The title of the book “Investment in People” is strange.

I am writing a book titled ‘Investment for People’. That’s a strange title. Every book on investing explains investing for people. It’s absurd to write a book about investing that doesn’t apply to humans. right?

sorry. Before this book, there had been no investment-related books targeting humans. Shiller’s irrational vitality came close. However, he deliberately (and I have to believe it was deliberate; it is difficult to imagine that he could accidentally avoid the most important and controversial issues) avoided addressing the broader methodological implications of his findings in his book.

Shiller walked to the edge of the burning pit but decided not to jump in. I understand why. I have no sympathy for his worries about what would have happened if he had jumped. But I think it’s worth noting that I’m the first person crazy enough to say what I say in my book. When I think about what has happened to me as a result, I wish the universe had chosen someone else for that job.

Humans have emotions. Any book about investing that doesn’t address the reality that our emotions cause us to inappropriately set stock prices ignores the core reality that drives stock investment behavior. Before the buy-and-hold era, there were books that explored the emotional details of investing. But it was buy-and-hold that made the study of stock investing an academic discipline, a science. Those earlier books were valuable. But it was clunky compared to books influenced by the buy-and-hold mentality. The Buy-and-Hold book is sophisticated, but hopelessly misleading because it leaves out more than half the story.

So this is a first. That’s too big a deal for me. Here’s how I think: Someone had to write the foreword to the actual book. The real book will be the one that follows me, the book that will become possible when all Internet sites are opened and honest writing is published. Of course, it won’t be one book. It will be hundreds of books. My goal is to shake things up so people can imagine writing such a book without having to be kicked out of the field before the publication date.

Buy and Hold Produces Wrong Results

The subtitle of my book is ‘How to apply what works on paper to real life.’ Buy and hold ignores valuation effects. So any calculation will give wrong results. You cannot obtain sound guidance by ignoring important factors. Buy and hold ignores valuation because it assumes investors are rational. Investors are human. It is true that rationality can be exercised. But it is also true that they can be very emotional at times. Shiller’s research makes a very obvious and very important point.

We need to know how stock investing works for humans. we do You can’t plan your financial life effectively if you don’t even know the value of your stock portfolio. And there is absolutely no chance we will ever know that until we elect as a society to allow discussion of ideas deemed heretical by our buy-and-hold friends. We can’t discuss among ourselves how things work today. Because if we do, we’ll learn important things our buy-and-hold friends never told us, and it’ll look bad.

You are human. I am human. If buyers and holders can’t deal with this reality, we need to get away from them. They are smart. Once they’ve taken about 500 tranquilizers, we’ll be happy to invite them back to the party.

Scott Burns, after initially being enthusiastic about my idea of ​​a safe withdrawal rate, flipped out and said my project would be “catastrophically counterproductive.” I didn’t agree, of course, but I liked the way he expressed his thoughts. The word “catastrophe” suggests that he recognized how much danger was at stake. My answer was that I believed my efforts would be catastrophically productive. As a society, we are on the verge of changing the world of investment advice as we know it, and I think that’s okay.

How stock investing really works

That’s interesting. If my book achieves what I intend, humans will learn for the first time how stock investing works in the real world. Again, I don’t just mean what’s on the pages of the book. I hope that stuff shows up. I’m doing my best. But the real purpose is to get people thinking, to bury long-discredited doctrines 50 feet in the ground, so that we can all use our intelligence to develop better and richer ideas. Mark Twain said that what hurts him is not what he doesn’t know, but what he knows for certain that he doesn’t. Buy-and-Holders knows a lot of things that don’t. If I get rid of that pile of junk, I’ll be greatly increasing the world’s knowledge on the subject, even if none of the how-to advice I give can be scrutinized.

There is an expression that I sometimes use. I said that the same laws that apply to all fields of human activity except the field of investment advisory should apply to the field of investment advisory. Makes sense, right? I see it as an interesting change. Allowing progress over time has worked in many areas of human endeavor. I believe it makes sense globally to allow developments in the investment advice sector as well. The words ‘I’, ‘past’ and ‘wrong’ are powerfully liberating words.

The joke in the title of my book is a deadly serious joke. Because if we don’t make this huge leap forward, the buy-and-hold monster could create a “game over” situation for both our economic and political systems. A few days after the buy-and-hold crisis of 1929, we have reached higher CAPE levels than ever before in this runaway bull market.

It’s so weird to say that this would be the first book that would teach you how to invest if you were human. The first time that person came to mind, I knew I had found my title. It’s outrageous and provocative, but it’s true! And, of course, the fact that we have for many years prohibited people working in this field from considering the human element is very scary. Hey!

I am a child of the 60s. The Beatles told us what to do. Take it out and bring it in. Get started. What you’re going to do here is take a sad song and make it better.

Rob’s bio is here.