The following is in response to our article, Debunking Ken Fisher, which appeared two weeks ago:
It took leaving the country to get off his marketing lists. His marketing staff does quite well financially. However, I could not find a single investor that could substantiate making a profitable long-term investment with him, earning more than that of a Vanguard fund. His fees were outlandish, and I have no idea as to the churning costs he incurs, and the stocks given me by him to follow did no better than a global fund index at lesser fees and greater liquidity. I could find no one to substantiate how costly it would be to leave his fund during the last downturn when he was advocating buy-and-hold. Throw in tax consequences, and I could not in good conscience use his services.
All funds are Ponzi-esque. When Fisher discusses the obvious, casting the Ponzi mantra at others, he is preaching to his choir and sucking in newbie investors. I have yet to see the net-net 'provable' financial results from Fisher.
Happy New Year,
The following is in response to the article,Return Distributions and the Shiller P/E Ratio, by Keith C. Goddard, which originally appeared on February 2, 2010 and was contained in your section The Ten Best Articles You Probably Missed on December 28.
This article makes the point that one should time one’s investment in the market depending on the level of the Shiller P/E Ratio. The article shows that when the P/E Ratio is at 11.54 or less the returns are superior to what one would achieve if one invested when the P/E Ratio is higher.
Although this advice is theoretically correct it is not practical. If one has to wait until the Shiller P/E Ratio is below 11.54 before investing in the market, then one may have to wait for a long time. The last time when the Shiller P/E Ratio was at or below this level was between 1974 and 1985. See figure 1 for details.
More recently, during March 2009, the Shiller P/E Ratio was at 13.32 and provided a good signal for entering the market. This was 24 years after the 1985 signal. Given this history, the next low of the Shiller P/E Ratio might not be for another 20 or more years. Investors relying on this signal will have to be very patient.
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