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 have been bubbles since long before anyone thought of buy and hold.

The issue is that your fantasy world of steady high returns from stocks is not compatible with human nature or reality.

It’s true that there have always been bubbles. The difference today is that we now have 43 years of peer-reviewed research showing us how to stop them from forming. We have learned things that we did not know in earlier times and thereby gains the ability to live better lives.

All that we are talking about is investing rationally. Humans employ reason in many fields. I see no reason why they would not be able apply it in the stock investing field. No it perfectly, probably. But I believe that we could do a lot better than we are doing today.

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:

“ That’s my sincere take, in any event. The lesson that you are trying to teach is not one that I have any interest in learning, Evidence. I had come to view a number of people at the Motley Fool board as friends. I don’t make it a practice to lie to my friends.”

No “interest in learning “ means you won’t listen to anyone. You don’t want a discussion. You just want people to listen to you and then agree with you. You don’t have any friends and there isn’t this any traction in what you say or you would have some people posting over here in support of you.

It’s been a hard stretch of road, Anonymous. I’ll give you that one.

Please remember that it’s our Buy-and-Hold friends who made it a core principles of their approach to follow the peer-reviewed research in making stock investing decisions. That’s where I got it from (thank you, John Bogle!).

Research doesn’t always take you where you thought it was going to take you. It seems to say one thing for one stretch of time and then new research is published telling a very different story. That’s called “learning.” It’s a good thing. Obviously there is a price to be paid in that you need to say those awful words “I” and “Was” and “Wrong” to unlock the benefits of the learning experience. In the end, though, you end up far ahead and cannot even understand why you hesitated to say them.

I’m the true Buy-and-Holder here. That’s what I believe deep down. I stopped saying it because it seems too crazy to have so many Buy-and-Holders yelling at me and to have me saying that I am the true Buy-and-Holder. But that’s the core reality. It’s a Buy-and-Hold principle to take what the peer-reviewed research says into account when making stock investing decisions.

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:

Motley Fool seems to have gotten rid of (or vastly changed) their original discussion boards. Do you have a copy of your post on the REHP board that talked about Greaney’s study?

I have copies.

But that’s not really the issue. Today’s CAPE value is the issue. There could never be a CAPE value like that if everyone who worked in the field stressed at all times how important it is to keep irrational exuberance under control. It’s something that we all need to work at every day at every site.

I didn’t know that on the morning of May 13, 2002. I thought that Greaney had just overlooked the need to include a valuation adjustment in his study. But the error in the safe withdrawal rate studies is just a symptom of the real problem — the human weakness that causes us all to be drawn to Get Rich Quick/Buy-and-Hold strategies. That affects everything. That’s the story of stock investing. When stock investors fight that urge, they do well. When they fail to fight that urge, they get hurt.

There are no two sides on any of this stuff, Evidence. We all want the same things. We are all on the same side.

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:

“ But I don’t believe for two seconds that you are truly confident about your strategy ”

Back at you, Rob.

I’m confident enough to argue for permitting both sides to post honestly re their beliefs. if Buy-and-Hold prevails over Valuation-Informed Indexing in a fair fight, then so bet it, you know? No one knows everything. So no one should go with Valuation-Informed Indexing just because I endorse it. But no one should go with Buy-and-Hold just because Lindauer and Greaney endorse it either. They need to be challenged too.

Part of the scientific process is adopting a skeptical attitude. You might think that you have it all figured out but you might be wrong. To remain in the realm of scientific investigation, you must always permit new research and new discussion of what the research shows. I love what the Buy-and-Holders set out to accomplish. It pains me that they betrayed their own vision when they determined that new research could not be considered just because finding that that research is valid would require them to acknowledge that they got it wrong back in the days when the research needed to get it right was not available.

I think that my attitude toward these matters is a more confident one than yours. No, I am not 100 percent certain of every single thing I believe. It wouldn’t be healthy to be 100 percent certain across the board. At some point that becomes an excessively dogmatic attitude. But I am not afraid to have people hear both sides. I believe that, once people are able to hear both sides, Valuation-Informed Indexing will begin gaining ground on Buy-and-Hold. I believe that there will come a day when it will surpass it in popularity. We’ll see.

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:

They do speak honestly.  You just like what they say.

They speak honestly at times. But they are too hesitant about it for the message to break through to people who very much want to believe in Buy-and-Hold because their retirements are built on it.

Shiller is honest when he says that valuations affect long-term returns and when he writes an entire book on the subject of irrational exuberance. But why not include a sentence in his book saying that the Buy-and-Hold studies get the numbers wildly wrong? That’s pretty basic. That’s pretty darn important.

Bernstein was honest re the Buy-and-Hold retirement studies getting the numbers wildly wrong. But there’s a lot of stuff in his book that was heavily influenced by the Buy-and-Hold mindset. And how often did he repear the thing about the safe withdrawal rates being 2 percent at the top of the bubble. I am only aware of him saying it that one time, in his book. That was is important enough to merit thousands of mentions. People use retirement studies to plan retirements.

The research that I co-authored with Wade is the most important research published in this field in 30 years. So full props to him for his courage. But why flip to the Goon side? It’s because he needed to hear that other people in the field had his back. “Yes, Virginia, Valuation-Informed Indexing works!” That’s good to know. But what percentage of investors know it today? We need to open every site to honest posting to get the word out.

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:

What formal education/training do you have to tell experts that they need to correct their studies?  Why haven’t you done your own studies yourself?  Why are you broke and divorced?  Why have you sat on your lazy a$$ for the last 25+ years moaning and complaining?

I have enough formal education to be able to examine the Greaney retirement study and determine whether or not it contains a valuation adjustment. That’s all that anyone needs to see that this Buy-and-Hold stuff is garbage.

I don’t say that it started out as garbage. I like everything that the Buy-and-Holders came up with other than the loony-tunes “idea” that valuation-based market timing is not always 100 percent required for every investor. But, I mean. come on. Getting the numbers right in retirement studies is pretty darn important. People use retirement studies for help in planning their retirements.

I get it that the people who developed the Buy-and-Hold concept did not have Shiller’s amazing, Nobel-prize-winning research showing that valuations affect long-term returns available to them when they were doing so. That’s unfortunate. But that’s the way things go sometimes. We humans sometimes have to take a wild shot in the dark when trying to figure something out. When we take a wild shot in the dark, there’s always that chance that the wild shot in the dark will end up being off the mark. It’s just one of those things.

The other side of the story is that we now have 43 years of peer-reviewed research showing how stock investing works in the real world. My extensive formal training as a walking/talking human who doesn’t make a six-figure salary pushing the long-discredited Buy-and-Hold garbage tells me that we should be talking about the far-reaching how-to implications of that amazing research at every discussion board and blog on the internet, without a single exception. Talk about the benefits of formal training! Yowsa!

Correcting one’s retirement study when one learns that one got the numbers wildly wrong is important. Who’d a think it?

I wish you all good things, old friend.

Buy-and-Hold! Buy-and-Hold! Buy-and-Hold! Turning a quick buck is all that matters in this field. What happens to the poor investors following the long-discredited “advice” matters not a whit. Makes sense!

Hang in there, man.

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:

Peer reviewed research tells us that it is a really bad thing to be broke when we reach the age of 60.  Why do you ignore the peer reviewed research?

Peer-reviewed research can be such a bore, you know?

Rob

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

I sincerely believe you have a mental illness.

I don’t believe that you have a mental illness, Anonymous. But I do believe that you suffer from irrational exuberance. It’s a form of addiction. I believe that the primary focus of investment advice should be to help people avoid irrational exuberance and to recover from it once they fall prey to 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:

Unfortunately, most people ARE market timers.  Take a look at the stats.  The top 10% of people own the majority of stocks because they take advantage of market timers that dump cheap shares.  Take a look for yourself, Rob.  Who owns the shares?

If most investors engaged in valuation-based market timing, we could never have the CAPE value (34) that applies today. Each time stocks became overpriced and the value proposition of owning stocks dropped a bit, the demand for stocks would drop and the price would return to reasonable levels.

Today’s CAPE value shows that most today are following a Get Rich Quick/Buy-and-Hold “strategy.” It’s a national scandal that that is so 43 years after Shiller published his Nobel-prize-winning research showing us all for the first time how stock investing works in the real world.

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:

Yes, we have different perspectives.

I don’t think it is a good idea to be broke when we are in our 60’s and retired or near retirement.
I don’t think it is a good idea to let your spouse walk out the door because you won’t get a job to pay the bills.
I don’t think it is a good idea to make up stories about criminal acts because it is morally wrong.

I guess that is all just crazy talk to you, right?

I think it is important that people who make errors in retirement studies correct those errors when they learn about them.

Human beings did not come to Planet Earth with an instruction booklet on how stock investing works. We have been learning over time. We achieved a major advance in 1981. We need to give ourselves permission to talk about it and learn from it.

Yes, I think it is crazy talk to suggest that there is something more important than that. Geting every site opened to honest posting re the research is the top priority and there is nothing in a close second place. That’s definitely how I see it.

Rob