Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Don’t you think it is irresponsible for you to try and trick people into your market timing scheme, when it has never worked for even one single person, including you?
If I had a cure for cancer that had passed peer review, would it be irresponsible for me to tell people about it? I say “no.” If there were some people who elected not to make use of the cure, I would of course be fine with that. It’s their body, it’s their choice. But, no, I do not find it even a tiny bit irresponsible to let people know what the last 39 years of peer-reviewed research teaches us about how the stock market works. I think that it is 100 percent imperative that we get the word out to everyone on the planet.
Say that there is something wrong with Shiller’s research. That could be, right? The fact that he was awarded a Nobel prize does not make him God. It is at least theoretically possible that Shiller made a mistake somewhere down the line. You know what we could do to increase the offs of bringing that mistake to light quickly? We could open ever discussion board and blog on the internet to honest posting, without a single exception. When we do that, we will identify any weaknesses in the Shiller model. We should all want that, just as we should all want to discover any weaknesses in the Buy-and-Hold Model.
My sincere take.
My best and warmest wishes to you and yours.
Rob
“ If I had a cure for cancer that had passed peer review, would it be irresponsible for me to tell people about it? ”
It wouldn’t pass peer review with outcomes data, so that would not be responsible, just like VII.
If we had 150 years of data showing that people who smoked got cancer more frequently than people who did not smoke, would that satisfy you? That’s what we have in the investing realm with the Bennett/Pfau research. I say that we should be discussing that research on every discussion board and blog on the internet.
Does Get Rich Quick/Buy-and-Hold have outcomes data? There has never been an iota of outcomes data supporting the fantastic claim that price discipline (market timing!) is not required. Wade Pfau spent 16 months researching that one. He was amazed to learn that there wasn’t an iota of research supporting a strategy that is promoted as research-based. He expressed his amazement re that one on numerous occasions.
Rob
We look at outcomes to confirm theory. We have yet to see even one successful outcome from anyone implementing VII.
Please show me an outcome confirming the theory that market timing (price discipline!) isn’t required. Wade Pfau devoted 16 months of his life to trying to find one such outcome in the entire history of the U.S. stock market and came up empty handed. Gee, I wonder why.
Research-based is good enough for me. Especially when I consider the track record of the alternative.
I wish you all good things.
Rob
“ Please show me an outcome confirming the theory that market timing (price discipline!) isn’t required. ”
I would be happy to. I have tried several times, but you won’t let my post show up. Can I write a guest post and show multiple portfolios with successful buy and hold outcomes?
You can’t do that because it has never happened.
I worked with Wade Pfau for 16 months on the peer-reviewed research we published showing that Valuation-Informed Indexing has been superior to Buy-and-Hold for the entire history of the U.S. stock market. Wade had no bias against Buy-and-Hold. He started out believing that it was a real thing. As did I. He was not able to find a single piece of research showing that market timing doesn’t work or isn’t required. He kept checking his work over and over again because he was amazed by what he found. But there is nothing there. Market timing (price discipline!) had always worked and has always been required.
When Wade presented our research at the Bogleheads Forum. long-time Buy-and-Holders started losing confidence in the idea that market timing doesn’t work (Wade and I agree that the rest of the strategy checks out). You Goons went into freak-out mode. You threatened to destroy his career if he continued doing honest work. Extortion is a crime, a felony. You obviously would not have risked going to prison if you thought that there was research somewhere showing that market timing doesn’t work. You would have just presented that research and the challenge to Buy-and-Hold would have been defeated without you having to engage in any criminal behavior.
I mean, come on. This stuff doesn’t have to be so hard. It’s hard because you are not willing to acknowledge that market timing always works and is always required. That’s what makes everything so contentious. There is 39 years of peer-reviewed research pointing in the other direction. We need to open every discussion board and blog to honest posting so that we can get the word out to the millions of middle-class investors who need to know about it.
My best wishes.
Rob
First you challenge me to post outcomes data to show that you shouldn’t time the market and then you make a follow up post saying you won’t let me post the data. This seems to be the only site that doesn’t allow truthful posting and that your definition of “honest” posting is merely your opinion.
There is no outcomes data supporting Buy-and-Hold. The idea is absurd. There’s plenty of data supporting every aspect of Buy-and-Hold except for the “idea” that market timing is not required. But looking for data to support the idea that market timing is not required is like looking for data to support a perpetual motion machine.
Wade Pfau spent 16 months of his life looking for data supporting the idea that market timing is not required. He came up empty-handed. His posts at the Vanguard Diehards board reporting on our research were persuading people when you Goons stepped in and threatened to destroy his career if he kept doing honest work. If you really want to know whether market timing works or not, you would drop all the criminal stuff and just let people post what they believe.
Would you get people saying they believe in Buy-and-Hold? You would. But, if you permitted honest posting, over time the number who believe that market timing is not required would diminish. That’s the key. We need to permit honest posting. Otherwise, we are stuck believing what we believed in 1980 and cannot move forward in our understanding of how stock investing works. I want to move forward. That’s why we have been working at cross purposes for 18 years now.
There are other sites that permit discussion of pieces of the truth. But this is the only place that I know of where it is regularly pointed out that we need to discuss the criminal stuff if we are all to move forward. Our laws against death threats and extortion and financial fraud are important and necessary laws. Without enforcement of those laws, Buy-and-Holders can intimidate people who challenge their views and thereby stop knowledge of the far-reaching implications of the last 39 years of peer-reviewed research from spreading across the planet.
Everything that I post is my opinion. I believe that Shiller’s Nobel-prize-winning research is legitimate research. Given that that is my opinion, I need to say that. If I say that I believe that Greaney’s retirement study contains a valuation adjustment, I am engaging in financial fraud myself.Thanks but no thanks, you know?
Please take good care.
Rob
The fact that you won’t let the data be posted on your website is proof that you know that you are wrong. The fact that Wade Pfau does not say what you say in any of his books or on his website also proves you are wrong. The fact that Shiller does not say what you say, indicates you are wrong. The fact that you fail to provide links to any death threats or job threats proves that you are wrong.
Yeah, yeah.
Rob