“Wade Pfau Is Lying. I Have Zero Doubt About That. The Thing That Is Killing Jack Bogle’s Reputation Is the Cover-Up, Just As It Was the Cover-Up of Watergate That Did Damage to Richard Nixon’s Reputation Rather Than the Crime Itself. I View My Friend Jack Bogle’s Destruction of Jack Bogle’s Reputation As a Tragic Event.”

Set forth below is the text of a comment that I recently put to another blog entry at this site:


Help me out here. If we look at the old thread, John answered your questions. Eventually, you said you finally understood and then issued an apology. Are you now saying you were lying back then? Wade also said the question was answered within 82 minutes after your question. Are you saying that Wade was lying?

Thank you for asking an intelligent question, Anonymous. This one gets right to the heart of things.

I still today have a fairly strong recall of the things that were going through my head on the night when I posted my apology. I was not lying.

When I put the May 13, 2002, post forward, I was not certain I was right. I had a high confidence level. I would put it at 90 percent. I knew that the post was going to cause a commotion. So I went over things several times before posting. Each time I did, I was reassured. So I had a high confidence level. But I did not have confidence of 100 percent. I think what made me have doubts is that no one else had ever said the studies were invalid. There were lots of smart people who believed in them. That gave me pause. But I went over things again and again in my mind and things always turned out the same. So I finally did push the button.

The reaction was extreme in both directions. There were people saying that this was a breakthrough, the best discussion that we had ever had at that board. And there were people saying that I should burn in hell for what I had done. As a general rule, this made me more confident that I was right. The fact that the people defending the study could not control their emotions told me that they were probably in the wrong. But these were people I respected and people whom I considered my friends. And they were talking as if they were very sure of themselves. So their reactions did give me pause.

There were elements of the story that I did not understand in those days. I knew enough to say that the studies were in error. But I didn’t know much of the background. I didn’t understand how the errors came to be made. I was able to follow a logic chain showing that I was right. But there was all this crazy emotion surrounding the issue that was putting doubts in my mind. The doubts were not rooted in logic or in human reason. But us humans are not purely rational creatures. We are social creatures and what our friends say influences what we think. The stuff I was hearing was shaking my confidence a bit. But I couldn’t come up with any logical reason for thinking that I was wrong.

I wasn’t just concerned about myself getting something right or wrong. I was the leader of the board and I cared about it deeply. That board was years ahead of its time. There was information available at that board that was not available in the largest personal finance libraries in the world. So I was very protective of the board and sickened by the thought that I might have done something to cause harm to come to it. So on the night that I put up that apology, I was looking for some way to defuse things. So long as the board remained functioning, I was confident that we could bring things to a good place.

Prometheus put up some point that made sense to me. I don’t recall today what it was. But I sincerely believed at the time that the point that he made showed me to be wrong on a small, technical point. I don’t believe that today (I don’t even recall what his point was today) but at the time I was able to convince myself that I really had gotten something wrong. I felt that that was enough to justify an apology. And I hate it when people (usually politicians) put forward apologies that are not really apologies. If I was going to apologize, I was going to do so clearly and without reservation. So I put forward the words that you have quoted.

I stated the apology more strongly than I believed it. But it was not a lie. I did sincerely believe that I had gotten an element of the story wrong and, given the damage that was being done to the board, I believed that that called for a no-reservations apology. I figured that, if I really were right about other elements of the story (as I believed I was), that that would all come out in subsequent discussions and all would be well. My top priority was protecting the board.

The apology was not a lie. It was overstated. So you could say that it was not 100 percent honest. But the purpose of the small amounts of dishonesty that were present in those words was to soothe ruffled feathers so that over time we could all work together to bring things to a better place. If I had it to do over, I would not have written the apology as strong as I did. But I still would have written it. I had sincere doubts at that moment and this was too important an issue for me to cover up those doubts. My fellow community members needed to know that the person who had brought this controversy to the table was experiencing sincere doubts about at least some of it. I think the apology was a good thing, perhaps not executed perfectly (and that the lack of perfect execution can be excused by the crazy, emotion-filled circumstances).

Wade is lying. I have zero doubt about. He certainly does not believe that Greaney answered any questions to any reasonable person’s satisfaction. He expressed complete and utter disdain for the tactics employed by the Lindauerheads and the Greaney Goons on numerous occasions during our 16 months of correspondence. There is zero chance that he believes the words he put forward in the post in which he praised Greaney for the role he played. Those words were almost certainly dictated by Greaney. Wade posted them in his name because that’s what you Goons insisted on as the price for not destroying his career. Whether Bogle was in on the discussions that led to that deal I do not know for certain. If it is determined after he is questioned under oath that he was, that’s financial fraud, that’s a felony, that’s prison time.

Wade is certainly guilty of financial fraud in an objective sense. I see it as a more complicated question as to whether he will be prosecuted or not. Wade obviously did not want to commit financial fraud for any selfish reason. He is very proud of the wonderful work he did with me. He showed courage in trying to stand up to you Goons for a time in an effort to get the word out to the millions of middle-class workers who very, very, very much need to know about it. He has two small children for whom he is financially responsible. When he saw that Bogle was not willing to speak up and Bernstein was not willing to speak up and Swedroe was not willing to speak up, he came to possess a sincere belief that you Goons could make it impossible for him to earn a living in the field in which he had spent many years of hard work gaining expertise. He truly had a gun to his head. That obviously doesn’t excuse the behavior. But it is equally obvious that there are mitigating circumstances here and that a prosecutor needs to take those circumstances into consideration when deciding whether to bring a case and that, if a case is brought, the jury will need to take those circumstances into consideration as well.

Wade does not possess a complete understanding of Valuation-Informed Indexing. He is strong on lots of important points. But he hasn’t put the entire thing together in his head. So he does rationalize. I think he tells himself that we will not end up in the Second Great Depression regardless of whether we open the internet up to honest posting or not. I think he would pass a lie detector test on that point. Again, that doesn’t excuse the behavior. But it puts it in a different context than it would be in if this were not so.

I believe the same of Bogle. I believe that Bogle rationalizes. I believe he tells himself that we will all get through this somehow even if he does not acknowledge the errors that he so obviously (to someone who is looking at things objectively) made. I believe he suffers from cognitive dissonance (as does Wade, to a lesser extent). I believe that he feels it would be a terrible thing if people found about the mistakes he has made and about the huge amounts of energy he has exerted to cover them up for so many years. I think he is wrong about that. I think that the vast majority of people would have forgiven the mistakes in two seconds had he come clean. I think that the thing that is killing his reputation is the cover-up, just as it was the cover-up of Watergate that did damage to Richard Nixon’s reputation rather than the crime itself. I view my friend Jack Bogle’s destruction of Jack Bogle’s reputation as a tragic event. I also view it as tragic that so few of the people who claim to be his friends have been brave enough to step forward and try to help him out in a moment in which he obviously is in great need of help.

I believe that you Goons follow Buy-and-Hold strategies. To that extent, you are sincere in the things you say. I don’t believe for two seconds that you are sincere when you say that I am on meds or that I stalk women or that the 200 quotes offered in praise of my word at the “People Are Talking” section of this site are not real or re any of the other garbage you post on daily basis as part of your effort to intimidate anyone who posts honestly on these matters. I believe you will go to prison following the next crash. But I believe that it is important that the millions of middle-class people whose lives have been destroyed by the 12-year cover-up not give in to desires for retribution. Prison sentences make sense as a way for society to give voice to its core belief that certain types of behavior cannot be tolerated among civilized people. But we need to keep in mind the circumstances that apply re you Goons as much as we need to keep in mind the circumstances that apply re Wade and Jack. And we always need to remember that it is love that we all deep in our hearts want to see win the day here, not hate.

I think that covers most of what you asked, Anonymous. Have you ever seen the movie Rashomon? People see things from different perspective because they have lived through different sets of life circumstances and possess different personality types. I don’t think it is a good idea to be too quick to label something a “lie” just because it evidences a surface contradiction. You can learn something by trying to understand what is going on below the surface and then trying to made sense of why the contradiction surfaced. There are grays in this world, not just blacks and whites.

I hope that helps a bit, in any event.


“If You Asked My Father Whether Buy-and-Hold Worked for Him, He Would Answer “Yes!” I See That As a Misperception on His Part.”

Set forth below is the text of a comment that I recently posted to another blog entry at this site:

It worked for me.
It worked for my father, who has since passed on.
If I am correct in what I have read from you (and I literally BEG you to correct me if I am in error) it worked for YOUR father, too Rob!

So that’s three independent proofs that your nutty claim is wrong, from right off the top of my head, and of course I only needed one to do the job, anyway. End of argument.

If you asked my father whether Buy-and-Hold worked for him, he would answer: “Yes!” I think that much is fair to say, Anonymous.

I see that as a misperception on his part. Buy-and-Hold ALWAYS causes an economic collapse. It is a logical impossibility that persuading millions of investors to fail to exercise price discipline could produce any other result. And, sure enough, my father experienced an economic collapse during his investing lifetime (as does every Buy-and-Holder who lives long enough to invest for more than 40 years — and that’s all of them except for the ones who die early deaths). My father was too young to invest in the collapse of the 1930s. So he missed that one. He died shortly prior to the 2008 collapse. But he had to endure the stagflation of the 1970s, which was brought on by the overvaluation of the 1960s (which was made possible by the popularity of an “idea” that was pushed heavily at the time that there is no need for investors to lower their stock allocations in response to big valuation shifts — sound familiar?)

Few investors blame Buy-and-Hold for today’s economic crisis, Anonymous. That’s because discussion of the role played by Buy-and-Hold is prohibited on the internet. If we gave ourselves permission to discuss these things openly and clearly and frankly, we would all see it. The evidence is overwhelming.

That economic collapse hurt my father’s portfolio in a very serious way. Just as the economic crisis we are living through today is hurting all of today’s investors in a very serious way.

How do the Buy-and-Holders get off the hook for all the damage their “strategy” causes for millions? They blame The Economy. It’s all that darn Economy’s fault! Bad, bad Economy!

It’s always something, isn’t it?

The reality is that no one should be even a tiny bit surprised to see the economy collapse when $12 trillion of spending power goes “Poof!” And those who are familiar with the findings of the last 32 years of peer-reviewed academic research in this field knew in 2000 that we were going to see that much spending power disappear from our economy by the end of the first decade of the 21st Century. That’s why Shiller was able to predict an economic crisis that did not take place until September 2008 in a book published in March 2000.

Buy-and-Hold hurt my father big time. He didn’t know it. But that doesn’t mean that the hurt was not real.

My father had an excuse for not knowing what caused him to suffer those losses. Shiller didn’t publish his research until 1981 and most of the “experts” in this field have not yet seen fit to share with the millions of middle-class workers their analyses of the implications of Shiller’s “revolutionary” (his word) findings.

What’s your excuse, Anonymous?

And, more important than that, what’s Bogle’s excuse?

I say it. I don’t hold back. Can Bogle say that?

I think it would be fair to say that Old Saint Jack owes your father and my father and their sons and daughters an explanation for his poor behavior re this matter.

The Buy-and-Hold “idea” (that there is something special about stocks that makes them the one thing you can buy without being concerned about the price you pay) has caused an awful lot of people an awful lot of pain. Once upon a time, we didn’t know this. So it would be fair to say that it was just one of those things. Since 1981, we have “known” (intellectually if not emotionally). When are we going to get about the business of Taking Some Steps to set things right?


“Lindaurer Asks Bogle to Bark and Jack Barks and Then Looks Up With Pleading Eyes Asking the Master Whether He Has Barked Loud Enough to Be Spared a Whipping This Time.”

Set forth below is the text of a comment that I recently put to another blog entry at this site:

John Bogle is an 84 year old grandfather. He has suffered poor health for years, and has had a heart transplant. He still maintains a completely positive attitude towards life, but openly acknowledges that his remaining days are numbered. He was a child of the hard-scrabble depression. He put himself through College at night. He is a man who has made huge mistakes in his youth, and in his career, and owned up to them — even offered them up as counter-examples for others to avoid. By 1974, he had built Vanguard into the second largest mutual fund company in history. He has written about a dozen highly successful books, has lectured, and is nearly universally revered among anyone familiar with him, even those tiny few who might disagree with his basic premises (not very many of those around). History, data, analysis, and the most recent developments in Behavioral Finance all tend to endorse the general surmises and approaches and investing advice that he developed for individual investors, starting way back in the fifties. He has received numerous awards and acknowledgements from a variety of stalwart institutions of academia and industry over the years. Even at his advanced age, long past retirement, he continues to volunteer and to serve and to speak, ONLY for the general benefit of the ‘common man’, not for honorarium, or fame. He is a plain spoken, and a simple man. A truthful man. One of his universal themes has always been to support the individual investor and his quest for security, not to build personal wealth, fame, or some corporate giant, out to optimize profits at the expense of investors and customers.

Given who HE is, I sincerely doubt that he is at this point ‘afraid’ of anything. Anything at all. So he would certainly not be afraid of some little pipsqueak liar on the intertubes who he had never heard of, or if he had, took minimal notice of, after rapidly establishing that he was dealing with a QUACK.

Rob, you should be deeply ashamed of yourself.

Is he truthful about Mel Linduaer, Anonymous?

Richard Nixon did many great things in the course of his lifetime. What is he most remembered for today? A reputation is as strong as its weakest link. Jack’s knowledge of the Lindauer matter is documented.

You talk the “I Love Jack Bogle” talk. I walk the “I Love Jack Bogle” walk.

It was years ago when I first advised my good friend to disassociate himself in every way, shape and form possible from the sorts of individuals who have put forward posts in “defense” of Mel Linduaer and John Greaney. I’ve noticed that you have held back, waiting for it to become safe to do so. Some friend.

By correcting Jack’s errors, I have taken Buy-and-Hold to places he never dreamed of being able to take it. No apologies. That’s the job.

And by speaking out in opposition to Linduaer and Greaney I have put myself in circumstances where I can defend Jack’s work following the next price crash, something that none of those who were too afraid to speak out can do effectively.

Mel Linduaer is an internet goon, a nothingburger. My good friend Jack has been responsible for 90 percent of the “fame” that Linduaer enjoys today. I somehow find it hard to believe that Linduaer would have a column at Forbes if it hadn’t been for Jack’s recommendation.

Linduaer thanks him by dragging his reputation through the mud. He thanks him by telling him he had better behave or Mel will sic his Goons on him.

Jack has real accomplishments to his name. Linduaer is an internet Goon extraordinaire. Because he has shown repeatedly a depraved indifference to human life possessed by few, he tells Jack to roll over and Jack rolls over. Linduaer asks Bogle to bark and Jack barks and then looks up with pleading eyes asking the Master whether he has barked loud enough to be spared a whipping this time.


I respect Jack for the days in which he was not ashamed of his humanity, the days in which he wrote in his book that he would want his friends to tell him about any mistakes he made that caused millions of middle-class workers to suffer grave financial harm.

One of the two of us should be feeling deep shame, Anonynous. I think it would be fair to say that much.

Mel Linduaer demanded that I be BANNED FOR LIFE from both Morningstar.com and the Bogleheads Forum. I’d be grateful for anything you could do to spread the word all across the internet.

My best and warmest wishes to you and yours.


VII #176 — Valuation-Informed Indexers Don’t Have Good or Bad Years — We Measure Success Over 10-Year Time-Periods

I’ve posted Entry #176 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Valuation-Informed Indexers Don’t Have Good or Bad Years — We Measure Success Over 10-Year Time-Periods.

Juicy Excerpt: If you went through the 140 years of historical return data to determine how many years Buy-and-Holders did better for the year and how many years Valuation-Informed Indexers did better for the year, the Buy-and-Holders would be shown to have more victories. The trouble is, you can have better years 60 or 70 or even 80 percent of the time and still end up behind at the end of your investing lifetime.

“The Reason My Stuff Is So Overpowering Is That We Don’t Have Thousands of People Promoting True Research-Based Strategies Today. Is That My Fault? When Everyone Else in the Investing Advice Field Is Aiming to Give Honest Advice, I Will No Longer Stand Out.”

Set forth below is the text of a comment that I recently posted to another blog entry at this site:

I think he meant your behavior was overpowering which is a turnoff

I don’t think you are so terribly far off the mark with this, Laugh.

My stuff IS overpowering. I get that.

I am the person who discovered the errors in the Old School safe withdrawal rate studies. I have over 200 endorsements of my work in the slider at the top of every page of my site, some from the biggest names in the field. No other blogger has anything even close to that. I have 5 unique calculators, each of which changes our understanding of how stock investing works in a fundamental way. I am the co-author of the most important piece of research published in this field in the past 30 years, research that shows millions of middle-class investors how to reduce the risk of stock investing by 70 percent. I have 200 podcasts that explore the realities of stock investing from every possible angle. And on and on and on and on and on.

Now THAT’s overpowering.

The odd thing here is that J.D. (and lots of others, to be sure) sees something bad about that. Valuation-Informed Indexing is Jack Bogle’s dream come true. It is the first true research-based strategy. We are looking at good stuff piled on top of good stuff piled on top of good stuff. What the heck is the problem?

The problem is that J.D. has lots of blogger friends who have recommend Buy-and-Hold strategies. It makes those people look bad for millions of middle-class investors to learn what really works. That’s the problem here, Laugh. It’s a turf fight. In ordinary circumstances, J.D. would want to help his readers. But his friends in the blogging community will hate him if he tells the truth. So I have put him (and lots of others, to be sure) in a tough spot. That’s why in this particular case “overpowering” stuff has a negative side to it in the eyes of many. It’s a turf fight, nothing more and nothing less.

Now –

Say that we were all 100 percent cynical people and we didn’t give a darn for whether the lives of millions of people were destroyed or not, all we cared about was making a buck. Would I be a true friend to my Buy-and-Hold pals if I kept everything hushed up?

I would not.

The cover-up cannot continue much longer. The total losses from the Buy-and-Hold Crisis will end up being in excess of $20 trillion. No economic system can survive that big a loss. So we are all going down together if we don’t work up the courage to correct the mistakes that the Buy-and-Holders made. We are ALL winners from having those mistakes corrected.

The mistakes are going to be corrected whether the Buy-and-Holders like the idea or not. Given that the mistakes are going to be corrected, why not just correct them now, when the embarrassment factor for the Buy-and-Holders is a lot less than it will be following the next price crash? That sure sounds like a good idea to me.

The other way to look at it is to consider the opportunities that follow from opening the internet up to honest posting on investment-related topics. We are going to see hundreds of super-successful blogs once people feel safe posting honestly. We are going to see tens of thousands of helpful books published. We are going to see thousands of people establishing successful careers HELPING investors with honest, research-based advice rather than destroying their lives with more of the smelly Buy-and-Hold garbage.

How do you hold that back indefinitely, Laugh? You can’t. If you cannot hold it back indefinitely, you are better off just making the move to the research -based stuff now, before you do yourself more harm. If you’ve got to make the change, make it now, for heaven’s sake! It’s not going to get easier after you cause more human devastation.

The reason my stuff is so overpowering is that we don’t have thousands of people promoting true research-based strategies today. Is that my fault? There is only one way to get from where we are today to where we all want to be tomorrow. My stuff is shocking because people have been afraid to tell the truth and thereby alienate the people pushing Buy-and-Hold. Lift the ban on honest posting and you will have thousands of people promoting Valuation-Informed Indexing all over the internet. No more surprise! No more shock! No more “overpowering”!

The first guy who works up the courage to tell the truth about something as important as stock investing is going to be perceived as “overpowering,” Laugh. There’s no getting around it. You know what the answer is? We all should be working TOGETHER to tell people the truth about stock investing. YOU could build a business telling the truth about stock investing. J.D. could build a business telling the truth about stock investing. Jack Bogle could build a business telling the truth about stock investing. When we are all doing it, there will no longer be anything overpowering or odd or special about it. When everyone else in the investing advice field is aiming to give honest advice, I WILL NO LONGER STAND OUT.

My stuff is as overpowering as all get out. All I intend is for it to be honest. The reason why my stuff stands out so much is that just about everyone else in this field is AFRAID to give honest advice. How about we try holding back a bit on the death threats and the unjustified board bannings and the tens of thousands of acts of defamation and the threats to get academic researchers fired from their jobs? Then we will have thousands of people putting forward honest stuff and my stuff will not stand out so much and I will no longer be perceived as being so darn “overpowering.”

Does all that not make good sense?


“Do You Want Bogle to Give That Speech? Until Now, You Have Not Been Willing to Help. The Answer Is Not to Continue to Try to Cover Things Up. The Answer Is to Get Everything Out in the Open.”

Set forth below is the text of a comment that I recently put to the discussion of another blog entry at this site:

I think there may be something to what you are saying here, Pink. J.D. likes me. We are friends. But, when I asked him to get involved to bring the Ban on Honest Posting to an end, he declined to get involved. There’s got to be some reason for that. He’s not at all a bad guy. I think he is a great guy and everyone else I have spoken to feels the same. So there is certainly something odd going on here. I think it is entirely possible that part of what he is trying to convey when he says that my arguments are “overpowering” is that I am too verbose. Maybe what he is trying to say is “you’re just too much, people cannot handle it.”

You are also right that it is off-putting to a lot of people when I put forward long posts. That’s been so going back to the first day. That’s a real issue.

I strongly disagree with your other points — that it would be possible for me to make my points effectively in a single, simple paragraph and that I take things out of context.

Perhaps you feel that I take things out of context. I think it is likely that you genuinely have that feeling. I can assure you that there is ZERO desire on my part to take anything out of context. I write long posts. I go into background and that sort of thing. But never have I put forward a single word with the aim of distracting people from the real issues. I RESPECT the people who challenge my views. I SHOW that respect by taking their challenges seriously. That’s part of the explanation of the long posts. I take the time to write long responses because I CARE. If you go to the trouble to give voice to some concern you have, I feel that I owe it to you to do all in my power to see that that concern is addressed. Never in a million years would I intentionally take something out of context. That would be a mortal sin in my book. It may well be that you perceive it that way. It is my belief that you really do. But that is not what is in my heart.

Why are the posts so long? That’s an issue that very much needs to be examined by people of good faith.

There are millions of people who today believe in Buy-and-Hold. They have been talking about and following the strategy for 40 years now. The core Buy-and-Hold beliefs have been repeated over and over and over again. When you say “timing doesn’t work.” you don’t need to offer any explanation of why you said it because the vast majority of the people reading the words already believes that. So you can indeed make your points in a single, simple paragraph.

That’s not the case for me or for other Valuation-Informed Indexers. When I say “long-term timing always works and always is 100 percent required for those hoping to have some realistic hope of long-term success,” the reaction of the vast majority of my readers is to have lots of questions. If this is so, why haven’t we heard about it from lots of people long before this? That’s the biggest question. If I am to have any hope of convincing those people of the merit of my case, I MUST give the background. I MUST explain how it came to be that 32 years have passed since Shiller published his peer-reviewed academic research showing that there is zero chance that a Buy-and-Hold strategy can ever work for even a single long-term investor and that Buy-and-Hold remains the dominant strategy to this day. The realities that we all face today do not permit me to make my case effectively with responses of just a few words. I must provide background and context or fail in the important work that I do in getting word out about the first true research-based strategy to the millions of middle-class investors who very, very much need to know about it.

There are ways that things could be set up so that I could write shorter posts. One that I mention all the time is that Bogle could give an “I Was Wrong” speech. When Bogle gives that speech, it is going to be written up everywhere. There will be a national debate on these questions. And then people will know what I am getting at when I say something like “long-term timing always works and is always required.” Once that national debate begins, my job gets a lot easier. I can still post and share my thoughts. But I no longer will need to carry the burden of being the only person talking straight to people about this stuff.

Do you want Bogle to give that speech? Are you willing to help me persuade Bogle to give that speech?

Until now, you have not been willing to help. That’s why the ugly stuff continues.

The answer here is not to continue to try to cover things up. The answer is to get everything out in the open. Then the need for long posts disappears.

Say that you believe in Buy-and-Hold 100 percent. If that’s so, then it follows that you should believe that Buy-and-Hold can withstand the challenges that will be put to it in a national debate. If Buy-and-Hold withstands the challenges, confidence in it will be stronger than ever before. So there is no possible way that a national debate could produce a negative result for you. Either you end up switching to a strategy that permits you to retire many years sooner or you are affirmed in your confidence in the strategy you believe in today. Having the national debate is a win/win/win/win/win.

And I will never again need to put forward a long post after we have the national debate because everyone reading my words will “get it” when I say something like “long-term timing always works” or “it’s not possible to identify the safe withdrawal rate without taking into consideration the valuation level that applies on the day the retirement begins” or “stocks today are a virtually risk-free asset class for those who are informed about the last 32 years of peer-reviewed academic research in this field.”

Long posts shouldn’t be necessary. But they are because of the unusual circumstances that apply in the investing field today. As a society we once believed that Buy-and-Hold worked. Now doubts are growing. But to get people to convert from Buy-and-Hold to Valuation-Informed Indexing, we must explain to them what happened, why it is that so many experts still advocate Buy-and-Hold 32 years after the research was published discrediting it? We need to stop trying to suppress discussion and instead ENCOURAGE it. We need everyone (Buy-and-Holders and Valuation-Informed Indexers alike) giving voice to their SINCERE beliefs about how stock investing works. In cases in which experts have come over time to believe that they made mistakes re certain points, they need to SAY THAT in clear and certain and simple terms so that we can all process the message and move forward in a mutual Learning Experience.

We ALL want to learn, Pink. That’s why we all are here. We all need to pull together to insure that this wonderful and important Learning Experience moves forward. We do that by changing the tone. You need to drop the Goon pose and work up the courage to say “Thank you!” to the fellow who brought these issues to the table on the morning of May 13, 2002, and thereby opened up the opportunity to learn things about stock investing that you never knew before and that make your life richer in scores of different and important ways.

I am 100 percent happy to begin today working with you to take this to a very positive place, Pink.

Can you grasp the hand of kindness this time?

Or will you fire back with more of your Goon sludge, sinking ever deeper in the negativity that in earlier days you have brought to the table again and again and again.

Greaney’s retirement study does not contain an adjustment for the valuations level that applies on the day the retirement begins. That is a stone cold objective fact.


Until we answer that question, our work here is not done. I have put forward hundreds of thousands of long posts explaining why I believe he made that mistake. What’s your take? Do you agree with the explanations that I have advanced or is there some point re which you have a somewhat different take? And, if you have a somewhat different take, are you capable of giving voice to it according to the posting rules that you agreed to follow when you were first permitted to participate in any of our discussions?

My best and warmest wishes to you and yours, my old friend.



“For 11 Years Now, We Have Been Seeing Emotions Evidence Themselves, Often in Very Juvenile and Destructive Ways. That’s an Investing Issue. Investor Emotions Are an Investing Issue.”

Set forth below is the text of a comment that I recently put to the Investor Junkie blog:


I approve comments that make legit counterpoints. I do not know the full history with Early Retirement Forum, nor do I personally care.

His comment is a legit question (though the personal attack is not). If the commentator does not keep it on topic, he will be banned and comments removed (same applies to you also).

Otherwise I do not moderate and allow each to have their own opinion.

I agree with you that the Goons sometimes ask legitimate questions, Larry. If you look at my blog , you will see that I permit the Goons to post there. A LOT. One of the reasons is that they do sometimes present legitimate questions that we all can learn from (especially me — I obviously need to hear challenges to my thinking). I have two hour-long podcasts at my site that were inspired by questions posed by the Goons.

The Goons really do follow Buy-and-Hold strategies. They post lots of insincere stuff. But they do themselves follow the strategies they recommend to others. That’s one test of sincerity.

So it is not my position that the Goons should not be permitted to participate in discussions in any way, shape or form. They are part of what it going on and to fully understand all of what is going on, we need to understand what drives the Goons. That’s part of the story.

All that said, I think there is a problem if no one comments on their tactics. That fellow at Early Retirement Forum deserved to be able to engage in civil and reasoned discussion. We all miss out when the board is intimidated by a few insanely nasty personalities. I DO care greatly about the Early Retirement Forum. I spent years of my life building it up. There are hundreds of wonderful people there who would like to be having very different sorts of discussions. That board was once a great learning resource for everyone in the Retire Early Community and it is obviously not that today and that is a very, very unfortunate reality in my assessment.

My sense is that you are saying that you don’t want to be the one to comment on these sorts of things because you are the site owner and moderator here. That makes some sense. I hope others will feel encouraged to comment on these process issues. There have been thousands of people who have expressed a desire that honest posting be permitted. I have spoken to lots of professionals in this field who would like to talk openly about their real beliefs about how stock investing works but who do not feel safe doing so because of what they have seen from the Goons. The economic crisis hurts us all. So we are all being hurt by the reluctance of these many smart people to speak out.

The overlying reality here is is that we are in the transition years from Buy-and-Hold to Valuation-Informed Indexing. All of the evidence now goes in one direction. But it has been difficult to make this change because lots of smart people once really believed in Buy-and-Hold and those people built careers around their promotion of it. The tactics we see from the Goons reveal the desperate nature of the effort to “defend” Buy-and-Hold at this late date, over 30 years from the day the peer-reviewed research discrediting it was published. It may be that you should not comment on these issues in this thread but I very much think it would be a plus if you commented on them in a separate article at some later date. The process issue here is a big issue.

The difference between Buy-and-Hold and Valuation-Informed Indexing is that Buy-and-Hoid ignores investor emotion while Valuation-Informed Indexing takes investor emotion into account. Part of the transition we need to make as a society is in coming to understand that we must talk openly about not just the numbers of investing but also the emotions of investing. Pretty much all of us are uncomfortable about it today because with Buy-and-Hold emotions were just presumed not to matter. For 11 years now, we have been seeing emotions evidence themselves, often in very juvenile and destructive ways. That’s an investing issue. Investor emotions are an investing issue. It wouldn’t be too much of an exaggeration for me to say that that is the core point of the entire VII project.

Anyway, I am grateful to Miranda for conducting the interview and writing it up and to you for hosting her article. Anything that gets these ideas out before more people is a plus. If there are any others who would like to comment on the emotionalism we have been seeing from our Goon friends, I hope that they will feel encouraged to speak up. When they put it on display at a public forum, it becomes a legitimate issue for all of us to comment on.


“The First Comment at the Early Retirement Forum Is By a Guy Who Has an Obvious Interest in Learning About the Subject Matter. The Following Comments Made It Known to Him That He Will Be Ostracized If He Continues to Show Interest in This Important Topic. Do We Approve of that Sort of Behavior in the Personal Finance Blogosphere?”

Set forth below is the text of a comment that I recently posted at the Investor Junkie blog:

I’d like to hear Larry’s and Miranda’s reactions to the comments made about this article at the Goon Central Board and at the Early Retirement Forum. The first comment at the Early Retirement Forum is by a guy who has an obvious interest in learning about the subject matter. The following comments make it known to him that he will be ostracized if he continues to show interest in this important topic.

Do we approve of that sort of behavior in the Personal Finance Blogosphere? Do we feel a responsibility to protect our readers from it?

Kevin Mercandante writes for this site. Kevin recently deleted SCORES of Goon posts from a discussion held at his site. He can explain to anyone who cares to know about it the nature of the problem here.

Joe Taxpaper recently called the Goons out on their nonsense at his site.

As the Buy-and-Hold Crisis worsens, more and more people are reaching the point where they can tolerate no more abusiveness. When we honor the promise we make to ourselves and our readers in the published posting rules that apply at every board and blog, we all will begin moving forward together. This is the most positive story we have seen in personal finance in any of our lifetimes. We make a terrible mistake to let the lowest of the low among us try to turn it into something nasty and dirty.

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


Miranda Marquit Interviews Me for an Interview Published at the Investor Junkie Blog

Miranda Marquit recently posted a Guest Blog Entry at the Investor Junkie blog called How to Invest Using Valuation-Informed Indexing: Interview with Rob Bennett.

Juicy Excerpt: Rob Bennett has been advocating valuation informed indexing for years, and his insistence on it has even had him kicked off investing forums, including the Bogleheads forum. “Buy and hold is intellectually dead,” he says. “It’s not practically dead, since plenty of investors still use the theory, but intellectually it’s been dead for more than 30 years.”

The Goons that meet at Goon Central shared their thoughts re the article here.

The Goons that meet at the Early Retirement Forum shared their thoughts re the article here.


“Lots of People in This Field Understand Where Things Are Heading and Are Making Efforts to Position Themselves for the Post-Crash Period. Kitces Is Doing That. Bernstein Is Doing That. Swedroe Is Doing That. Pfau Is Doing That. Even Bogle Has Come Out With a Good Number of Statements Showing That He Understands the Dangers of Buy-and-Hold.”

Set forth below is the text of a comment that I recently posted to another blog entry at this site:

Why would Wall St make much less money on folks buying bonds then they do stocks?

I don’t think that Wall Street has anything against bonds, Laugh.

It’s the super-safe asset classes that Wall Street doesn’t like. They undersell TIPS, they undersell IBonds, they undersell CDs.

Even there, I don’t think the underselling is motivated primarily by financial considerations. I think there may be some financial considerations. But I don’t see them as the driver.

To make sense of this, you have to understand the history.

The Buy-and-Hold Pioneers are heroes of mine. I’ve said that so many times now that I am getting sick of hearing myself say it. They came up with the idea of rooting one’s investing strategy in the findings of the peer-reviewed academic research. That was a profound advance, a magical advance. It is that advance that makes me love the Buy-and-Holders, that makes me feel that I am one of them.

They made a mistake. It was a perfectly understandable mistake but it was a mistake all the same. They came to believe that “Staying the Course” means staying at the same stock allocation rather than staying at the same risk level. For various reasons, the mistake remained uncorrected for a long period of time. Now people feel that it can never be changed! The feeling is — this mistake we made was so terrible that no one may ever talk about it, all discussion of it must be silenced, we won’t look like Big Shot experts if people learn that we once made a mistake. It’s the failure to correct the mistake that I criticize, not the mistake itself.

Now move forward to today.

Stocks are priced for a 65 percent price crash. The typical middle-class person should have something in the neighborhood of 30 percent of his or her money in stocks. The Buy-and-Holders say that something in the neighborhood of 75 percent stocks is “optimal.” So their numbers are wildly off.

You are asking what the financial incentive is for favoring stocks.

One, there is a financial incentive for selling stocks over things like TIPS or IBonds or CDs. The commissions are generally bigger in stocks. Again, I don’t see this as the driver. But it is a reality that applies.

Two, the experts would need to acknowledge their mistake to advocate bigger non-stock allocations. Their pride is at stake. They don’t want to go there. They are afraid of lawsuits if they acknowledge that they have been giving bad advice for many years now. They worry that they will be drummed out of the field if they offer straight talk when so many others are trying to keep the cover-up going. There is all sorts of nasty stuff going on.

Three, Get Rich Quick sells! This is probably the biggest factor. The way to get your clients to do business with you is to get them to like you. Tell them that their phony bull market gains are real and they fall in love with you. Nothing gains you as many brownie points as telling your clients that Buy-and-Hold really can work. It never does. But it sure sounds good to a lot of people to say that it might this time. Telling people that there is one asset class that is always a good choice for the long term is like telling people that there is some system that will always let you win the lottery. It’s pure b.s. There is zero support in the research for such a claim. But it sells like hotcakes.

Four, please don’t forget the obvious — MOST OF THE EXPERTS PROMOTING BUY-AND-HOLD STRATEGIES ARE DOING SO BECAUSE THEY BELIEVE IN THEM. A lot of people would continue to push stocks even if the commissions were LOWER. Stock salesmen are not pure revenue-focused creatures any more than any of the rest of us are pure revenue-focused creatures. Most of us are creatures of habit highly influenced by inertia. Buy-and-Hold has been the dominant strategy in the academic world for a long time. That alone is enough to give it lots of points over strategies that have only been shown to work better by the research of the past three decades.

Wall Street could do JUST FINE promoting Valuation-Informed Indexing. I think in the long run it would do better because we would not see any more financial crises. Financial crises HURT this industry big time.

The move to Valuation-Informed Indexing is in everyone’s interest. It creates all winners and no losers. It shouldn’t be even a tiny bit hard to sell. Logically, promoting a strategy that greatly increases returns while also greatly diminishing risk should be the easiest sell in the world. The problem is that today people who have a long history of promoting Buy-and-Hold are on the defensive. I want to change that. I try to praise the Buy-and-Holders every chance I get to make them less defensive. But the defensiveness is hair-trigger stuff. It is VERY hard to come up with ways to say things that point us to a better future that don’t make the Buy-and-Holders go stark raving nutso.

To a large extent, the industry is doing what it thinks its customers want it to do. If you took a survey, I am sure that most investors would describe Buy-and-Hold as the most responsible strategy. The industry doesn’t want to step in and say: “No, you’re wrong, it’s actually Get Rich Quick garbage, it’s very dangerous stuff we have been pushing so hard all these years.”

I tell that in a funny way to make a point. I don’t dislike the people who work in this industry. I like them. My take is that they are destroying themselves. Yes, their customers like Buy-and-Hold today. But what are they going to think following a 65 percent price crash? The time to deal with that problem is NOW, not after the crash has taken place. People who call themselves “experts” have responsibilities. People who give investing advice should be aware of the last 32 years of peer-reviewed research in their field and should be at least a bit curious about the implications of that research. They make themselves look very bad to the millions of investors who will be looking for someone to hang from a tree by pretending that they are not aware that valuations affect returns and that therefore there is zero chance that a retirement study that does not contain a valuations adjustment could ever get the numbers right. That’s basic stuff, Laugh, and the industry “leaders” in this field have placed themselves very much on the wrong side of the line re that one.

Lots of people in this field understand where things are heading and are making efforts to position themselves for the post-crash period. Kitces is doing that. Bernstein is doing that. Swedroe is doing that. Pfau is doing that. Even Bogle has come out with a good number of statements showing that he understands the dangers of Buy-and-Hold. The trouble is that he doesn’t want to give up all the applause he wins by telling people that their Get Rich Quick fantasies might really some true. So he includes one GRQ statement for every research-based statement and the Get Rich Quickers eat up the GRQ garbage with a fork and spoon while pretending that he never said the research-based stuff. Responsible behavior? Not nearly. But good salesmanship in the short term? The very best!

I hope that helps a bit. The question is a good one.