“People Are Afraid that the Wall Street Con Men Will Destroy Their Careers If They Post Honestly. It Is a Lot Harder for the Wall Street Con Men to Do That Now That I Have Documented At This Site the 12-Year Cover-Up of the Errors in the Old School SWR Studies.”

Set forth below are the texts of two comments that I recently posted to another blog entry at this site:

Actually what X said does make perfect sense. It is actual mathematical proof that you have made zero progress and your time, even by your own accounts, is absolutely worthless.

So all efforts to achieve civil rights were of zero value except for President Johnson’s signing of the Civil Rights Act?

I don’t buy it, Anonymous.

You never get to the point where a President is signing a Civil Rights Act unless people in earlier days work up the courage to object to racism.

These things have to be done in a certain order.

If men were angels, Jack Bogle would have given a speech back in 1981 noting that Shiller’s research shows that there is precisely zero chance that a Buy-and-Hold strategy could ever work for a single investor. Then the Trinity study would never have been published. Then Greaney would never have gotten the numbers wrong in his retirement study. Then he would never have experienced embarrassment when I pointed out his errors. Then there never would have been any death threats. And on and on.

Men are not angels. Bogle went into cover-up mode when the flaws in his strategy were pointed out to him. These things happen. They happened here.

We don’t get to perfection in a single step.

People need to lay the groundwork.

I have laid a lot of groundwork at this site.

People are afraid that the Wall Street Con Men will destroy their careers if they post honestly. It’s a lot harder for the Wall Street Con men to do that now that I have documented the 12-year cover-up of the errors in the Old School SWR studies at this site.

If the Wall Street Con Men try to bring a lawsuit against someone for posting honestly, that person can use the material at this site to protect themselves. The Wall Street Con Men very much do not want the material at this site being publicized. So they are less likely today to bring such a lawsuit.

That helps us. The less likely the Con Men are to bring a lawsuit, the more likely people are to post honestly.

There will come a day when people will look back and say: “Of course Buy-and-Hold can never work. That’s so obvious. How is it that there was ever any controversy on this point?”

There was once controversy because the Buy-and-Holders once possessed great power and were able to use it to punish those who tried to post honestly. Every day that power gets weakened a little bit more because of the efforts of the thousands of us who have posted honestly at some point over the course of the past 12 years.

I have made amazing progress, more progress than I could possibly have imagined it was possible for any one person to make in the course of only 12 years. All signs are that I will be making a whole big bunch more progress following the next price crash.

You need to be physically in a prison cell to feel that any progress has been made.

So be it. I cannot change you.

When you are placed in your prison cell, you will see how we have been making progress for many years now, little by little, bit by bit.

I certainly wish you all the best that this life has to offer a person.


I’ll give a shorter response to the same comment.

I enjoy posting honestly.

I hate posting dishonestly.

If I had been posting dishonestly for the past 12 years, I would have hated every moment of my life for the past 12 years.

Since I was posting honestly for the past 12 years, I have enjoyed every moment of my life for the past 12 years.

I think I will elect to continue posting honestly. Call me madcap.

My best wishes to you and yours.


“It Is the Highest Quality People in the Field Who Possess the Courage to Respond. Buy-and-Hold Appeals to the Lowest Part of Us, Our Get Rich Quick Urge, the Savage and Stupid and Destructive Voice That Lurks Within All of Us. Valuation-Informed Indexing Appeals to Our Better Selves, the Part of Us That Longs for Honesty and Kindness and Intelligence.”

Set forth below are the texts of two comment that I recently posted to another blog entry at this site:

Rob: I’ve written e-mails to 30,000 academic researchers

Goon Poster: How many have made meaningful replies?

The response rate was roughly 0.5 percent, Evidence.

I’d like it to be 5 percent. I think it SHOULD be 50 percent. It’s the future of our economic and political systems at stake here.

But how many whites spoke out for Rosa Parks when she refused to move to the back of the bus?

For that matter, how many BLACKS spoke out for Rosa Parks when she refused to move to the back of the bus?

It takes courage to stand up to the Buy-and-Hold Mafia. The Wall Street Con Men have lots of money and lots of power and lots of connections and have demonstrated a brutal ruthlessness re their willingness to use their power and money and connections to destroy anyone who dares to “cross” them by posting honestly on safe withdrawal rates or any other critically important investment-related topic.

People are scared. For so long as people are scared, we are going to see a response rate of 0.5 percent rather than the response rate of 5 percent that we need to see to get the job done or the response rate of 50 percent that we would see if we all felt free to say what we truly believe about how stock investing works in the real world.

What I think you miss is that that response rate can jump from 0.5 percent to 5 percent and then to 50 percent in a very short amount of time.

How many people do you hear today saying that people with black skin should not be permitted to sit where they please on buses or to drink from the same water fountains as people with white skin?

People always knew on some level of consciousness that racism is wrong. It’s not that people were stupid in the 1950s and then suddenly became much smarter in the 1960s. It’s that a Social Taboo had developed that blocked us all from expressing our true feelings. To get laws changed, people need to speak out. People knew that they would lose their jobs and perhaps their lives if they spoke out about racism in earlier days. Survival is the first priority of the humans. We learned that we had to keep it zipped to be able to live our lives in peace and so we kept it zipped for a long, long time.

Until we didn’t.

Eventually, people worked up the courage to speak up.


Because survival is not the ONLY priority of the humans. We care about other people. We care about justice. We care about honesty. We care about our consciences. Our hearts go out to people whose lives are being destroyed for no good reason.

Rosa Parks had refused to go to the back of the bus at an earlier time in her life, about 12 years before the time that made her famous. No one backed her up that time. So her act of courage was in vain. When she did it again in the 50s, the time was right. That time she started a revolution. And everything fell in a short amount of time.

That’s how it is done, Evidence.

I got a 0.5 percent response rate on those mailings because most of us are scared today. We’re not dumb. We’re scared. The Buy-and-Hold Mafia is powerful and ruthless and we want to protect ourselves and our loved ones from its acts of violence and destruction and defamation. So most of us are keeping it zipped for the time-being.

But for how much longer?

The people who wrote the scores of responses that I received are the pioneers. They are the leaders. They are the ones who care enough about the future of their country that they worked up the courage to give public expression to their sincere views.

When those people see another price crash, one that may well take us into the Second Great Depression, they will speak out in even stronger terms. They will encourage others to speak out. There are hundreds if not thousands now on the borderline, people who came close to responding to my first mailing and people who will actually do it when I send a second mailing to them following the next crash.

The response rate will never drop to anything lower than 0.5 percent. It will in time rise to something much higher than that. It can only rise, it can never fall. The History Train moves in only one direction — Forward. You Goons are on the wrong side of the History Train and so you are doomed. You are already in a position where you have to get more and more and more abusive just to tread water. There comes a point where it is just not possible to get any more abusive. Then you go down.

You can’t win, Evidence.

Our nation’s laws just don’t permit it. Our nation’s beliefs just don’t permit it.

Robert Shiller didn’t have a Nobel prize in his pocket on the morning of May 13, 2002. He has one today. That should tell you something. That reality is reflective of something deep and real and growing. People are sick of the smelly Buy-and-Hold garbage. More and more and more of us are every day working up the courage to say so in clear and firm and bold ways.

The ones who speak out first are the ones who do the most good and who become the most famous and who make the most money by doing so. People are catching on to that.

You are doomed. You were doomed on Day Six, when John Walter Russell put forward his sensitivity study showing that the Old School safe-withdrawal-rate studies were garbage. But you did have the violence card to play then. And the deception card. And the defamation card. The day is coming when you won’t even have those. When the Buy-and-Holders don’t have violence and deception and defamation to help them make their case, what the heck do they have?

They got nothing.

The good guys win in the end, Evidence.

I am sure.

I am sure because of the country we live in.

This may be a country that for a time tolerates con men but it is also a country that in time works up the courage to demand that they be placed in prison cells for the protection of all.

That’s why I love it so.

I naturally wish you the best of luck in all your future life endeavors regardless of what investing strategies you elect to pursue, my old friend.


I was not happy with the response rate. It was much lower than what I expected. I expected something in the neighborhood of 5 percent. So the response rate I received was about 10 percent of what I expected.

I was THRILLED with the quality of the responses. The quality of the responses exceeded my most wildly positive expectations. By a lot.

That tells me that it is the highest quality people in the field who possess the courage to respond. I think we are going to continue to see it play out that way. Buy-and-Hold appeals to the lowest part of us, our Get Rich Quick urge, the savage and stupid and destructive voice that lurks within all of us. Valuation-Informed Indexing appeals to our better selves, the part of us that longs for honestly and kindness and intelligence.

I believe that love conquers hate in the end, Evidence. I acknowledge that there have been times in history when things have looked pretty darn dark. Love has always prevailed in the end. We wouldn’t be here today talking this matter over if that had not been the case. I think things are going to continue to play out that way. I sure hope so!

My best wishes to you.



Valuation-Informed Indexing #204 — What Economists Say About Shiller’s Nobel Prize

I’ve posted Entry #204 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called What Economists Say About Shiller’s Nobel Prize.

Juicy Excerpt: “We have big important questions that remain largely open and we have giants bringing evidence to bear. And the answer turns out to be more complicated than markets are efficient — or markets are inefficient.”

Yes. The toughie is — How can both Fama and Shiller be right? My take is that Fama is right that the market longs to be efficient and would be efficient if only investors had access to the information and tools needed for them to exercise price discipline when buying stocks (as they do when buying all the other goods and services offered in every type of market other than the stock market). Fama’s tragic mistake was jumping to the conclusion that the reason why short-term timing doesn’t work is that prices are set rationally — The real reason is that it is investor emotion that determines prices in the short term and emotion is unpredictable stuff.

Add Shiller’s insight (that prices are determined by emotion in the short term) to Fama’s (that the market must get the price right eventually because that is what markets do) and you’ve really got something. We don’t need to reject Fama’s insights, we need to look at them in a new light informed by Shiller’s insights. Both “sides” have something powerful to contribute.

If only the Buy-and-Holders could calm down enough to see that acceptance of Shiller’s contribution brings them to the place that deep in their hearts they really want to be.

Greaney Goon to Rob: “You Give No Real Consideration to Anything That Doesn’t Fit Your Script”

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

You give no real consideration to anything that doesn’t fit your script.

That’s not an accident.

My script is the last 33 years of peer-reviewed research in this field, Anonymous.

I believe that it is better to follow the research than to follow your emotions. I see the benefit of following research as being that research is objective while emotions are subjective.

I don’t say that the Buy-and-Holders do not believe subjectively in what they say. My take is that they do believe. That is, they lie to themselves before they lie to others.

I don’t want to lie to myself OR others. So, yes, I follow the script of the peer-reviewed research in this field.

That’s the source of all the conflict. The Buy-and-Holders SAY that they follow research. But the claim is a lie.

There was once research that seemed to support Buy-and-Hold. But that research was discredited by subsequent research 33 years ago.

My work is rooted in TODAY’S research, not the research that was available to us 33 years ago.

The Buy-and-Holders want to continue to claim that their strategies are rooted in research. But they do not want the people who hear their message to know what the last 33 years of peer-reviewed research says.

I call b.s.

I call deception.

I call financial fraud.

I want no part of it. I intend to continuing following “the script.”

It is not a script set by me. It is a script set by the academic researchers in this field.

Show me the URL for a study showing that price discipline is not necessary and I will write a column about it.

You cannot do it. There is no such study. It doesn’t exist.

Buy-and-Hold is a lie, the biggest lie ever told in the history of personal finance.

It was not a lie in the beginning. It was a mistake. That’s something different.

But I think it is fair to refer to a mistake that has been covered up for 33 years as a lie.

I don’t tell lies about the numbers that people use to plan their retirements.

Please try to find someone else.

I can’t go for that.

No can do.

It’s not my particular cup of coffee.

I’ll stick with the script until I see some peer-reviewed research backing up the smelly Buy-and-Hold garbage.

The full truth is that I don’t at this point expect ever to see it.

My best wishes to you and yours.


“People Are Afraid of the Wall Street Con Men and of Their Internet Goon Squads. The Reality Is That Both Are Paper Tigers. There Is Nothing That the Con Men or Their Goon Squads Can So to Us Given the Materials Housed At My Site. They Don’t Want the Millions of Middle-Class Investors Whose Lives They Have Destroyed Finding Out How They Have Been Lied to. So They Very Much Don’t Want to Do Anything to Bring Publicity to This Site.”

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

If people REALLY saw value, they would pay you. I think you have been paid what you are worth. By the way, there are no charges, thus no felonies. Only your imagination. Your lack of success is of your own shortfalls. Stop trying to blame someone else for your problems.

I have had hundreds of people tell me that they perceive HUGE value in my work, Anonymous. The value of the work is not in question.

We obviously need to see enforcement of the law for me to collect what is owed me.

Financial fraud is a crime,a felony.

When your prison sentence is announced, I am going to have zero trouble collecting the $500 million. When your prison sentence is announced, we will be seeing honest posting at every board and blog on the internet and Buy-and-Hold will within six months be perceived as an obscene phrase.

I earned the money and I intend to collect it.

I encourage lots of others to follow my lead. The investing field is a money field. There are BILLIONS of dollars to be made in creating honest calculators and in writing honest books and article and in giving honest speeches and all the rest. The people who will make the most are the people who get in early.

People are afraid of the Wall Street Con Men and of their Internet Goon Squads. The reality is that both are paper tigers. There is nothing that the Con Men or their Goon Squads can do to us given the materials housed at my site. They don’t want the millions of middle-class investors whose lives they have destroyed finding out how they have been lied to. So they very much don’t want to do anything to bring publicity to this site.

I am happy to help out anyone who is attacked by the Con Men or by their Goon Squads by pointing people to the materials at this site. So the dangers that people perceive are no longer real.

The intimidation tactics continue today. But I believe that people will work up the courage to stand up to you Goons following the next price crash. I sure hope they do!

Anyway, we will see what happens then.

I naturally wish you the best of luck in all your future endeavors regardless of what investing strategies you elect to pursue, my Goon friend.


“We Don’t Have to Prove the Valuation-Informed Indexing Case Today. The Case Is As Strong As Any Case Could Be. There’s Nothing to Do on That Side of Things. And We Don’t Need to Show That It Is Only Corruption Keeping Buy-and-Hold Alive Today. There Is Now a Mountain of Evidence of the Corruption. The Job Today Is to Figure Out How As a Nation We Achieve Healing and Move Forward Together.”

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

There was a time when you took your “career” seriously, from the vanity book on down. You seem to have admitted defeat at this point.

I take the work I do very seriously and I have not admitted defeat, Anonymous.

I have come to realize that circumstances are not as I thought they were on the morning of May 13, 2002. That much would be fair to say.

I believe today that every person involved in this matter wants to come clean and move forward. Jack Bogle wants that. Wade Pfau wants that. Robert Shiller wants that. You know all the names. They all want that. You want that. Lindauer wants that. Greaney wants that.

There is no intellectual debate. There can be no debate when all the evidence is on one side and there is zero evidence on the other side.

What there is is a trap that we have as a society fallen into.

I believe that the Buy-and-Hold Pioneers had good intent. There are cynics who will say otherwise. I believe that the cynics are wrong. I believe that back in 1965 we didn’t know all there is to know about this subject and so some perfectly smart people made some perfectly understandable mistakes. In 1981 the research was published that identified the mistakes and that permitted us to move on to something far better.

The trouble is that during those 16 years lots of people built careers based on Buy-and-Hold and so they were not too excited about the idea of acknowledging that that had gotten some things terribly wrong and would need to admit their mistake before they would be able to begin offering sound investing advice. Their pride was hurt. They were ashamed. They felt that people would think they were stupid to have made such a mistake (any people who thought that would have been wrong but I believe that the Buy-and-Holders felt this way all the same). They elected to cover up the mistake rather than acknowledge it. That put us on a bad track.

At the time the mistake was discovered, valuations were at such low levels that it was possible for people to rationalize not admitting the mistake. The thought was that valuations would probably never again be at fair-value levels much less higher and thus this was not a big deal.

Years later, it had become a very big deal indeed. But by that time the lie at the root of the Buy-and-Hold concept had produced a huge bull market and telling millions of people that all that money was Pretend Money had become a very difficult thing to do. What had started as a soft cover-up became a hard cover-up. We entered a stage where careers were destroyed when honest people dared to tell the truth about these matters. That of course made the already hard cover-up an even harder cover-up. We cycled down, down, down.

I of course knew very little of this when I put forward my famous May 13, 2002, post. I knew that the story didn’t add up. I loved the Buy-and-Holders. I knew of no cover-ups. So I got myself involved in something ten thousand times bigger than anything I would have dared get involved in had I known all the realities. Twelve years later, here we are.

The corruption in the investing advice field is more extensive than any person who has not worked this matter for 12 years running can imagine. I learned how extensive the corruption is during these 12 years. That’s an important story and I need to report it to the millions of middle-class investors who need to know about it.

The upside potential is beyond description. Our system works. The idea that the Buy-and-Holders put forward of rooting one’s investing strategies in the peer-reviewed research has produced results beyond anything that they possibly could have anticipated. We possess today the ability to reduce the risk of stock investing by 70 percent. We are on the threshold of the greatest economic surge in our history. That’s very exciting stuff.

My job is to expose the corruption in such a way as to not undermine our hopes of enjoying the benefits of the huge economic surge.

It’s not an easy job, Anonymous.

There are many people who have committed acts of financial fraud and are looking at possible prison sentences. There are even more who are likely going to see lawsuits for the recovery of damages filed against them. There are millions who are going to be angry about the lies that have been told to them for so many years now when we experience the next price crash and they wake up to see that their retirement portfolios have been wiped out.

I love my country, Anonymous. I do not want to see it torn apart because of this. My concern that playing this the wrong way could cause my country to be torn apart informs every step I take. That’s been so going back to the morning of May 13, 2002. But as I have learned how deep the corruption goes, the concern has obviously grown greater and greater.

I of course want us all to realize the benefits of being the luckiest generation of investors ever to walk Planet Earth. I want the Valuation-Informed Indexers to enjoy those benefits. I want the Buy-and-Holders to enjoy those benefits. I want the Wall Street Con Men to enjoy those benefits. I want you Goons to enjoy those benefits. The positive side of this story is 50 times bigger than the negative, as big as the negative is. My job is to see that we all enjoy as much of the positive as possible while avoiding as much of the negative as possible.

It’s a big job for a fellow whose only expertise in the field of investing advice is that he figured out how to get his words to show up on internet posts. But someone has to take it on, you know? I think it would be fair to say that I have been elected by my fellow community members (including you Goons).

I haven’t given up, Anonymous. I have never given one second’s consideration to the idea of giving up. It’s the farthest thing from my mind. I think about how to take things in a positive direction from the time I wake up in the morning until the time I go to bed at night.

The tactics that I employ naturally change as I learn new realities.

There was a time when people were saying “Oh, you need peer-reviewed research showing that Valuation-Informed Indexing is always far superior to Buy-and-Hold, that would really make a difference!” I didn’t think that was so at the time people said it. We all obviously know that it is not so today. There was never any peer-reviewed research showing that Buy-and-Hold could work for even a single investor, so there was never any need to publish peer-reviewed research showing that it cannot work. It’s good that we have such research. The Bennett/Pfau research is of huge importance and is going to take us all to some amazing places in days to come. But the sticking point was always the embarrassment that the Buy-and-Holders feel about admitting their mistake and publishing research showing how costly the mistake has been was never going to mitigate that embarrassment. So publishing more research is not the answer.

Getting more supporters isn’t the answer. I already have hundreds. Again, it’s great to have that base covered. But getting hundreds more is not going to change things. We need the hundreds we already have to work up the courage to speak out, to expose the cover-up and the fraud and the corruption. If I were to get thousands more supporters in coming days, it wouldn’t make a difference for so long as they were all afraid to speak up about the corruption. And, if the supporters I have today felt safe in speaking up, they would be more than enough to get the job done. So getting more supporters is not the answer either.

What’s the answer?

We need as a society to care enough about moving forward that we are willing to take on the risks of standing up to you Goons. Once we reach that point, all the magic starts happening.

We are not there today. People see how wonderful it would be to be creating all the books and articles and calculators that millions need to become able to invest effectively. People love the idea of bringing the economic crisis to an end. People love progress. That’s what our country is all about. So that side of this thing is covered. Lots and lots and lots of people want to explore the positive side of this thing. That has been so since the morning of May 13, 2002, and is even more true today.

The only thing that stops us is the Goon factor. People don’t want to see their reputations destroyed. People don’t want to see the lives of their loved ones threatened. People can see how it would benefit us as a society to overcome you Goons. But people have their own lives and they do not want to sacrifice their lives to achieve this great advance in public policy. So for the time being we are stuck.

I believe that the next price crash is going to change things, Anonymous. I saw what the first one did. It opened doors that had long been closed. I would say that the door opened about 30 percent with that crash. Another push forward of 30 percent will create enough momentum for the thing to swing open all the way. I believe that that’s the answer.

I am not God. I could be wrong. Please feel free to believe what you want. But your question is about what I am doing today and what I am doing today is determined by what I believe will happen following the crash. So preparing to take things in a positive direction following the next crash is my focus today.

That means building a record. People need to know about the corruption. Obviously. All of the ugly stuff needs to be exposed. Because it is by exposing the ugly stuff that we bring it to an end and make it impossible for it ever to come back. So it is obviously part of my agenda to prepare for the exposure of all the ugly stuff.

But we certainly don’t want to break people’s sprits with the exposure of all this ugly stuff. We want to present the positive story that counters the ugly stuff too. We need to show people all the wonderful stuff that the Buy-and-Holders really did add to the mix. And we need to help people understand that the mistakes made by the Buy-and-Holders were perfectly understandable when considered in context and that even the corruption can be understood (I don’t say entirely excused, just understood) when considered in context. It’s just as important that the extenuating circumstances that apply here be revealed as it is that the corruption that has been holding us back for so long be exposed.

I tell those two parts of the story in every post I advance here, Anonymous. That’s the deal. That’ the job.

There are two ways we can go. We can elect to continue the cover-up following the next crash. In that event, we all go down together. The numbers show that. It makes me as sad as sad can be. But if that is the choice that we are going to make as a society, there is obviously not a thing that I can do about it. I don’t think that that is going to happen, so, no, I have not given up. But, if an angel came down from heaven and told me that that WAS what was going to happen, then I would indeed give up. I don’t see any way out for any of us if that happens.

If that does not happen, which is what I believe will be the case, we are going to need to find a way to tell this story in such a way that everything comes out and we achieve a cleansing effect but also in a way that does not tear us apart as a country.

You know what Lincoln had to do after the Civil War? That’s what we are looking at here. We are not going to go backwards. Lincoln didn’t reinstate slavery to make the South feel better about being in the Union. But he did reach out the hand of kindness and make efforts to achieve healing with people who had in earlier days been perceived as the enemy.

The Buy-and-Holders are our friends. They have achieved great things. They are part of our future even though the discredited Buy-and-Hold strategy is not. So we need to work very hard to make peace with them.

That’s my job. That’s what I think about every day. That’s what I prepare for with all the work that I produce here at the blog and elsewhere.

Does that help?

I haven’t given up. I haven’t even considered giving up. My energies are today pointed in a different direction. Because circumstances have changed. We don’t have to prove the Valuation-Informed Indexing case today. The case is as strong as any case could ever be. There’s nothing to do on that side of things. And we don’t need to show that it is only corruption keeping Buy-and-Hold alive today. There is now a mountain of evidence of the corruption. Anyone who is open to learning about the corruption is already 100 percent convinced. And anyone who is not open to being convinced obviously would not be convinced by more evidence.

The job today is to prepare for all that happens following the next price crash. The job today is to figure out how as a nation we achieve healing and move forward together.

My best wishes to you and yours.


“Bogle Wants to Move Forward As Much As I Do. He Is Just More Afraid or More Proud or Feels More Trapped or Whatever. But Deep Down Inside He Wants What I Want.”

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

Your post is an insult to Rosa Parks and anyone with common sense, Rob.

I don’t think so, Sensible.

I don’t say that financial fraud is as evil a thing as racism. Racism is a direct injury to a person while financial fraud is a money thing. Racism is much worse. But the drivers of the stories are similar.

It’s rare to have a situation where there is one course of action that is all good and one that is all bad. We had that with the Civil Rights situation. It wasn’t just blacks who were going to benefit when we came to our senses and started treating blacks equally. Whites were going to benefit because they were going to enjoy all the advances achieved by blacks and all the friendships they would have with blacks. The Civil Rights revolution was a win/win/win/win/win with no possible downside.

Another similarity is that everyone knew that. Many Whites wanted the Civil Rights revolution almost as much as blacks did. And properly so. It degraded them to live in a society that did not honor both races. Many whites lived in shame and wanted to be clean.

So it is with Buy-and-Holders today. I have probably learned as much about how stock investing works from Buy-and-Holders as I have from Valuation-Informed Indexers. I learned about the errors in the Old School safe-withdrawal-rate studies from Bogle. Why did the king of Buy-and-Hold tell enough truths in his writings for that to happen? Because there is a part of Bogle that wants to help people and it comes out from time to time despite his desperate desire to stop millions of middle-class people from finding out what the last 33 years of peer-reviewed research tells us. Bogle wants to move forward as much as I do. He is just more afraid or more proud or feels more trapped or whatever. But deep inside he wants what I want.

The same is true of Bill Bernstein. Or else why did he respond honestly to one of you Goons when you sent him an e-mail asking if the methodology used in the Old School studies was really analytically invalid by saying that anyone who would give thought to using one of those studies to plan a retirement would have to be out of his mind?

The same is true of Larry Swedroe. Or else why would Larry tell enough truths at the Vanguard Diehards board to enrage Mel Lindauer enough to ban him?

The same is true of Scott Burns. Or else why would he become so envious when I told the truth about safe withdrawal rates that he didn’t name me as the person who initiated the New School? Scott would like to be the person putting forward all these amazing insights. He knows darn well that Buy-and-Hold is a big pile of smelly garbage and he cannot stand it that he does not feel free to write columns that hold together and that help people and that are rooted in the findings of the past 33 years of research. It hurts him deeply to see someone else doing that and that hurt comes out in the envy evidenced in phrases like “catastrophically unproductive.”

The same is true of Wade Pfau. The 16 months in which Wade was posting honestly were the happiest 16 months of his life. You can see it in all his e-mails and posts from those days. He felt miserable when he had to flip to The Goon Side. He did it for his two small children. But he would love to live in a world in which he could do honest and good work and be praised for it rather than savaged for it.

The same is true of Mike Piper. He would like to run an honest blog. He told me so. He would like to win awards for his blog and feel that he earned them. He would like to be able to make a buck in this world and feel at peace about the way he made it.

The same is true of J.D. Roth. He is viewed as a leader by many in the financial blogging community He would like to feel inside that he has earned the respect that has been given to him.

The same is true of Todd Tresidder. He would like to turn his successful niche blog into a successful mainstream blog. He would like to have million of readers and he knows that he would have them if only he worked up the courage to take on you Goons and post honestly not just at his niche blog but at a lot of mainstream places where he would be helping people who have been taken in by your smelly Buy-and-Hold garbage.

The same is true of Carl Richards. He told me that he read every article at my site on Valuation-Informed Indexing. He told me that he thinks my work has huge value. He loves, loves, loves the idea of being able to offer honest investing advice. And he hates, hates, hates having to lie to his readers because he lives in fear of what you Goons would do to him if he were to tell his readers the truth about the last 33 years of research.

The same is true of Shiller. I wouldn’t be surprised to learn that he has an entire second book written and ready to go the minute Jack Bogle gives his “I Was Wrong” speech and that tells us all his thoughts on the critical matter he failed to address in Irrational Exuberance — how people should be investing their retirement money given his “revolutionary” (his word) findings of 1981.

Another similarity is the means by which those who in some surface sense don’t want to move forward keep us all from enjoying the benefits of doing so. You Goons are big on intimidation. You are big on ridicule. You are big on anger. You are big on hate. You are big on pessimism. You are big on all things small and dark. I have a funny feeling that Rosa Parks would understand why you behave the way you do — She’s been on the other side of all that anger and hate and smallness.

Another similarity is how the Ban on Honest Posting betrays the basic principles on which our society was founded. We are a dynamic society. What makes us great is that we are always advancing, always moving forward. Goons didn’t like that when it came time for a Civil Rights revolution and Goons didn’t like that when it came time for teaching people about the first true research-based approach to investing in stocks. Indexing is not un-American, like the Fidelity ad once said. But Goons are un-American. 100 percent un-American.

Another similarity is how doomed the Goon position is. We were going to get Civil Rights recognized in this country no matter how hard the Goons fought the advance. So there was no purpose in fighting it. All the Goons of that day did was cause everyone a lot of unnecessary pain. So it is today. Shiller has been awarded a Nobel Prize for his work. You Goons are not going to be able to stop millions of people from learning about the implications of research done by a fellow who has won a Noble prize. Your destructive efforts are doomed, destructive efforts.

The comparison fits.

Death threats and demands for unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs don’t have a place in discussions of what the peer-reviewed research on stock investing says any more than lynchings and the letting loose of guard dogs and the opening of fire hydrants and the use of dirty n-words had a place in discussions of where people with different skin color should be permitted to sit on public buses.

The racists are despised by everyone today. You Goons will be despised by everyone at a future time as well.

That is part of what drives you. Your shame is so great that you cannot bear to acknowledge it.

I cannot change that. I can offer to help while noting that the first step to you obtaining any help is for you to heal the wounds inside that drive your hate. There is no other way.That’s as far as I can go without agreeing to post dishonestly re SWRs and thereby becoming a Goon myself.

The fight for Civil Rights was ultimately a fight to change hearts. The same is true of the fight to open every board and blog on the internet to honest posting on safe withdrawal rates and scores of other critically important investment-related topics.

You Goons have raised the biggest financial-related challenge to our way of life since the Great Depression. A lot of people thought our song was over in the Great Depression. Those people have been proven wrong. Another similarity!

Please take good care, Sensible. There are people who care about you a whole big bunch more than you care about you. Those people will be sticking by you when the tide turns. Count it.


Valuation-Informed Indexing #203 — Would P/E12 or P/E8 Work As Well as P/E10?

I’ve posted Entry #203 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Would P/E12 oe P/E8 Work As Well as P/E10?

Juicy Excerpt: The other side of the story, however, is that a less productive economy will hurt Buy-and-Holders as well. And Buy-and-Holders too will be underinvested in stocks in the event that we see levels of productivity that few anticipate. The reality that the U.S. economy may be more or less productive in the future than it has ever been in the past is not an argument for staying at the same stock allocation at all times so much as it is an argument for being flexible in one’s expectations of future returns.

“Jack Bogle is Fucked Up. He Makes Messes. He Is Not a Saint and He Is Not the Frank Underwood of Personal Finance. He Is a Scared Little Boy Who Grew Up to Be a Hard-Working and Smart Man Who Is Responsible for a Good Number of Hugely Important Breakthroughs and One Massive Brain Fart That Caused the Biggest Economic Crisis in U.S. History.”

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

By the way even if the market did crash in the next few years to the magnitude you suggest none of the fantasy aftermath you have concocted would take place. It would just be used as a political tool and people would blame Obama and the Fed’s QE no one other than you would even suggest Buy and Hold. A million semi-credible reasons were presented as culprits for the last crash and not a single one was Buy and Hold. This means no goons, no prison sentences, no $500m checks, only continued irrelevance for you. What do you expect to be different this time? You of all people should know the folly in thinking “this time will be different” with regards to bubbles.

I don’t say that there is zero chance that you are right about this, Anonymous. It COULD happen the way you are saying.

The difference between us is that I have looked at the numbers. Every time we have gone to a P/E10 of 25, we have experienced an economic crisis (we are four for four). The one time we went to 33, we experienced a Great Depression. This time we went to 44. If we don’t open the internet to honest posting re the last 33 years of peer-reviewed research, we are looking at a Second Great Depression of twice the length and twice the depth of the first one.

I agree with you that the first inclination of the Buy-and-Holders will be to tell more lies. I don’t think that is going to be their final response to the next crash, however.

The core question here is — Is Jack Bogle the Frank Underwood of Personal Finance? Is he evil? Or is he a smart and good fellow who is a bit confused as to what the research really says?

I believe strongly that it is the latter.

I believe that Jack is as wrong as wrong can be. But I don’t think he sees it. He knows about Shiller. He knows that there is research showing that valuations matter. He knows about Linduaer and his threats of physical violence. He knows about Wade Pfau and about the wonderful research he did with me and about the threats that you Goons made to silence him. He knows all that and he is ashamed of his role in letting it all play out. All that suggests that he is not quite the saint that some at times have made him out to be.

I don’t believe that he is pure evil, however. If he were pure evil, why would he include that language in his book saying that Reversion to the Mean is an “Iron Law” (Bogle’s phrase) of stock investing? It was that statement that helped me understand that the Old School safe-withdrawal-rate studies could not possibly have gotten the numbers right (the Old School studies do not contain an adjustment for the level of valuation that applies on the day the retirement begins). If Bogle were pure evil, he would not have provided me that clue. If he were pure evil, he wouldn’t want anyone to learn the realities of stock investing for fear that he would be found out and he would not have written the many, many sound and helpful and wonderful and research-based passages in his writings. It doesn’t add up.

Bogle is not pure evil. He has done wrong things. He is proud. He cannot stand to see Buy-and-Hold fall. He is foolish in this respect. Valuation-Informed Indexing is a revised version of Buy-and-Hold that works in the real world. Valuation-Informed Indexing will improve the lives of middle-class investors in hundreds of different ways and Bogle will get a big part of the credit for VII because it is built on a foundation that was supplied by Bogle and the years of hard and good work he put into this project of figuring out how stock investing really works. So Bogle has his flaws. But the record does not support a finding that he is pure evil.

Our friend Jack Bogle is fucked up, you know? He makes messes. He needs his friends to tell him things he does not want to hear from time to time. He needs to have people around him who tell him what he needs to hear rather than what he wants to hear. He is a flawed human. He is not a saint and he is not The Frank Underwood of Personal Finance. He is a scared little boy who grew up to be a hard-working and smart man who is responsible for a good number of hugely important breakthroughs and one massive brain fart that caused the biggest economic crisis in U.S. history.

Now –

How is Jack going to react when he sees how much human misery he has caused with his phony pride?

His heart is going to melt.

He is going to work up the courage to walk to the front of that stage and say The Three Magic Words.

That’s what I believe, Anonymous.

You’re a cynic. You believe what you believe. You hold a far, far darker view of what makes our mutual friend Jack Bogle tick than I possess. I think the guy is going to come through for us. I love the guy and I think I know the guy and I think he is going to make the right play when his back is against the wall and he sees that he really has no other choice.

We’ll see, you know?

If the cynical view prevails, then the cynical view prevails. It’s not like I will have lost something by devoting 12 years of my life to fighting with all my might to take things in a positive direction. If the cynical view prevails, we all go down together. If the cynical view prevails, we are all in the soup — you, me, Bogle, Shiller, everyone.

At least I will have the small consolation of knowing that I gave this my absolute best shot.

I am not able to imagine any circumstances in which I would look back and wish that I had advanced just one death threat or one demand for an unjustified board banning or one act of defamation or one threat to get one academic researcher fired from one job. If we all go down together, I will feel just as strongly that we all should have worked together to spread the word about the 33 years of peer-reviewed academic research that permits us all to reduce the risk of stock investing by 70 percent while becoming free to retire five to ten years sooner than any of us dreamed possible back in the Buy-and-Hold/Get Rich Quick Era. I will never regret one word of the millions that I put forward in my effort to make my good friend Jack Bogle’s dream come true by presenting to the world the first truly Smart, Simple and Safe investing strategy for the millions of middle-class investors who have needed one for a long, long, long time.

But I don’t think that any of that is going to happen. I love my country. And with good reason. And I think that my country is going to come through for me when it sees that there really is no other option if we all want to keep our economic and political systems in place for the benefit of the next generation.

We’ll see.

I naturally wish you the best of luck in all your future life endeavors.


“Many Good and Smart People Think We Are Doomed to Repeating This Stupid Cycle Over and Over Again. I Do Not. The Difference In This Fourth Cycle Is That We Now Have 33 Years of Peer-Reviewed Research Showing Us What Works.”

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

You are the only known person to be implementing VII.

I don’t know where you got the idea that I am the only person implementing Valuation-Informed Indexing strategies. Nothing could be farther from the truth.

Valuation-Informed Indexing is Research-Based Investing. The two terms are synonymous.

People have been following Research-Based Investing strategies since the first market was opened for business. And people have been following Get Rich Quick strategies (Buy-and-Hold) since the first market was opened for business. The history of investing analysis is the history of a battle between these two “ideas.” I put the word in quotes because Get Rich Quick is not really an idea, it is an emotional impulse. It might be more accurate to say that the history of investing analysis is the history of a battle between these two drivers of behavior, the one an idea and the other an emotional impulse.

Each “idea” becomes more or less popular at different moments in history. You can look at Shller’s site and track the popularity of the two ideas over the course of the past 140 years. Buy-and-Hold/Get Rich Quick got very popular in the early 1900s. Then we saw an economic collapse. Then Valuation-Informed Indexing/Research-Based became popular for a time and our economy thrived. Then Get Rich Quick/Buy-and-Hold became popular again in the late 1920s and we experienced the first Great Depression. Then Valuation-Informed Indexing/Research-Based became popular again and we recovered from the Depression. Then Get Rich Quick/Buy-and-Hold became popular again and we experienced the stagflation of the 1970s. Then Valuation-Informed Indexing/Research-Based became popular again and we saw another economic boom. Then Buy-and-Hold/Get Rich Quick became popular again and entered today’s economic crisis.

It’s a cycle, Anonymous. That’s not a coincidence. There is a reason why we always cycle back from Get Rich Quick/Buy-and-Hold to Valuation-Informed Indexing/Research-Based and from Research-Baed/Valuation-Informed Indexing to Get Rich Quick/ Buy-and-Hold.

We all possess a Get Rich Quick urge. So our natural state is to be drawn to Buy-and-Hold strategies. Investors have the power to set stock prices wherever they want them to be. We can vote ourselves raises. There is a voice within our heads that says: “Given that you have the power to vote yourself a raise, why not get together with your fellow investors and do it?” That voice is always present. It never goes away. Bull markets (the product of the Get Rich Quick urge) are a natural phenomenon.

If that were the end of the story, the markets couldn’t function. Our natural Get Rich Quick urge would destroy them every time we tried to build them. But we ALSO possess a Common Sense urge that COMPETES with the Get Rich Quick urge.

Get Rich Quick/Buy-and-Hold ALWAYS destroys all of those who follow it and also always destroys the economy of a people who collectively are taken in by it. There has never been a time when Buy-and-Hold/Get Rich Quick became popular and we did not see an economic collapse. There is no other way that an addiction to Buy-and-Hold/Get Rich Quick can end. Those addicted eventually reach a point at which hearing what common sense says or what the historical data says (it is really just a common sense urge that causes us to turn to historical data to learn how stock investing works) becomes unbearably painful because reality “insults” the Get Rich Quick urge (reality is a troll!). So Get Rich Quick/Buy-and-Hold ALWAYS creates the conditions that cause it to be discredited and that cause million of investors to swear off Buy-and-Hold/Get Rich Quick. Get Rich Quick/Buy-and-Hold cannot continue indefinitely, it is too destructive a force.

I believe that Valuation-Informed Indexing/Research-Based CAN continue indefinitely. I believe that, following the next crash, we are all going to turn to Valuation-Informed Indexing/Research-Based and never go back. There are many good and smart people who think I am wrong about this. There are many people who think that the humans can never overcome their natural inclination to destroy their lives with Buy-and-Hold/Get Rich Quick.

I don’t think that’s right. I think over time we are advancing in our knowledge of how stock investing works. I view the introduction of Buy-and-Hold as it was promoted by people like my good friend Jack Bogle as a POSITIVE. Buy-and-Hold is dangerous. It is the ultimate expression of the Get Rich Quick urge. It has never worked for a single investor in the long term and it is a logical impossibility that it ever could. But the core idea is a very positive one.

The core idea of Buy-and-Hold is that investing strategies should be focused on the long-term and should be rooted in research. That is a wonderful advance. That is breakthrough stuff. It is because Buy-and-Hold is (or at least was meant to be) rooted in research that I became a Buy-and-Holder myself. It is because Buy-and-Hold is (or at least was meant to be) rooted in research that I always refer to you Goons as “friends.” I obviously do not endorse your death threats or your demands for unjustified board bannings or your tens of thousands of acts of defamation or your threats to get academic researchers fired from their jobs. What I love about you is that you believe in research-based strategies (so long as they do not interfere with your addiction to Buy-and-Hold!) In an ultimate sense, we are on the same side. In an ultimate sense, we walk the same path. In an ultimate sense, we are trying to do the same thing.

You are a Valuation-Informed Indexer, Anonymous!

You spit on the ground when you hear the words. That doesn’t matter. Actions speak louder than words. You have advocated what you call “Strategy C” in comments to this blog. Strategy C is a mix of Get Rich Quick/Buy-and-Hold and Valuation-Informed Indexing/Research-Based. It is tilted in the direction of Buy-and-Hold. But it is not dogmatic Buy-and-Hold. When you advocate Strategy C, you are letting common sense and the results of the research done in this field to influence your thinking.

It would not be right to call you a pure Valuation-Informed Indexer. You certainly are not that. You HATE hearing what the research says. But you are not a pure Get Rich Quicker either. There is a part of you that sees some benefit in knowing what the research says. That is why discussion of what the research says hurts you so much. You very much want to follow Get Rich Quick and yet there is a part of you that sees through it and hearing what the research says reminds you of the benefit of paying attention to that voice of common sene.

The same thing is going on with Jack Bogle. He says that it is okay to change your stock allocation by 15 percentage points when prices reach insane levels. He pulled the 15 percent figure out of his backside. There is zero research pointing anywhere in that direction. But you can’t say that Bogle is a pure Buy-and-Holder. A pure Buy-and-Holder would say that you should not change your allocation at all — forget this 15 percent stuff. Bogle is a Valuation-Informed Indexer! He is more a Buy-and-Holder than a Valuation-Informed Indexer. But he allows the research to influence him a bit while still maintaing a greater belief in Get Rich Quick. He is a mix, like you.

Like just about everyone. I am a mix too, of course. You pointed out yesterday how in one of my columns I gave in to a temptation to make a short-term prediction and naturally got it wrong. That’s the Buy-and-Hold/Get Rich Quick side of me coming out. Short-term predictions don’t work. All the research shows it. It is a core principle of Valuation-Informed Indexing. So why try? Because I am human. And because humans are drawn to Get Rich Quick/Buy-and-Hold. Because I am a mess-up, just like all you Goons.

Many good and smart people think we are doomed to repeating this stupid cycle over and over and over again. I do not. The difference in this fourth cycle is that we now have 33 years of peer-reviewed research showing us what works. We never had that before. Common sense told us that price matters and of course the three earlier economic crises that were caused by a belief in Buy-and-Hold strategies taught us (for a time!) that the Pretend Gains that follow from adoption of Get Rich Quick strategies come at a price. But peer-reviewed research is different.

Research is objective. Research is numbers. I believe that the Buy-and-Holders were serious about using research to become better investors and I believe that research really makes a difference. Our MISUNDERSTANDING of what the research says has brought on what is likely to end up being known as the worst economic crisis in our history. But if the Buy-and-Holders are good people, as I believe they are, Jack Bogle’s heart is going to melt when we enter the Second Great Depression and he is ten going to work up the courage to walk to the front of a big room and say the words “I” and “Was” and “Wrong.” At that point, we are off to the races. Once Bogle flips, everyone is going to flip. I don’t see any reason why we would ever return to Get Rich Quick/Buy-and-Hold again once every web site on the internet is telling the story of what the last 33 years of peer-reviewed research says.

Get Rich Quick/Buy-and-Hold didn’t start with Jack Bogle and Valuation-Informed Indexing didn’t start with Robert Shiller. Both have been around since the first market opened for business. Because the human urge to get something for nothing has been around since the first market opened for business and the human desire to correct the excesses of Buy-and-Hold strategies with the common sense findings of the peer-reviewed research has ALSO been around since the first market opened for business.

And both the Get Rich Quick urge and the Common Sense urge reside within every human being. Bogle has a small desire to follow research-based strategies residing within him and Shiller has a small desire to follow Get Rich Quick strategies residing within him.

You are a Valuation-Informed Indexer, Anonymous.