I’ve posted Entry #688 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Is It Mean to Tell People That Their Portfolio Is Worth Only 50 Percent of What They Think It Is Worth?

Juicy Excerpt: Today’s CAPE value is 32. That’s not quite 34 but it’s close. The math would be easier if it was 34, so let’s say that it is 34. Your stock portfolio is worth only half of what you have been led to believe it is worth. If the stated value of your portfolio is $1 million, its real, lasting value is $500,000. If the stated value of your portfolio is $10,00, its real, its lasting value is $5,000. Like that.

Hence the death threats.

Hence the acts of extortion aimed at academic researchers who backed me up.

Hence the board bannings.

I’ve posted Entry #687 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Investor Irrationality Is Scary — That’s Why We Are So Reluctant to Talk About It.

Juicy Excerpt: But this idea that the number on the portfolio statement isn’t real – that’s weird, scary weird. You want to be able to count on some things in this life. The portfolio statement is produced by a big company that hires lots of well-credentialed people and it is presented in a formal and official way; it’s a no-nonsense document. And this Shiller fellow wants us to believe that the numbers are wildly off the mark? What else are we going to discover to make us feel that our society is not as stable as we have been led to believe?

I’ve posted Entry #686 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called It’s Not Enough to Tolerate Market Timing — We Need to Encourage It.

Juicy Excerpt: Either the Buy-and-Holders got it right or they got it wrong. They didn’t get it half right and half wrong. If market timing is required for investors seeking to keep their risk profile constant over time, it is irresponsible to undersell the benefits of market timing for fear of offending the people who claimed otherwise when all of the research was not yet in. We do no favors for our Buy-and-Hold friends by taking the bandage off ever so slowly. If Shiller’s research is legitimate, we need to leave the Buy-and-Hold stuff behind and move on to the first true research-based model for understanding how stock investing works as quickly as possible.

I’ve posted Entry #684 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called “Investing for Humans” Is a Strange Title for a Book.

Juicy Excerpt: I’m sorry. There has never been a book on investing that aimed itself at the humans prior to this one. Shiller’s Irrational Exuberance came close. But he deliberately (I have to believe it was deliberate – it’s hard to imagine that one could avoid the most important and controversial issues by accident) avoided addressing the far-reaching how-to implications of his research findings in his book.

I’ve posted Entry #684 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called It Took Me a Long Time to Say That Buy-and-Hold Is Dangerous.

Juicy Excerpt: There was a turning point in the writing of the article. Usually, I like to start with a title. The title to a piece tells me where it is going to go. It sets the boundaries for what needs to be addressed. I had a hard time deciding on a title for that article. I tried writing without making a final decision. That caused problems. The fact that I didn’t have a title caused me to feel a lack of confidence in the message that I was advancing. What was it that I wanted to say? I should be able to sum it up in a few words, to offer a concise version of the story. Those words should be the title.

One day it hit me – Buy-and-Hold Is Dangerous.

I’ve posted Entry #683 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Is There a Case for Using the Historical Surviving Withdrawal Rate for Planning Purposes?

Juicy Excerpt: But the number that Buy-and-Hold studies identify is not a random number. It is the Historical Surviving Withdrawal Rate (HSWR). That’s essentially the average of all the possible safe withdrawal rates.

I’ve posted Entry #682 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The CAPE Value Translates Emotion Into a Number — That’s Huge!

Juicy Excerpt: Saying that “valuations matter” and not offering more specific guidance is like saying “drive safely.” Sure, you should drive safely. But there’s more value in advice to stay under the speed limit or not to drive when you are feeling sleepy or not to drive when you have been drinking or to be sure to check the air pressure in your tires from time to time.

I’ve posted Entry #681 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Language That Could Be Added to the Buy-and-Hold Retirement Studies to Put Readers on Notice of Their Risks.

Juicy Excerpt: Given that that transition process has not yet taken place, I don’t think it would be right to prohibit the publication of Buy-and-Hold retirement studies. But I strongly believe that language of the type set forth above should be required in any Buy-and-Hold study. If such language is provided and an investor uses such a study and suffers a failed retirement as a consequence, it seems to me that that investor was warned of that possibility. I don’t think it is fraud if such a warning was given. I do believe that it is fraud if no such warning was given.

I’ve posted Entry #680 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Shift to Valuation-Informed Indexing Is an All-or-Nothing Thing.

Juicy Excerpt: It took a long time for me to accept this. But there is no compromise possible. Either you believe that the market is efficient or you believe that valuations affect long-term returns. There is no middle ground. And of course there is no evidence that the market is efficient. The people who came up with the idea that the market is efficient are not silly people but that particular idea turned out to be a silly one. 100 percent of the evidence points in one direction and 0 percent of the evidence points in the other direction.

I’ve posted Entry #726 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Irrational Exuberance Is a Form of Inflation.

Juicy Excerpt: Irrational exuberance is another way to make people feel richer without actually doing so. Irrational exuberance gains are nominal gains. On a portfolio statement, they look just as good as real, economic-based stock-market gains. But of course, they are very different. They don’t last. They get the investor who believes in them in big trouble somewhere down the line.