last 36 years of peer-reviewed research and what it means? I see this as a case where the truly kind thing is telling people the thing they very much do not want to hear.

Those are my sincere thoughts, in any event.

I naturally wish you all good things.

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:

Buy & Holders don’t have to concern themselves with theories. They choose an equities to fixed income ratio commensurate with their tolerance for risk and begin investing. Rebalancing takes care of those times when either asset class gets overvalued. And many Buy & Holders hold other equity classes other than the S&P 500, a practice which is anathema to LuckySeven as its Grand Poobah maintains that they should only hold that particular asset class. The proof is in the pudding. Rob Hocus No Step 2 Bennett is suffering through a failed attempt at early-retirement using his LuckySeven strategy while Buy & Holders have been richly rewarded by avoiding extremes.

Okay, John.

Rob