A Rich Life

The Old Ideas on Saving & Investing Don't Work -- Here's What Does

Valuation-Informed Indexing #587: Shiller’s Research Is a Money Maker for the Investment Advice Field

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I’ve posted Entry #587 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Shiller’s Research Is a Money Maker for the Investment Advice Field.

Juicy Excerpt: Buy-and-Hold does make money for investment advisers. Lots of it. But you know what would make more? Valuation-Informed Indexing, the opposite of Buy-and-Hold, the strategy that says that it is critical that investors practice market timing (price discipline!).

Comments

  1. You have been trying to peddle your market timing scheme for many years, yet haven’t made a dime. I think that speaks volumes.

  2. You have been trying to stop people from hearing my message for many years. I think that speaks volumes.

    Rob

  3. Everyone that has been on all the major investing forums knows you and your message, yet no one is willing to pay you a dime. That speaks volumes.

  4. No. not everyone. You Goons represent only 10 percent of those board communities. The vast majority have never once advanced a death threat or engaged in extortion. The vast majority hate that sort of thing.

    The vast majority don’t speak out against it, except perhaps once or twice. If they did, the nastiness would all come to an end and we would all enjoy an amazing learning experience together. But they don’t. The vast majority is complacent. Their preference is for honest posting to be permitted and for U.S. law to be respected. But their assumption is that, if there were some huge problem with Buy-and-Hold, somebody would have already done something about it. So they are not about to put the lives of their loved ones at risk by speaking up about you Goons.

    That leaves the 10 percent who believes that Shiller’s Nobel-prize-winning research is legitimate research. Yes, I have been banned from every major investing site on the internet. I have also has more astoundingly effusive praise comments directed at me than have been directed at anyone else who has ever posted. In fact, it is that astounding praise that has gotten me banned. You Goons wouldn’t feel so threatened by me if my work had not won so much praise. You don’t speak for “everyone” or anything eve remotely close to it.

    Our nation is in the process of moving from the most dangerous Get Rich Quick approach to stock investing (Buy-and-Hold) ever concocted by the human mind to the first true research-backed approach (Valuation-Informed Indexing). I think we are going to make it in the days following the next price crash. Once we are all able to talk about the realities, there will be mountains of money to be made helping people to overcome the Get Rich Quick/Buy-and-Hold impulse that resides within all of us and that has been making stocks a far more risky asset class than they need to be for as long as there has been a stock market.

    I am optimistic. A people that would adopt laws against the behavior we have seen from you Goons is not going to continue to tolerate that behavior after millions of people have seen their lives destroyed by the relentless promotion of the pure Get Rich Quick approach. But I don’t know everything. It is at least theoretically possible that I am wrong re this one. We will have to wait to see how it all plays out.

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

    Rob

  5. It is all made up. You can’t show even one death threat, act of extortion or any other criminal activity.

  6. I can show that the error in the Greaney retirement study that I pointed out in my famous post from the morning of May 13, 2002, has not been corrected to this day.

    Please explain how something like that could happen without the use of criminal acts of intimidation.

    Rob

  7. I think you have highlighted the benefits of buy and hold over VII.

    I want advisors making less money, not more. I want investors to keep the maximum possible percentage of their investment return. Not losing more of it to middle men.

  8. “I can show that the error in the Greaney retirement study that I pointed out in my famous post from the morning of May 13, 2002, has not been corrected to this day.”

    You have admitted that Greaney’s study (and Trinity and Bengen) correctly calculated the withdrawal rate that survived all periods in the past.

    You have admitted that 4% never failed.

  9. “I think you have highlighted the benefits of buy and hold over VII.

    I want advisors making less money, not more. I want investors to keep the maximum possible percentage of their investment return. Not losing more of it to middle men.”

    Neither Buy-and-Hold nor Valuation-Informed Indexing favor the use of middle-men. It is stock picking that favors the use of middle-men.

    The reason why Valuation-Informed Indexing helps those in the investment advice field is that it stabilizes the economy and makes stock investing less risky. That’s good for everyone.

    Rob

  10. “I can show that the error in the Greaney retirement study that I pointed out in my famous post from the morning of May 13, 2002, has not been corrected to this day.”

    You have admitted that Greaney’s study (and Trinity and Bengen) correctly calculated the withdrawal rate that survived all periods in the past.

    You have admitted that 4% never failed.

    I didn’t “admit” it. That’s what I said from the first day. Greaney calculated the Historical Surviving Withdrawal Rate correctly. He engaged in deception in saying that the Historical Surviving Withdrawal Rate is always “100 percent safe.” I think we should tell people that. I think honest posting should be permitted at every internet site, without a single exception. It’s not just about turning a quick buck.

    Rob

  11. “ I can show that the error in the Greaney retirement study that I pointed out in my famous post from the morning of May 13, 2002, has not been corrected to this day.”

    There was no error in the Greaney study and there are no death threats and no extortion attempts nor are there any other criminal acts.

  15. “ There was one.”

    You have time to post there and here and surf the internet, yet no time for a job. Really?

  16. Yes.

    I was a Buy-and-Holder on the morning of May 13, 2002. It was on the evening of August 27, 2002, that I gave up on Buy-and-Hold and began the search for something new that over time became Valuation-Informed Indexing (which is Buy-and-Hold with the prohibition on market timing dropped from the mix). When I saw Greaney’s threat to murder my loves ones endorsed by 200 Buy-and-Holders I knew that this “strategy” was not for me.

    I don’t know all there is to know about stock investing. Nothing close to it. What I believe is that the Buy-and-Holders got most of it right. So I incorporated everything from Buy-and-Hold but the prohibition on market timing into the Valuation-Informed Indexing concept. Going by the last 40 years of peer-reviewed research, I believe that the prohibition on market timing was a terrible mistake. I say that market timing is absolutely essential for investors who want to keep their risk profile stable over time (that is, those who want to Stay the Course in a meaningful way). But I of course don;t know all there is to know. For that we need to open every internet site to honest posting re the past 40 years of peer-reviewed research so that we all can learn as much as we possibly can as fast as we possibly can.

    I can’t just sit around waiting for the internet to be opened to honest posting. My job is to learn as much as I can about the new model while waiting for that to happen (I believe it will happen in the days following the next price crash). So I continue to respond to questions and comments from you Goons and to write the weekly Value Walk column. Those things help me to learn more.

    The reason why I didn’t write a book on the realities of stock investing 20 years ago is that I did not have enough to offer at that time, Today, because of the work I have done over the past 20 years, I believe that I do. I want to learn as much as I can. That’s always going to be so. The amount that I an all others can learn will skyrocket when the entire internet is opened to honest posting. But I don’t want to pass up on any opportunities to learn before that happens. I want to know as much about this subject as I can. I try to add to my storehouse of knowledge every single day.

    Rob

  19. Your Valuewalk columns all look the same, yet you talk about having “new insights”. What new have you come up with in the last 10 years?

  20. They are not all the same. Every article that I have ever written about stock investing is rooted in a belief that Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns is legitimate research. They all start from a different place than articles rooted in a belief that the market is efficient (that timing is not required) start from. But they all explore different aspects of the question, just as all articles rooted in a belief that the market is efficient (all articles by Buy-and-Holders) are the same in one way but explore different aspects of the question.

    Do you say that all articles written by Buy-and-Holders are the same because they all are rooted in a belief that market timing is not required?

    It is my belief that we should be exploring whether market timing is required or not (whether Shiller is right or Fama is right) at every discussion board and blog on the internet, without a single exception. That’s how we get to the bottom of things, by having discussion, not by intimidating people who attempt to engage in rational discussion.

    That one thing that is common to all of my articles (that they start from a premise that market timing always works and is always required) is the reason for all of the “controversy” that surrounds them. I think that we should be discussing that controversial question, not ignoring it. I think that EVERYONE should be discussing that question, not just me. I think that it is the most important public policy matter facing the United States today. If Shiller is right, today’s CAPE value is scary. It is a national scandal that we have as a nation permitted the CAPE value to get so high by failing to discuss the far-reaching implications of Shiller’s Nobel-prize-winning research.

    Rob

  21. “ They are not all the same”

    Again, point out what’s new. Look at the last three years, for example. What new information did you provide or original insight? Just give one example.

  22. Every column that I have written is an example. The Buy-and-Holder today outnumber the Valuation-Informed Indexers by a factor of 10 to 1. For every article pointing out the dangers of failing to engage in market timing, there are many more coming at things from the opposite direction. We need to have many people doing what I am doing if we are going to get that CAPE value down. That’s why I say that we need to open ever internet site to honest posting. It’s the only way that we are ever going to make Valuation-Informed Indexing the dominant model for understanding how stock investing works.

    My sincere take.

    Rob

  23. So you have no new insights and it’s just a rehash if the same old lines. Would you allow a buy and holder to come on your website and just rehash the same old lines on his topic?

  24. That’s what you Goons do, Anonymous. We only disagree on one point. I say that market timing (price discipline!) is always 100 percent required. You say that it doesn’t work. You make the same points over and over again. It’s monotonous.

    I permit you to post here because there are occasions where some legitimate points get through. Things would be 10,000 times more efficient if you posted with good intent. But even with bad intent, there are occasions when something worth hearing is said. I think it is worth wading through all the garbage to gain access to the small amounts of gold.

    I think that we should be allowing honest posting at every site. There would certainly be difference of opinion if we did that. But there would never be any need for nastiness. The Buy-and-Holders should say what they believe and the Valuation-Informed Indexers should say what they believe. Over time, they would find point of common ground.

    Yes, there would be some repetition. That’s how it is in any field. That should not surprise anyone. The key is that we should not prohibit posting based on research that only became available in recent decades. If you ban the discussion of all research that came out after Buy-and-Hold was developed, you make it impossible for knowledge of the subject matter ever to advance. Advances are good. We all benefit from advances. So I would permit honest posting re all the research at every site.

    My best wishes.

    Rob

  25. “ That’s what you Goons do, Anonymous. ”

    Wrong. Go look at the Bogleheads forum, as an example. Over 90% of the threads are new topics. You now admit you are just rehashing the same things and you have nothing new, yet you can’t find time to work a job.

  26. There are many topics discussed at Bogleheads. But every discussion is rooted in the premise that market timing is not required. That means that, if Shiller’s Nobel-prize-winning research is legitimate research, every claim made at that board is in error. You can’t ever get anything right if you get that fundamental reality wrong.

    Say that you had a crazy math teacher who taught you that the way to add a series of numbers if to first drop the last one and then add together the others. So 2 plus 3 plus 5 equals 5. How do you think you would do on the SATs.

    If irrational exuberance is a real thing, it must be taken into consideration in every investing calculation that is done. You can’t get safe withdrawal rates right without doing that. You can’t get asset allocation right. You can’t understand what causes economic crises without that. It’s impossible to get anything right if you miss on something so fundamental.

    That’s my sincere take re this terribly important matter, in any event.

    Rob

  27. “ There are many topics discussed at Bogleheads. But every discussion is rooted in the premise that market timing is not required. That means that, if Shiller’s Nobel-prize-winning research is legitimate research, every claim made at that board is in error. You can’t ever get anything right if you get that fundamental reality wrong.”

    So you acknowledge that other boards do have new content, but you do not and then you just double down on your repeated lies about what Shiller really says. Meanwhile, it just right back to the point that you haven’t done anything new, yet can’t give a good reason for avoiding work.

  28. The “idea” that market timing isn’t required dates back to 1965. Valuation-Informed Indexing is newer than that. Shiller published his Nobel-prize-winning research in 1981.

    Rob

  29. So you want to hijack other people’s boards to repeat and repeat and repeat all the same stuff you have done for the last 20 years while just ignoring what people have told you for the same timeframe. At the same time you want us to believe that you have no time for a job because of a book that contains repeats that you have worked on for more than 3 years. Really???

  30. The study should have been corrected within 24 hours of the moment that Greaney became aware of the error he made in it, Anonymous. The rest is just words. If you can’t get the numbers in retirement studies right, you need a new model for understanding how stock investing works.

    That’s my sincere take, in any event.

    My best wishes to you and yours.

    Rob

  31. “ The study should have been corrected within 24 hours of the moment that Greaney became aware of the error he made in it, Anonymous.”

    As said by many, thousands of times, there is no correction needed. This also should not need repeating over and over and over again.

  32. Every day more people are hurt by the error.

    If you consider Greaney a friend (as I d0), you should want him to correct the study immediately. I have been urging him to correct it immediately for 20 years now.

    Rob

  33. “ Every day more people are hurt by the error.”

    The only people hurting by your false claim about Greaney is your family. You have wasted 2 decades on a false premise.