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 doubt Shiller would say anything that would persuade me.”

What makes you think that you know more than Shiller? What credentials do you have that says you are qualified to even question the opinions of Shiller?

I publicly pointed out the error in the Buy-and-Hold retirement studies on the morning of May 13, 2002. Shiller has not done that as of today. So I am 18 years ahead of him re that one.

I couldn’t have done what I have done without the work that Shiller did before I came on the scene. But Shiller has held back from exploring the how-to implications of his work (it is discussion of the how-to implications that most upsets the Buy-and-Holders). I have not let the Buy-and-Holders keep me back. I learned new things every week. And there are a lot of weeks in 18 years.

It doesn’t take a lot in the way of credentials to take note that a retirement study lacks an adjustment for the valuation level that applies on the day the retirement begins. Anyone with a little bit of common sense could have done what I have done. What it takes is the courage to stand up to you Goons. That not too many have. People do not like to see their loved ones threatened. People do not like to see their careers destroyed.

I of course do not like those things either. But I could not stand to see the lives of my friends at the Motley Fool board destroyed by Greaney’s deceptions. And I cannot bear the thought of seeing millions of other lives destroyed in the next price crash. So I stand up to you. The only way forward for all of us is for someone to stand up to you. So I do that. My credential is my love for the millions of middle-class people who need access to information about what the last 40 years of peer-reviewed research teaches us all about how stock investing works in the real world.

And what makes you think that you are qualified to threaten people who believe that Shiller’s Nobel-prize-winning research is legitimate research?

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:

Robert Shiller once again says you are wrong:

https://www.cnbc.com/2020/12/15/robert-shiller-calls-stocks-highly-priced-but-wouldnt-cash-out.html

He does not mention anything about a stock crash. In fact, he says that the market is not so high that he wouldn’t consider it an investment.

Thanks much for the link.

There is nothing that Shiller said in that interview with which I would disagree. There’s no valuation level at which I would say that people should not consider stocks as an investment. So I certainly agree re that one. And I of course agree that stocks are highly priced.

I would convey more worry in my tone, that’s for sure. This is not a time for complacency. The CAPE level is alarming. So, while I don’t disagree with Shiller’s statements, I do take issue a bit with his tone.

One significant difference between Shiller and me is that he directs a lot of energy to describing the “narratives” that investors use to form their stock-buying decisions. I see narratives as being primarily an exercise in rationalization. People decide what they want to do for emotional reasons (greed pushing prices up and fear pushing prices down) and then turn to things like narrative to justify their choices. It doesn’t hurt to mention the narratives. I don’t object to the discussion of them. But I would not put as much focus on them as Shiller does.

I wish that the people who interview him would ask him what stock allocation he would suggest for the typical investor. I would say “30 percent stocks” at today’s prices. Shiller often says what he says here – that people should not cash out. That doesn’t tell us anything. It is never a good idea to cash out. But it certainly doesn’t make any sense to be going with the same stock allocation today as you would go with if stocks were priced at reasonable levels. I wish that interviewers would try to get him on the record re that one.

I don’t know what Shiller would say to that question. My sense (from other interviews that I have seen with Shiller) is that he almost always goes with mostly stocks himself. My sense is that he moves to different market segments when prices in the broad U.S. market get too high. Or he invests in non-U.S. markets. I am okay with that. I don’t think it is a dumb idea. But I have doubts whether it is the right approach for the investor who does not want to spend a good bit of time researching this stuff. I think it is better for that investor to keep things simple and to go with a lower stock allocation at times when prices are insanely high. Shiller may know enough to be able to protect himself without getting out of stocks altogether. But I don’t think that that is so for the typical middle-class investor.

He certainly never said anywhere in that interview that I am wrong to believe that irrational exuberance is a real thing. His entire life’s work shows that he agrees with me re that one. And that is the one that matters. If irrational exuberance is a real thing, the safe withdrawal rate is a number that changes with changes in valuation levels and the entire Buy-and-Hold Model is dangerous stuff. I have never seen Shiller say anything to make me think that he does not believe that irrational exuberance is a real thing. But I certainly think it would be a good idea if he put more focus on the dangers of Buy-and-Hold.

I think that everyone in this field should be speaking out on that one. Those who still believe in Buy-and-Hold should of course say what they still believe. Everyone should be posting honestly. But everyone should be acknowledging the elephant in the living room — the 39 years of peer-reviewed research showing that stock investing risk is not constant but variable and that therefore market timing must always work and is always required for investors who seek to keep their risk profile constant over time.

My best and warmest wishes to you and yours.

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:

“Shiller’s research shows that 50 percent of the value of the stock market today is cotton-candy nothingness. ”

Really? Then why has Shiller continued to tell people, even as recently as last month, to keep buying stocks? Either he is lying or you are misrepresenting his work. Which is it?

I tell people to buy stocks. I say that the typical middle-class person should be going with a 30 percent stock allocation today. If that person is saving a portion of each paycheck, then he should be putting 30 cents of each dollar saved in to stocks. That’s buying stocks. So there is no contradiction there.

The better question is — Does Shiller believe that people should be going with a lower stock allocation today, when the CAPE value is 32, than they did in 1982, when the CAPE value was 8. I say with no hesitation whatsoever, that they should be going with a lower stock allocation today. The risk of owning stocks in 1982 was virtually non-existent. The risk today is off the charts. So the investor who wants to keep his risk profile constant over time MUST go with a lower stock allocation today. That is, he MUST practice market timing.

Does Shiller agree? We all should want to know the answer to that question. We all should be urging the launching of a national debate in which Shiller and thousands of others would be asked that question. Bogle agreed before he died that Valuation-Informed Indexing (market timing!) would probably work. I think that Shiller would say the same. Shiller would probably state the point more strongly. So let’s ask him!

He is not going to answer the question unless you Goons agree to drop the criminal stuff. No one likes to see their career threatened. No one likes to see the lives of their loved ones threatened. So you will have to leave that stuff behind if you hope to get Shiller to respond to your questions. But I am 100 percent sure that he will be happy to help you out of you simply agree to be constrained by the dictates of U.S. law. Do that, and everyone wins.

My sincere take.

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

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:

First of all, you have had plenty of time and formats to spread your opinions. Your problem hasn’t been getting your message out. Your problem is that you can’t get the investment community to agree with you. Secondly, your version of what you call “honest” posting is different than what most consider if the definition of that term. Third, millions of people don’t have to change why and how they buy stocks just to make you happy. You keep talking about Shiller saying how stocks work, yet you don’t agree with his comments. For example, he has continued to make statements, including comments in the last month, about staying in the stock market. Either Shiller is lying or else you are misrepresenting what he is saying.

We don’t know precisely what Shiller believes because he has not been questioned in depth re what he believes. I believe that we should be questioning him in depth re what he believes.

Is the safe withdrawal rate the same number at all times or is it a number that is higher when valucations are low and lower when valustions are high? I am not aware of Shiller ever directly addressing that point. I say that, if Shiller’s research is klegitimate, the safe withdrawal rate must change with changes in valuations. We should all want to know what Shiller believes. The best way to find out is to ask him.

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:

Uh oh. Once again, Robert Shiller says Rob Bennett is wrong.

https://www.project-syndicate.org/commentary/making-sense-of-soaring-stock-prices-by-robert-j-shiller-et-al-2020-11

First of all, Shiller is pointing out that the low interest rates (not buy and hold) are driving up stocks:

“ Market observers have noted the potential role of low interest rates in pushing up CAPE ratios. In traditional financial theory, interest rates are a key component of valuation models. When interest rates fall, the discount rate used in these models decreases and the price of the equity asset should appreciate, assuming all other model inputs stay constant. So, interest-rate cuts by central banks may be used to justify higher equity prices and CAPE ratios.
Thus, the level of interest rates is an increasingly important element to consider when valuing equities. To capture these effects and compare investments in stocks versus bonds, we developed the ECY, which considers both equity valuation and interest-rate levels. To calculate the ECY, we simply invert the CAPE ratio to get a yield and then subtract the ten-year real interest rate.”

Despite Rob telling us that Shiller thinks the market is about to crash, he actually says that the market looks attractive:

“ But, at this point, despite the risks and the high CAPE ratios, stock-market valuations may not be as absurd as some people think.”

And

“ But with interest rates low and likely to stay there, equities will continue to look attractive, particularly when compared to bonds.”

Shiller already told you not to time the market with CAPE, but you wouldn’t listen and you paid the price. Here he is again, explaining how continue to be wrong. There goes your $500 million windfall.

That’s an important article, Anonymous. Thanks for bringing it to our attention.

I have been saying since the morning of May 13, 2002, that we need to open every discussion board and blog on the internet to honest posting re the last 39 years of peer-reviewed research in this field, without a single exception. This article is the sort of fruit that we see develop from permitting honest discussion. Shiller is offering views that we have not heard before, Everyone who works in this field should be taking the points he makes here into consideration and incorporating them into their own views as to how stock investing works. I will write a column for the Value Walk site offering observations on this article.

My initial reaction is not to be entirely persuaded by the points that Shiller makes here. It certainly makes sense that low interest rates make stocks look more appealing in relative terms. But I don’t agree that: “Despite the risks and the high CAPE ratios, stock-market valuations may not be as absurd as some people think.” Interest rates are today very low. It seems unlikely that they will remain that low for long. What happens when interest rates rise? Just as a lowering of interest rates brings stock prices up, an increase in interest rates brings stock prices down.

If stocks were priced low at a time when interest rates were low, the pressure on stock prices to fall when interest rates rose would not be so great — they would already be low. But it seems to me that we are in a doubly risky situation today, There is pressure on stock prices to fall because they are so high. And there is added pressure on stock prices to fall because interest rates are so low that they can only go up. How are stock prices going to rise if they are already at insanely high levels at a time when low interest rates are giving stock prices a big boost?

I think it would be fair to say that today’s low interest rates go a long ways to EXPLAINING today’s high stock prices. That I can buy. But the risk that those prices are going to fall hard in the not-too-distant future is still present. If anything, it is worse than it would be if interest rates were high today. If interest rates were high today, stock investors could hope that interest rates would drop and give stock prices another boost. That cannot happen with interest rates where they are today.

He says that the low interest rates are “likely to stay there.” He doesn’t say why he believes that. Economic conditions do not remain the same indefinitely. Every crash that we have seen was unexpected. If it had been expected, that expectation would have brought stock prices down and diminished the size of the crash. It is when investors stop worrying about a crash that the danger of a crash is the greatest. I see this as an article that will cause many investors not to worry so much about a crash. It is my view that people should be very worried.

Please remember that interest rates are “priced in” to the market price for stocks. But irrational exuberance is never priced in. It is the one factor that by definition cannot be priced in because the process by which factors are priced in is a rational process and irrational exuberance takes place outside of rationality (the rational thing would be for investors to price stocks properly).

I believe that Shiller has advanced the ball with this article. It gives everyone in the field something to think about. I look forward to seeing what lots of smart people have to say about 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:

Other than you, I don’t see anyone else asking him questions.

I think that every person alive on the planet should be asking Shiller questions about the far-reaching implications of his amazing research. I don’t think there should be a single exception. The more people who ask him questions, the more we all are likely to learn. I am not even able to imagine any 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:

No, you are making interpretations. Shiller does not say what you say. Therefore, you are not reporting.

It is Shiller who has said that there is irrational exuberance, not me. It’s not an interpretation for me to say that. It is reporting.

It is an interpretation for me to say that that means that there is zero chance that the safe withdrawal rate is always the same number. Shiller has not said that and I have reported on why he has not said it — the relentless abuse advanced by Buy-and-Holders at those of us who believe that Shiller’s Nobel-prize-winning research is legitimate research and who post our honest views about the how-to implications of that research.

Again, if you want to know the extent to which Shiller’s views are in accord with mine, ask him. Knock off all the criminal stuff and just ask him. There is a reason why you have not done that for 18 years now. You don’t want to know. You feel that the chances of Buy-and-Hold remaining dominant for another week or another month or another year are better if people are kept in the dark. I am a journalist. So I naturally do not want to see people kept in the dark. I oppose the 39-year cover-up.

Shiller did something important in 1981, He changed our understanding of how stock investing works in a fundamental way. Now we all need to insist on recognition of our right to post honestly re what his amazing research findings show so that we can all begin living better lives from that point forward.

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:

I have yet to Shiller say that people should divide by 2. Secondly, I haven’t seen one single criminal act. Feel free to post a link to Shiller saying to divide by 2 and feel free to post links to the specific criminal acts you speak of.

By the way, I think my work is worth $1 Trillion. When should I expect to get my check?

I have never heard Shiller say that people need to divide by two either.

My take is that everyone alive should want to know whether he believes that this is required or not. So we should all be doing everything in our power to find out. If we permitted honest posting at every site, he would tell us and we would all be better off. Even those who didn’t believe that what he said was right would be better off because they would be better informed.

This is the entire story. Shiller gave us all an amazing gift with his Nobel-prize-winning research. But to open that gift, we need to permit honest posting at every site. So I am 100 percent in favor of doing that.

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 know what people want. ”.

No you don’t. If you did, you would have plenty of following here on this board as evidence to back this up.

“ If I were seeking treatment for cancer, I would want to know that the research backing up the treatment plan that I was considering had passed peer review.”

You call your comments as being research based, but they are not. Your comments are interpretations. That is a BIG distinction.

“ If you block others from hearing about options that they want to hear about, then you become liable for any losses that they suffer as a result. In this case we are talking potential losses in the many trillions of dollars. Not good.”

Tell us how this is consistent with your practice of blocking posts?

“ I believe that you are going to end up in a prison cell”

How can anyone take this comment seriously? You might as well say that the moon is made of green cheese.

“ Get Rich Quick strategies are a lot less fun on the other side of the price crash that exposes them for what they are.”

You mean like the expectation of getting a $500 million windfall?

“No you don’t. If you did, you would have plenty of following here on this board as evidence to back this up.”

There would be thousands posting her every day if not for your criminal acts. The very fact that you engaged in those criminal acts shows the power of the ideas. If you didn’t see people being persuaded by my stuff, you never would have crossed he felony line. Crossing the felony line is an act of desperation.

“You call your comments as being research based, but they are not. Your comments are interpretations. That is a BIG distinction.”

When I say that the title of Robert Shiller’s book is “Irrational Exuberance,” is that an interpretation or is that an obvious fact that can be checked by ordering the book from Amazon.com? If irrational exuberance is a thing, then it is a logical impossibility that Buy-and-Hold could ever work for even a single long-term investor. If irrational exuberance exists, then stock investing risk is not stable but variable; risk is greater when there is more irrational exuberance. If risk varies, then the investor seeking to keep his risk profile stable over time MUST engage in market timing to do so.

We desperately need thousands of people offering their interpretations of Shiller’s work. That how Valuation-Informed Indexing will over time become increasingly popular until it becomes the dominant strategy. The entire reason why we have this problem today is that not enough people were offering interpretations of Shiller’s work all over the internet before I came along. I am doing my part to take us all to a better place. I certainly do not offer any apologies for doing so.

Is offering interpretations of Shiller’s work the “bad behavior” that you say justified me being banned at so many boards? Please mark me down as 100 percent guilty as charged. It is my prayer and my expectation that in the days following the next price crash we will be seeing a lot more bad behavior at every investing discussion board and blog on the internet.

“How can anyone take this comment seriously? You might as well say that the moon is made of green cheese.”

Bernie Madoff was the toast of the town until his fund collapsed and he landed in a prison cell. It is in the nature of Get Rich Quick schemes that they make people happy until they are exposed for what they are. A friend tries to help a friend at the time when it remains possible for his efforts to do some good. After the crash, there is not going to be anything that I will be able to do. So I do what is available to me today. I wouldn’t be helping you if I said that I do NOT believe that you will end up in a prison cell.

“You mean like the expectation of getting a $500 million windfall?”

There is no one on the planet who was worked as hard as I have to open the internet to honest posting re the past 39 years of peer-reviewed research in this field. Shiller’s research findings stand to benefit millions of people in very big ways. Had you not engaged in criminal acts to hold me back, I would have earned a lot more than $500 million from the work that I have done over the past 18 years. This is the most important work that anyone is doing in this field, Would the world be a better place if I had just kept my mouth shut about the error that I saw in the Greaney retirement study? How will a jury see things in the days following the next price crash? That’s what will decide things.

My best wishes to you and yours.

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:

“Shiller should be an advocate of his ideas.”

But that doesn’t mean he has to be an advocate of your interpretation of his work.

He should address questions relating to the implications of his ideas. He could say: “Given my finding that valuations affect long-term returns, there is precisely zero chance that the safe withdrawal rate is the same number at all times.” Or he could say: “Despite my finding that valuations affect long-term returns, I still think that it is possible that the safe withdrawal rate could be the same number at all times and here’s why.”

One of those statements is in accord my my views and one is not. Both of them enhance our understanding. The current situation — where Shiller fails to engage on these questions because he fears what the Buy-and-Holders will do to him if he does so — is not healthy. It leaves these questions up in the air. And the questions are too important for us as a society not to be exploring them.

That’s my sincere take, Anonymous.

My best wishes to you.

Implication-Exploring Rob