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

Instead, you have adopted the “Get Broke Quick” method.
30 years of consistent saving via buy and hold is hardly “quick”. Instead, it is a slow, methodical and proven way of retiring successfully.

Did the Great Depression “prove” that pushing stock prices up to unsustainable levels is a good idea?

I see it just the other way around. We can all enjoy annual returns of 6.5 percent real without permitting any irrational exuberance whatsoever. I vote for that. A 6.5 percent real return should be plenty. Relentless promotion of the Get Rich Quick/Buy-and-Hold stuff is killing us.

My sincere take.

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:

A portfolio is worth whatever you can sell it for in the market. No more, no less.

That’s the question under dispute, Sensible.

I agree that FOR THAT ONE DAY that is indeed what it is worth. But, if someone is planning a retirement, he needs to look beyond just what applies for that one particular day. If you are planning a retirement, you should be willing to take into consideration what the peer-reviewed research says re the true and lasting value of a portfolio. If the peer-reviewed research shows that you must take the CAPE value that applies on the day the retirement begins into consideration in calculating the safe withdrawal rate, then you should do that. You obviously get a very different number if you take the peer-reviewed research into consideration than what you get if you just ignore the peer-reviewed research.

I have a hard time seeing why we even have peer-reviewed journals if we are not going to permit people to talk about what the research shows. To my way of thinking, the research only has value to the extent it causes people to change their behavior. How can research change people’s behavior if they don’t feel comfortable talking about what the research shows and asking questions about it and so on?

We permit people to talk about the research in every other field of human behavior. Why do you think that the investment advice field needs to be so special?

Do you see that the price of stocks will change once we begin permitting discussion of the research? Then the price that the portfolio will sell for will be more in line with the real price. Given what you are saying here, that should make you happy. So you should logically be in favor of permitting honest posting re the research. Yes?

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 demand for stock wasn’t flexible we wouldn’t see huge swings in stock prices.

The question is — What is causing those swings?

Shiller showed that it is largely shifts in investor emotion that cause the swings. We should all want to moderate the shifts in investor emotion to the greatest extent possible.

The way to do that is to make investors aware of how much valuation shifts change the value proposition of stocks. You’re not doing that when you tell people that the safe withdrawal rate is the same number at all valuation levels. The suggestion there is that stock investing risk is constant, which is not even a tiny bit true.

Stock prices become self-regulating in a world in which honest posting re the peer-reviewed research is permitted. Stock prices go nutso in a world in which investors are discouraged from practicing valuation-based market timing.

Today’s CAPE value tells the tale on the merit of Buy-and-Hold. Today’s CAPE value is a national scandal. We should never see a CAPE value like that. And we never would if we permitted honest posting re the peer-reviewed research at every site. Buy-and-Hold hurts everyone and helps no one. We all should be Staying the Course re our risk profile, not re our stock allocation.

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 all these thousands of people that have expressed a desire to hear from you and about VII on all these other websites won’t do the same on this website even though they can post here anonymously?

That’s correct. Those people are not today Valuation-Informed Indexers. They have a mild interest in it. If people could talk about it at sites at which they participate, they would occasionally listen in and occasionally ask a question or two. In time, some of them would become Valuation-Informed Indexers. In more time, the number that did that would increase. Eventually, Valuation-Informed Indexing would become the dominant model for understanding how stock investing works.

It has to begin with opening one large site to honest posting re the peer-reviewed research. That’s the only way it could ever. People are not going to just wake up one morning and say “starting today, I believe entirely new things about how stock investing works.” We need to permit people to hear both sides and eventually they will come around.

Research is not self-executing. Shiller advanced our understanding of how stock investing works in a major way. But people do not change their views just because research is published in a journal. People need to be able to explore the how-implications of the research that is published for that research to have a positive effect on people’s lives. We need to open every site to honest posting by the close of business today, if not a good bit sooner.

My sincere take.

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>“It’s in the interest of every investor for stocks to be priced properly”

The proper price for a stock is the market price that ensures a willing buyer and a willing seller.</em>

What if there is an internet-wide prohibition on the discussion of important research? People need access to good information to be able to make sound decisions.

Do you believe that there is no such thing as overvaluation or undervaluation?

Do you believe that irrational exuberance even exists?

Why have peer-reviewed journals if we are not going to permit the product of peer-reviewed journals to be discussed?

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>You’re not appreciating the nature of free markets. A sale requires a willing buyer and a willing seller. You may be willing to pay $17 for a dollar of earnings but if I am not willing to sell to you at that price the sale will not happen.

There is not a single thing in Shiller’s research that would suggest that I should make that sale.</I>

Today’s stock market is not a free market. Part of what makes a market free is that investors have easy access to the information they need to make intelligent choices. For so long as honest posting re the last 43 years of peer-reviewed research is banned at every site, investors do not have access to the information they need to invest pursuant to their self-interest. We have seen during the first 22 years of our discussions that many investors would like to see honest posting re the research permitted at every site.

You don’t need to have shares of stock sold to bring their price down. All that you need is for investors to place less value on them. Once investors understand that irrational exuberance gains are not real or lasting, they will place less value on all their shares. That will bring the price of all their shares down.

Prices are always going to return to fair-value levels if the information needed to set prices properly is available. We should all want our stocks to be priced properly. So we should all want to see honest posting re the research permitted at every site.

If the market were efficient. stocks would always be priced properly. Today’s CAPE value is 34. Please explain.

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 describing what would happen if your high returns at minimal risk fairy tale ever happened.

You want high returns at minimal risk assets available to you but for no one else to notice, because as soon as it was noticed other people would outbid you.

You think that opening up other websites to your “information” would induce people to sell you high return low risk assets at a bargain price. It simply won’t happen.

It is simply impossible for all of us to load up on high return low risk assets.

You believe in the returns fairy, Bill Bernstein explains why you shouldn’t http://www.efficientfrontier.com/ef/403/fairy.htm

A return of 6.5 percent real is not a “high return.” That’s the return justified by the economic realities.

It is the Buy-and-Holders who are seeking returns higher than that. I am saying that everyone should be happy with the 6.5 percent real return. When you push prices up beyond that (by failing to engage in valuation-based market timing), you increase risk dramatically. Then you act like risk is just a normal part of stock investing.

It’s not normal at all. It came to appear normal in the years before we had access to Shiller’s Nobel-prize-winning research findings showing us how things work in the real world. But there’s nothing normal about failing to exercise price discipline when buying something. I every other market that exists, people know to do that. It’s only in the investment advice field that people came up with this loony-tunes idea that everything might work the opposite of how comTghmon sense says it must work and market timing/price discipline might not be 100 percent required for all investors.

There’s nothing wrong with a return of 6.5 percent real. That’s a great return. Those house of horrors that follows from pushing the return up above that just isn’t worth it.

My sincere take.

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:

“Then we could all enjoy the benefits on investing in an asset class that offers high returns at minimal risk.”

I don’t think there is a better sentence that illustrates your lack of understanding of how stock investing works.

If there was an asset class that offers high returns at minimal risk then we would all try to buy it, driving up the price and therefore lowering returns.

You’re describing what we would all do if we were all 100 percent rational. We are not. That’s the entire point of Shiller’s Nobel-prize-winning research. Shiller DISCREDITED the Efficient Market Theory. Investors are humans. which means that they have an inclination to engage in highly emotional behavior at times. 70 percent of what it takes to be a successful long-term stock investor is reining in those emotional inclinations. That is done through valuation-based market timing.

The companies that make up the U.S. stock market produce profits. The investors who own the shares of those companies get to participate in those gains. Stocks are not inherently risky. The thing that has made them risky in the past is irrational exuberance. Investors start to think that valuation-based market timing might not always be 100 percent required and they bid prices up to crazy levels. Then there is a horrible price to pay. We see bull markets and price crashes and economic collapses every time the Buy-and-Hold “strategy” (no market timing now, no price discipline now) becomes possible.

It doesn’t have to be that way. We now have 43 years of peer-reviewed research showing how stock investing works in the real world. And we have seen in our discussions that many. many investors are interested in learning the realities. All that we need to do is to open every site to honest posting re the peer-reviewed research and from that point forward we all get to live better and fuller and richer and freer lives.

I vote “yes” to that. I am not able to imagine any possible downside.

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:

There is always risk in everything. Stock, CDs, Bonds, Real Estate, precious metals, etc. That is how it goes.

No, Rob, you have not found any special magic or insight. If YOUR research was successful, then you would not be broke. We haven’t seen one single successful outcome with VII. You can slap as many labels as you want to try and package things up like some miracle cure, but it doesn’t make it so.

There’s more risk in drunk driving than there is in sober driving.

There’s more risk in Buy-and-Hold than there is in Valuation-Informed Indexing.

The thing that causes risk for stock investors is irrational exuberance. Failing to engage in valuation-based market timing permits irrational exuberance to get out of control. Engaging in valuation-based market timing reins in irrational exuberance.

Stock investing risk is not something that comes out of the sky randomly. We have control over it. It’s up to stock investors how risky stocks become for them. The peer-reviewed research tells us what is needed.

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:

There is nothing wrong with the statement by Evidence.  Without stocks, you are not able to participate in the upsides of growth that beat inflation.  Your own track record of failure is proof of that alone.

Evidence is saying that, since stocks were risky in the past, they will always be risky in the future. i strongly disagree. We learned something very important about stocks in 1981. We learned that irrational exuberance is a thing and that they key to successful long-term stock investing is to always, always, always practice valuation-based market timing and to always tune out the market pitch advanced by our Wall Street Con Men friends that there might be some alternate universe 50 billion light years away in which everything works the opposite of how it has always worked here on good old Planet Earth and valuation-based market timing (price discipline!) is not 100 percent required. Huh? What the f?

I think it will continue to be required. And I think that over time more and more of us will become aware of the importance of valuation-based market timing. The Bennett/Pfau research shows that we can reduce stock investing risk by nearly 70 percent just by being willing to practice price discipline when buying stocks. Stock investing risk is not a given. It was a product of our ignorance of how stock investing works in the days before Shiller published his Nobel-prize-winning research. Shiller’s research is an advance that makes all of our lives better. Good for us for being able to live in the better world that that advance makes possible.

I was a Buy-and-Holder once. The thing that drew me to it were the statements that Buy-and-Holders made that investors should look to the peer-reviewed research guidance for guidance on how to invest in stocks. I think that the Buy-and-Holders were right re that one. I only wish that they listened to their own advice!

Research is a plus. It is a plus because it teaches us things we didn’t know before the research was available to us. Shiller’s research was the biggest plus in the history of personal finance. It taught us the most important lesson about stock investing — that investors must never, ever forget to engage in valuation-based market timing. Once we get past you Goons, we all get to enjoy the far-reaching benefits of that advance from that day forward.

Research is good! Research works! Research is the future!

Stock investing risk is optional.

My sincere take.

Rob