“I Expect to Set Up a System Whereby Internet Communities Concerned With Personal Finance Issues Help the Public to Identify the Good Guys, a Good Housekeeping Seal of Approval Sort of Thing. Lots of People in This Field Want to Do Good Work But Feel Pressured to Engage in Unethical Activities. They Need a Respected Authority Site to Identify Them as Honest and Holistic in Their Approach.”

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

Rob,

The crisis has come. The Wall Street Con Men ™ have of course, rumaged their lapels, and pooled together to provide 1 BILLION untraceable, untaxable U.S. dollars to you, to ensure a quick settlement. It is already in your bank account. The sun rises over 160 N Hatcher. You roll over, wipe the sleep from your eyes, and the day begins. Rob, please describe for us the typical day of a Valuation Informed Billionaire. I’m dying to hear what it is that you intend to do with yourself!

I’m going to use the $500 million number, not the $1 billion number.

I intend to use 5 percent ($25 million) to finance a number of blogs that will further develop the Valuation-Informed Indexing concept. My guess is that it might work to give $100,000 to each of 250 bloggers.

I intend to use another 5 percent to promote this blog all over the internet. That will solve that nasty problem that you refer to from time to time of there not being enough comments at the blog entries at this site.

I intend to take over control of the Bogleheads Forum and set it up here as a sub-domain. That will also help with the comments.

I would like to work out an arrangement with Motley Fool where I would write a newsletter on Valuation-Informed Indexing that they would publish and promote. I would like to have a weekly column there that would appear on the front page of the site and bring more traffic here.

I of course will publish the book — Investing for Humans: How to Get What Works on Paper to Work in Real Life.

After publishing the investing book, I will look for a big-name publisher for my saving book, Passion Saving: The Path to Plentiful Free Time and Soul-Satisfying Work.

I view those two books as part of a trilogy. When I am caught up with work on the saving and investing side, I will get to work on a book on career growth, The Self-Directed Life. I haven’t finalized a sub-title for that one yet.

I intend to do a lot of speeches. I love interacting with people. I intend to do a weekly podcast. I could see becoming active in FinCon. I believe that the internet changes the world of personal finance in a big and positive way. I want to be part of efforts to develop blogs that make a difference.

I expect to work for the passage of legislation that will protect internet posters from Goons and that will hold accountable site owners who know about Goon activity at their sites and fail to take action to deal with it.

I also expect to set up a system whereby internet communities concerned with personal finance issues help the public to identify the good guys, a Good Housekeeping Seal of Approval sort of thing. I believe that lots of people in this field want to do good work but feel pressured to engage in unethical activities because others are doing it and it gives them a marketing edge. People should be able to promote themselves as honest and as holistic in their approach. They need a respected authority site to identify them as such for their claims to be meaningful to everyday people.

My expectation is that I will continue doing this work until I die. I would like my two boys to get involved in the business as I get older.

I want to explore the Goon issue in more depth with both my Valuation-Informed Indexing friends and my Buy-and-Hold friends. The Goon issue really is the key to everything. People don’t like to talk about it because they view it as yucky. It IS yucky in its way. But it is also the key to long-term investing success. We ALL have a Get Rich Quick urge within us. It is that GRQ urge that makes stock investing risky. We are on the verge of discovering that reality. Once we do, 80 percent of the investing project will be helping people to develop tools to overcome the GRQ urge within, to avoid goonishness at all costs. Behavioral Finance is the future in this field, both on the investing side and on the saving side. I am pretty darn sure of that one.

People like Bogle and Bernstein and Burns and so on should be looking at my interactions with you Goons and writing about what they tell us about the pitfalls of stock investing. They are afraid to do so. They created a monster with their promotion of Buy-and-Hold. But this is where the action is. People don’t need to study annual reports in the days of indexing. People need to worry about becoming so emotional that they overlook the need to adjust their stock allocation and thereby keep their risk profile roughly constant. With the internet, we now can identify the rationalizations that people use to fool themselves Everyone in this field should be writing and talking about that aspect of the story on a daily basis.

I think that pretty much covers it. My sense is that the agenda outlined above will keep me more than busy for the remaining days of my time here on Planet Earth.

My best wishes to you and yours, my long-time Goon friend.

Rob

 

“What You Fail to Acknowledge, Rob, Is That Many People Just Don’t Agree With Your Conclusions. However, You Have Chosen Not to Just Let People Have a Difference of Opinion. They Decide That They Have No Choice But to Ban You Since You Won’t Listen.”

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

What you fail to acknowledge, Rob, is that many people, like myself, just don’t agree with your conclusions and we have explained why over and over again. However, you have chosen not to just let people have a difference of opinion. You decide to take over threads and fill it up with comments that you have made already and when people grow tired of your tactics, they ultimately decide that they have no choice but to ban you since you won’t listen.

Here are two clear facts on your two primary issues:

1. Buy, hold and rebalance has worked for many of us, is backed with long track records and we do not see any reason to switch to a timing scheme. We are all big boys and girls and can decide for ourselves as to what we feel will work.

2. SWRs- we have seen the studies and we understand what the studies say. You post from 2002 is famous only in your mind. Wade Pfau has done the best job to explain why we disagree with your comments.

Your points have been addressed so many times in the past 12 years that people have grown sick of hearing you repeat the same things. Making prison threats and other outrageous comments merely drive people to the conclusion that all of this stems from mental issues.

“I Had Lunch With the Author of the MoneyCrush Blog and with the Author of the Budgeting in the Fun Stuff Blog at the Financial Bloggers Conference (FinCon14). The Topic Was: What to Do About the Goons So That We Can Get More Bloggers Writing About Valuation-Informed Indexing.”

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

I have to question whether you wrote that guest post. Your name appears nowhere on the page, you didn’t claim authorship of Wade’s paper, and most telling of all, you didn’t reply to the comment.

I had lunch with the author of the MoneyCrush blog and with the author of the Budgeting in the Fun Stuff blog at the Financial Bloggers Conference (FinCon14). The topic was: What to Do About the Goons So That We Can Get More Bloggers Writing About Valuation-Informed Indexing.

Their idea was to ignore you Goons. I have heard this advice from hundreds of people, including my wife. I’ve never seen the tiniest bit of evidence that it works. The Goons and the Normals are working at cross-purposes. The Normals want to see investing advice that is research-based and that works in the long run and the Goons want to never, ever have to say the words “I” and “Was’ and “Wrong.” It’s pretty darn hard to see how those two desires can be reconciled without working through some conflict.

So I did not think too much of the advice that they were giving me. But I thought that they were kind to meet with me and I thought that they were being sincere in the advice that they were offering and I thought that I should be open to doing anything that at least did not look like it would do harm.

They said that it would be better if I didn’t respond to Goon comments and challenged me to test the idea. They also said that it would be better if my name did not show up on Guest Blog Entries because then you Goons wouldn’t be able to find the Guest Blog Entries with Google searches. I said that I would go along with the tests even though I didn’t see how doing these things would help.

So we did that. We exchanged a number of e-mails following the posting of the two Guest Blog Entries. Eventually, we just stopped sending e-mails back and forth. We never reached agreement on what should be done. There was no hostility. They stuck with their position — that I should ignore the Goons, that I should give short answers, that I should say what works and not point out what doesn’t work. I stuck with my position — that we should all unite in opposition to stuff that it is so abusive that it constitutes criminal behavior under the laws of the United States, that we should encourage Buy-and-Holders to say what they believe because we can learn from them but that we should not tolerate death threats and other insanely abusive stuff, that all bloggers should be doing what is best for their readers and not just what is popular and what makes them a quick buck or earns them an easy link.

The comment was real. They said that it was okay to respond to real comments under this experiment, just not to respond to Goon comments. But they said that the responses should be short. I wrote a short response. The woman who owns the site said that she had no problem with my response. I think she may have just forgot to approve the comment. Probably she turned the moderation on because she was thinking you Goons might show up and then, after we got into the long e-mail exchange, either she forgot to approve the comment or perhaps it seemed like a trivial thing because of the other issues that came up in our discussion and that remain unresolved.

Rob

Valuation-Informed Indexing #224: We Can End the Boom/Bust Economic Cycle By Becoming More Aware of How the Promotion of Buy-and-Hold Investing Strategies Contribute To It

I’ve posted Entry #224 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called We Can End the Boom/Bust Economic Cycle by Becoming More Aware of How the Promotion of Buy-and-Hold Investing Strategies Contribute To It.

Juicy Excerpt: Please take a look at the following series of numbers:

25, 6, 33, 6, 22, 9, 24, 7, 44

If the pattern evidenced in this series of numbers continues, which of the following numbers will come next?

(1) 25 or something in that neighborhood

(2) 15 or something in that neighborhood

(3) 8 or something in that neighborhood

(4) It’s impossible to say, there is no pattern evidenced in the above series of numbers

I took the nine numbers in the series above from Yale Economics Professor Robert Shiller’s site.

“Child Porn and Slave Trading and Murder for Hire Are Far, Far, Far Worse for the People Touched By Them. But These Horrors Are Not Widespread Enough to Cause a Loss of Confidence in Our Political System. We Have Moved the Responsibility for the Financing of Workers’ Retirements to the Workers Themselves. When We Did That We Took on a Responsibility to Open Up Some Means for Middle-Class Workers to Access Honest and Accurate Reports of What the Peer-Reviewed Research Says.”

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

“I think it would be fair to say that there is less personal integrity in the investing advice field today than there is in any other line of endeavor that could be named. ”

Fortune telling? Bank robbery? Child porn? Slave trading? Murder for hire? Embezzlement?

Fortune telling is not nearly as bad. Most people know to be skeptical of fortune tellers. Fortune telling is an innocent game compared to the investing advice field in the Buy-and-Hold Era.

Far fewer dollars are lost to bank robbery than to the continued promotion of long-discredited investing strategies. The direct losses resulting from Buy-and-Hold are $12 trillion. The total losses (both direct and indirect) exceed $20 trillion. The losses from bank robbery are not even remotely in the same neighborhood.

Child porn and slave trading and murder for hire are far, far, far worse for the people touched by them. But these horrors are not widespread enough to cause a loss of confidence in our political system. Following the 2008 crash, we saw political frictions on both the left (The Occupy Wall Street Movement) and the right (The Tea Party Movement). The next crash will greatly exacerbate this problem. Employers no longer provide for the retirements of their employees. We have moved the responsibility for the financing of workers’ retirements to the workers themselves. When we did that, we took on a responsibility to open up some means for the millions of middle-class workers affected to access honest and accurate reports re what the peer-reviewed research in this field reveals. Our system of government cannot retain the respect of the people unless we find some way to open the internet to honest discussion of safe withdrawal rates and scores of other critically important investment-related topics.

Embezzlement is akin to bank robbery. Obvious bad stuff. But not as bad as financial fraud precisely BECAUSE it is so obvious. Everyone opposes embezzlement. We are united in the view that we must work to stop it when we discover it. We cannot say the same about the continued promotion of Buy-and-Hold strategies for 33 years after they have been 100 percent discredited by the peer-reviewed research. We have highly revered people like my good friend Jack Bogle promoting Buy-and-Hold TO THIS DAY. That’s corrosive to our economic and political systems in a way that embezzlement could never be. Many people will find it hard to retain confidence in capitalism and in our democratic republic when they discover their life savings gone because of the lies about the peer-reviewed research that the Buy-and-Holders continued telling after the peer-reviewed research showed that there is precisely zero chance that this “strategy” could ever work for a single long-term investor.

I stand by my statement, Anonymous. This isn’t a case of one or two bad apples being discovered. The 12-year cover-up (it’s 33 years if you go back to when Shiller published his “revolutionary” [his word] research) couldn’t happen without support or tolerance of it from the journalism field. It couldn’t happen without support or tolerance from personal finance and political bloggers. It couldn’t happen without support or tolerance from academic researchers. It couldn’t happen without support or tolerance from economists. It couldn’t happen without support or tolerance from policymakers.

It’s bad.

The good news here is 50 times more good than the bad news here is bad. We now know how to reduce the risk of stock investing by nearly 70 percent while increasing long-term returns by enough to help investors retire five to ten years sooner. It’s important that we not lose sight of the fact that the economic and political system that failed us in permitting the continued and fraudulent promotion of Buy-and-Hold for 33 years after it was 100 percent discredited by the peer-reviewed research ALSO pointed the way to the biggest advance in the history of personal finance. This is overall a HUGELY positive story.

Still, the bad stuff is bad enough to make a lot of us uncomfortable confronting it. That’s the answer to the question you frequently ask as to whether there is some sort of “conspiracy” responsible for the 12-year (or 33-year) cover-up. The “conspiracy” is our human nature. We like to think well of others. We don’t like to call people out on their acts of financial fraud, especially well-respected and widely loved figures like Old Saint Jack. So we have let things slip and slip and slip and thereby pulled the trap tighter and tighter and tighter on Old Saint Jack and on all of our other Buy-and-Hold friends.

It’s a story that is incredibly bad and amazingly good at the same time.

That’s my sincere take, in any event.

Rob

“There Is No Way to Make the Case for Valuation-Informed Indexing Without Pointing Out the Dangers of Buy-and-Hold AS IT IS CURRENTLY BEING PROMOTED. The Peer-Reviewed Research Shows That Nearly All the Risk of Stock Investing Comes From the Failure of Investors to Practice Price Discipline (That Is, the Failure of Investors to Practice Long-Term Timing).”

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

a) An attack on steam as unscientific, ungodly, an evil con job, a 100% unworkable method that could never transport a single passenger or package to anywhere (though people used it every day for decades with apparently wonderful and expected results), a method promoted by nasty bigoted horrible people bent on destruction, who were harassing and threatening you, a smelly approach that needed to be buried 100 feet underground… etc, etc, etc,

There’s another aspect of this that jumped out at me upon reading your words, Anonymous.

Electric engines were indeed a huge advance over steam engines, just as Valuation-Informed Indexing is a huge advance over Buy-and-Hold. But there is a particular problem that comes up in making the case for VII that often causes a lot of friction and that did not exist when those promoting electric engines were making their case.

The thing that makes VII so wonderful is that it calls for the exercise of price discipline (long-term timing). Buy-and-Holders say that price discipline (long-term timing) is a bad thing. So Buy-and-Holders actually DISCOURAGE the thing that the last 33 years of peer-reviewed research in this field shows to be the key to long-term success.

You put a lot of nasty words in my mouth in your comment. I do not hate Buy-and-Holders. I LOVE Buy-and-Holders. I do not say that Buy-and-Holders are bad people. I say that they are good people. I do not say that Buy-and-Holders are dumb. I say they are smart. I do not say that Buy-and-Holder are evil. I say they made a mistake.

There is a big difference between what you say I say about Buy-and-Holders and what I say I say about Buy-and-Holders.

I do say that a good number of Buy-and-Holders have committed financial fraud in their efforts to defend Buy-and-Hold. That’s obviously a very, very, very bad thing.

But I obviously say that because I care about my Buy-and-Hold friends and because I want to persuade them to STOP committing financial fraud.

There would be no Valuation-Informed Indexing but for the foundation built for it in earlier years by the Buy-and-Hold Pioneers. I obviously am very proud of the work I have done over the past 12 years developing the VII concept. Well, guess what? There would be no VII but for the work done by the Buy-and-Holders before I came along.

The Buy-and-Holders did a lot of the heavy lifting. I try to give them credit for that every chance I get. I will be giving the Buy-and-Holders credit for all their wonderful contributions until the day I die. I took my friend Jack Bogle’s work and took it to places that he never imagined it could go. Jack didn’t do it all on his own and I didn’t do it all on my own. Jack and I created the first true research-based strategy TOGETHER. I only wish he would accept credit for his wonderful accomplishment!

There is no way to make the case for VII without pointing out the dangers of Buy-and-Hold AS IT IS CURRENTLY BEING PROMOTED. The peer-reviewed research in this field shows that nearly all the risk of stock investing comes from the failure of investors to practice price discipline (that is, the failure of investors to practice long-term TIMING).

Practicing long-term timing is 80 percent of the game! It is the key to everything!

And Buy-and-Holders say NOT to practice any form of timing!

That’s the entire problem right there. When we work that one out, we have worked it all out.

I love Buy-and-Hold when it sticks to first principles. The first principle of Buy-and-Hold was to use the peer-reviewed research as a guide to how to invest. The last 33 years of peer-reviewed research says that investors must, must, must, must, must ALWAYS practice long-term timing (while of course never, never, never, never, never practicing long-term timing).

This is going to end when Jack acknowledges his mistake and the speech in which he does so is written up on the front page of the New York Times. Starting on that day, everyone working in this field will be exploring every angle of how to practice long-term timing. The first chapter in every textbook will explain why long-term timing (price discipline) is the key to everything.

Everything else stays the same. When the Buy-and-Holders acknowledge the mistake that was uncovered by the peer-reviewed research 33 years ago, Buy-and-Hold works. Then there is no cause for friction, right?

ALL of the friction results from Bogle’s failure to acknowledge the mistake when it was uncovered 33 years ago. We all should be working to get him to make that all-important speech.

There’s no way to say what works in stock investing without talking about what the Buy-and-Holders got wrong. Price discipline is 80 percent of the game. And the Buy-and-Holders advocate that investors exercise zero price discipline (they advocate staying at the same stock allocation even when prices change — this is called RE-balancing).

We are on the same side.

You are just 33 years behind the Valuation-Informed Indexers because Jack hasn’t yet given his “I Was Wrong” speech. Once he gives that speech, it’s good stuff piled on top of good stuff piled on top of good stuff for all of us. Even those of us in prison will be better off to be living in a country with a strong economic system rather than one in a state of collapse.

I LOVE Buy-and-Hold. That’s why I want to fix it. That’s why I want it to work. That’s why want to be sure to do everything I can to get the prison sentences of my Buy-and-Hold friends shortened a bit.

I hope that all makes good sense to you, my old friend.

Rob

Goon Poster to Rob: “Let Us Pretend You Alone Had the Franchise for Diesel Electric at That Moment in History. Would a Workable Way to Foster the Transition Be an Attack on Steam Power as Unscientific, Ungodly, an Evil Con Job, a 100 Percent Unworkable Method Promoted by Nasty, Horrible People Bent on Destruction?”

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

“This matter is settled. There is no valuations adjustment in those studies. ”

Absolutely — to both statements. It is so difficult to find anything either tangible or truthful in your painfully long screeds, so it’s worth pointing out such tiny nuggets, whenever they can be found.

Rob, for the thousandth time, let me try to gently nudge you towards sanity, and perhaps even a fruitful future:

Once, long ago, steam engines ruled the earth for train locomotion. While that was underway, there came along diesel/electric power. Let us pretend you alone had the franchise for diesel electric at that moment in history. You alone thought it up, you designed it, you built a working prototype, you perhaps even patented it. Perhaps you felt, with the strength of a religious zealot, that your way — the diesel/electric way — was surely the way of the future, dooming steam to become the relic we now know it to be.

Question: would a workable way to promote it, to foster the transition, to encourage adoption be more likely to be:

a) An attack on steam as unscientific, ungodly, an evil con job, a 100% unworkable method that could never transport a single passenger or package to anywhere (though people used it every day for decades with apparently wonderful and expected results), a method promoted by nasty bigoted horrible people bent on destruction, who were harassing and threatening you, a smelly approach that needed to be buried 100 feet underground… etc, etc, etc,

OR

b) To outline the workings of diesel/electric with specificity, clarity, and brevity. To then to illustrate it’s function by using it yourself in demonstration. To develop and then promote early adopters who had similar results to your own. To focus solely and exclusively on YOUR approach, on IT’S benefits, via POSITIVE-minded and directed activities?

To be even briefer still: Why not put down your anger, your pain, and your raging ego, and instead simply try to focus on learning truth and then (if you feel the need) promoting that truth; instead of dedicating all of your energies into attacking others, and what THEY may or may not chose to do with their own freedoms and ideas?

Briefer still: If your ideas had merit, they would be adopted of their own accord.

 

“It’s a Pulitzer-Prize Winning Story. But This is Scary Stuff. Editors Worry About Losing Advertising and the Investing Advice Industry Supplies Most of the Advertising That Appears in the Investing Sections of Newspapers.”

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

“…desperate characters… a lot of money… a lot of power… a lot of connections… people who don’t play nice… brutally abusive and ruthlessly vicious people. That’s the story.”

And yet you somehow think these tantalizing and ‘sexy’ factors would PREVENT a legitimate reporter* from wanting to grab this as perhaps an exclusive?

Sorry, Rob. That kind of grist for the mill rarely appears even given a whole lifetime of specifically looking for it, for an investigative reporter. If there were one scintilla of evidence of what you claim, then more than one investigative team would have been all over such a story.

It’s a huge story, Anonymous. It’s a Pulitzer-prize winning story. And there are obviously lots of reporters who would like to win Pulitzers. But this is scary stuff too.

There are at least four big negatives.

One, only a small number of reporters know the background well enough to understand what is going on. The case for Valuation-Informed Indexing is rock-solid. But VII represents a complete breaking of the old paradigm. Consider what the Bennett/Pfau research shows. It shows that we can reduce the risk of stock investing by 70 percent. I told you the story about how I was once talking to my wife about this stuff and she said “you sound like one of those infomercial guys.” It’s all true, it all checks out. But it is also too much to be believable. Reporters don’t want to get something wrong. Getting something this big wrong is a career-killer. And the initial reaction of most reporters is similar to the initial reaction of my wife. They think “this CANNOT be so” and “If this were so, someone else would have reported it.” The guy or gal who breaks the story is going to be someone well-versed in behavioral economics and there are only a limited number of that type out there in positions of influence.

Two, the investment advice industry has great power. Editors worry about losing advertising and the investing advice industry supplies most of the advertising that appears in the investing sections of newspapers. The potential upside here is huge. But there is a big potential downside here too. There is great risk in taking on this story.

Three, the majority of readers of the investing sections of newspapers are Buy-and-Holders and are thus strongly biased against this story. After the crash, I don’t think that will be so. But as of today most investors are over-invested in stocks (we couldn’t have the P/E10 we have today if that were not so). A newspaper that runs this story is performing a huge public service but is also alienating a large percentage of its readership. Not every paper is jumping at the chance to do that.

Four, even if you find a reporter who is 100 percent knowledgeable and 100 percent independent and 100 percent brave, he wants to understand all the elements of the story before he puts his name on it. The usual rule you follow when you make a pitch is to keep it simple. You want to say “Person X accepted a bribe of Y amount on Date Z and here are the pieces of paper proving this.” Then it clicks. We are talking here about an entire model of how stock investing works being brought down. There are about 10 different huge insights that ALL have to be true for the entire story here to be true. You can’t boil this down to 10 words. That just means that the story is bigger than it would be if you could do that. But it makes it harder for the pitch to succeed. The reporter is not going to take the time to check everything out until he is at least reasonably sure that there is a big story here. And he cannot be made reasonably sure that there is a big story here until he has checked everything out. It is much, much harder to get the word out on huge stories than it is to get the word out on small stories.

This is not the first time that something like this has happened.

Watergate was possibly the biggest story of all time. That story MADE the Washington Post. The Post was a relatively small paper before it broke the Watergate story. It then became the second most influential paper in the nation. You would think that every paper in the country would have been competing with the Post to break that huge story. But that’s not the way it was. The Post was the ONLY paper pursuing that story for a long time. It was a huge opportunity but it was a risky thing and no other papers were willing to employ the resources it took to break the story and get it right.

The Lance Armstrong story was huge and just about every reporter who covered bicycle racing knew that he was using illegal drugs for a long time before that story broke. Armstrong had connections and power and money. There are people who told the truth about his fraud and then were sued or rendered unemployable because they did so. Lots of reporters HINTED at what they knew (and many today hint that Buy-and-Hold has been discredited). But it took a long time before the story broke in an official way. People committing fraud employ intimidation tactics because intimidation tactics work. At least in the short term.

The Joe Paterno case, where child sexual molestation was being covered up at Penn State, could have been reported MUCH earlier if reporters had not been afraid that their careers would have been destroyed by the powerful people trying to keep the cover-up going. There was a woman at another department of Penn State who lost her job in that matter because she told the truth about things that came to her attention.

Cover-ups are the order of the day in cases where there are people with huge amounts of money and power who want to keep a story suppressed. That’s just a reality of our world.

We have a wonderful system of government and I believe that this cover-up will end with lots of people going to prison and with lots of people paying huge amounts of civil damages. But your idea that it doesn’t take a lot of courage to go up against people like Jack Bogle and the other Wall Street Con Men is a sick joke. This is hard work. It is very, very, very important work. But it is also very, very, very hard work.

I will have earned every penny of that $500 million when this story breaks in the national press, Anonymous. There are thousands of academic researchers who will be freed to do honest work again when this story breaks. There are millions of middle-class workers who will be able to plan their retirements effectively for the first time in their lives when this story breaks. We will as a nation be able to avoid future economic crises after this story breaks. I am humbled to be playing the lead role in getting this matter out before the public.

But I’ve got scars all over my body from the hits that I have taken over the past 12 years from the Wall Street Con Men and from their Internet Goon Squads. That’s part of the story. Lots of academic researchers want the story to be told. And lots of investing experts (including most of my Buy-and-Hold friends) want the story to be told. And the vast majority of middle-class investors obviously want the story to be told. But there are reasons why so many of us have been afraid to take the steps needed to get this out before the public.

I was scared too. I know how my fellow reporters feel.

And I am scared today, to tell the full truth.

It’s just that I am more scared of what happens to our country if this does not get out than I am scared of what happens to me if I continue my efforts to get it out.

I say clearly that everyone who loves his or her country should be helping in the effort to get this story out and to change the world for the better in about 500 different ways. But I also say clearly that I have sympathy for those who have for 12 years been too afraid of the Wall Street Con Men and their Internet Goon Squads to do what they know to be right.

People who know that they are on their way to prison are like cornered rats, Anonymous. As you well know. We will beat you in the end and we will never look back. But I will always be willing to take the time it takes to tell the story of why it was so hard to get a nation of good people to take action re this matter. Even good and smart humans are intimidated by threats of physical violence to their loved ones and to threats of career destruction supported by some of the wealthiest and most powerful people in our society.

Wade Pfau loved being able to work with me on the peer-reviewed research that he knew would win him a Nobel prize when it got written up on the front page of the New York Times. But he has two small children to think about. Wade did a very, very, very wrong thing when he agreed to commit financial fraud to get you Goons to stop your attacks. But the threats that were made against him were real and his jury needs to know that and appreciate that when determining the length of his prison sentence.

Or so Rob Bennett sincerely believes, in any event.

My best wishes and warmest wishes to you and yours, Anonymous. Dom’t let the bad guys get you down, my old abusive-posting friend.

Rob

“There Was One Reporter Who Showed a Lot of Interest in Writing a Big Article. He Has a Significant Following on the Internet. We Had Two Very Long Telephone Calls. There Is a Lot of Money Behind Buy-and-Hold. We Are Dealing With People Who Don’t Play Nice.”

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

Do you think you might want to maybe ask…. oh, I don’t know, maybe THE NEW YORK TIMES about that?

I’ve contacted reporters for the New York Times as well as reporters for many other fine publications, Anonymous. A few years back, I was posting the contents of my e-mails to reporters as blog entries here. I bet that, if you did some searching, you could find at least one that went to a New York Times reporter.

There was one fellow whom I wrote to who showed a lot of interest in writing a big article. He was not with the New York Times. But he has a significant following on the internet. We had two very long telephone calls (two hours or so each). We communicated by e-mail probably four times. He asked me for books to read so that he could better understand the background and I pointed him to Irrational Exuberance and A Random Walk Down Wall Street. He asked lots of questions, including a good number of hard questions. That’s a very good sign. Reporters don’t run articles until they have challenged their sources with hard questions. So this guy was close to biting.

He did not end up publishing an article and he was not willing to tell me why. But I can guess.

That journalist (and all journalists who work for the New York Times and all other publications) was in the same spot that Wade Pfau was in when he did his research with me showing that making the switch to Valuation-Informed Indexing reduces the risk of stock investing by 70 percent. Wade very much looked forward to winning a Nobel prize and I am sure that the reporter that I worked with very much looked forward to winning a Pulitzer prize. But at what price?

When you Goons threatened to destroy Wade’s career if he continued to publish honest research and Jack Bogle signaled that he would employ his power and wealth and contacts to support your efforts, Wade thought about his responsibility to provide for his two small children and thought better of the idea of helping millions of middle-class people by doing the job that he was being trained for all of his life to be able to do. I am virtually certain that the same thing happened to the reporter that I worked with. And of course there are numerous bloggers in this field who have told me or showed me that similar concerns drive their decisions about what to write at their blogs.

The 12-year cover up of the errors in the Old School retirement studies is the biggest act of financial fraud in U.S. history, as you well know. Lots of people will be going to prison when this gets out. It will get out eventually. It has to get out eventually or our entire economic system will go down. But how do you think you would feel if you were the reporter who was preparing the article that would tell the world about the most massive act of financial fraud in U.S. history?

And how do you think you would feel if you were that reporter’s editor or publisher?

There’s a scene in the movie All the Presidents Men in which the Ben Bradlee character is telling the Bob Woodward character that he had better not f this up or it might bring down the Washington Post. There’s where we are with the 12-year cover up of the errors in the Old School retirement studies. Lots of people will be going to prison when this story comes out. How far do you think the people who will be going to prison will be willing to go to keep from the American people news of what the last 33 years of peer-reviewed research in this field says about how stock investing works? We are taking about very desperate characters here, Anonymous.

There is a lot of money behind Buy-and-Hold. There is a lot of power behind Buy-and-Hold. There are a lot of connections behind Buy-and-Hold. We are dealing here with people who don’t play nice. We are dealing here with brutally abusive and ruthlessly vicious people. That’s the story. That’s why the New York Times has not run this story as of today.

What’s going to happen following the next price crash? That’s the big question.

I say that the Wall Street Con Men are brutal and vicious and wealthy and powerful and well-connected. But I do not say that that is ALL that is true of them. Jack Bogle tells bits of the truth about stock investing in just about every speech he gives and in just about every article he publishes. Why the f does he do that if he is trying so hard to cover up the truth? It doesn’t make any friggin’ sense, does it?

It doesn’t make sense on a surface level. Bogle is suffering cognitive dissonance, like you Goons. He does not want people to feel free to discuss the peer-reviewed research of the past 33 years. He hates with a burning hate the idea of millions of middle-class investors learning the truth about stock investing. But he is a good man. He is a smart man and a good man. He has devoted his life to helping middle-class investors. He has been responsible for scores of powerful and important insights. He loves his country. He does not want to see this economic crisis take us into the Second Great Depression.

So what do you think he is going to do following the next price crash?

I think he is going to flip. I think he is going to walk to the front of a large room and say the words “I” and “Was” and “Wrong.” That’s when the New York Times will publish its article. It would be better if it did it today. But the editors of the New York Times want Bogle’s okay before going ahead. EVERYONE will be telling the truth about stock investing once Old Saint Jack gives the signal that it is safe to do so. We are all today waiting for Old Saint Jack to make the first move.

I have written to the man. Three times. My good friend Rob Arnott has written to the man. Others have written to him. John Craig wrote to him. Lots of people want Jack to come clean. It would be a wonderful, wonderful thing if he came clean by the close of business today. That would take us off of this very dark path and put us on to a very, very bright path.

I can’t force the issue.

The posts that I write here will help us in the days following the day on which Jack gives his speech. Things will move quicker and smoother because of the articles that I posted in the days before he gave his speech.

This thing is headed to a very good place. I know that that’s so because the only alternative we have to taking this to a very good place is for us to take it to the worst place imaginable and I just don’t see anything in my good friend Jack Bogle’s life story to indicate that that is where he is going to take this. Jack is going to do the right thing. Because he loves his country. Because he doesn’t have any other choice. But, sad as it makes me feel to report this reality, it does not look like Jack is going to do the right thing by the close of business today. WhaChaGawnDo?

Jack and I will be working together at a wicked pace in the days following The Big Guy’s Big Speech. We will be best friends. That will be a blast. That is something that I am looking forward to very much.

I will continue contacting reporters in the days leading up to the next crash. But Jack and the other Wall Street Con Men are very powerful people and I think it would be fair to say that they have made it pretty darn clear what will happen to anyone who speaks out of turn before Jack gives his speech.

That’s where things stand today, Anonymous. I will help any reporter who wants help with this. I will answer any question. But I cannot make it happen by myself. I need Jack’s help to bring on all the wonderful stuff that follows from opening the internet to honest posting on safe withdrawal rates and scores of other critically important investment-related topics. We all would be a whole big bunch better off if Jack and the other Wall Street Con Men and the members of their Internet Goon Squads had never committed financial fraud in the first place.

But we do not have access to a time machine that can take us back to those innocent days, do we?

My best wishes to you and yours, my long-time abusive-posting friend.

Rob

“There Is Some Disagreement on Most Investing Discussion Boards. But the Range of Acceptable Opinion Is Far Too Nartow.”

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

It is fine for people to disagree and this happens almost every day on most of the popular financial boards out there.

There is some disagreement on most boards. But the range of acceptable opinion is far too narrow.

One time I put up a post at a blog in which I described Buy-and-Hold as “a Get Rich Quick scheme.” One fellow posted that he had never heard anyone say that before. That’s the problem.

Shiller didn’t publish his “revolutionary” (his word) research last week or last month or even last year. He published it in 1981. There should be a common understanding today that there is now 33 years of peer-reviewed research showing that there is precisely zero chance that Buy-and-Hold could ever work for a single long-term investor. There isn’t. That’s why there is shock when I say it. People need to hear that message over and over and over again if they are to successfully ignore the constant promotion of the pure Get Rich Quick approach (Buy-and-Hold) by the Wall Street Con Men. The number of times a message is repeated affects how persuasive it is. We need to hear the anti-Buy-and-Hold message repeated as often as the pro-Buy-ad-Hold message is repeated. And we need to hear it being repeated by many different voices.

Todd Tresidder agrees with me on safe withdrawal rates. How often has he gone to the Bogleheads Forum to explain why he thinks the Old School SWR studies are dangerous for investors? He hasn’t done it, Pink. If he did it every day, and if hundreds of others did it everyday, no one would think twice when I warned people of the dangers of those studies. But Todd doesn’t want you Goons attacking his site. So he keeps it zipped; he makes his comments only at his own site. That’s why we are in an economic crisis today.

I don’t play that game, Pink. I love my country. I want to bring the economic crisis to an end. I want millions of middle-class investors to have access to accurate and honest reports of what the last 33 years of peer-reviewed research says.

Greaney said in his study that the ideal stock allocation is 74 percent stocks. The last 33 years of peer-reviewed research shows that 20 percent stocks is a far better choice for the long-term investor when stocks are priced as they have been for the past 18 years. Not everyone at the Bogleheads Forum says exactly what Greaney says. Some say that 90 percent stocks is better. Some say that 60 percent stocks is better. Some even say that 50 percent stocks is better. How many say that 20 percent stocks is better? Very, very few. And those who do tend to say it once and then shut up while those arguing for 60 percent stocks or 70 percent stocks or 80 percent stocks say it over and over and over again.

Those posting research-based views have every bit as much right to express their views as those going with the pure Buy-and-Hold/Get Rich Quick garbage. When threats of physical violence are used to intimidate those who believe in research-based strategies from posting their sincere views, the board becomes a corrupt enterprise. Many posters see that the range of opinion expressed at the board stretches from 50 percent stocks to 80 percent stocks. That makes them inclined to think that 65 percent stocks might be roughly right. If they knew that the only reason why there aren’t hundreds of posters making the case for the research-based allocation (20 percent or perhaps 30 percent stocks), those community members would have a very different belief as to how to go about investing their money.

You are personally responsible for the losses those people will be experiencing in coming days, Pink. This isn’t a case where you permitted the research-based views to be heard on the same terms as the pure Get Rich Quick views. You permitted ONLY Get Rich Quick views. And you didn’t warn people that that was your policy,. You stated in the published rules of the site that honest posting was PERMITTED. You committed financial fraud. So you are responsible for all losses suffered. And you are guilty of a felony under the laws of the United States.

I want no part of it. Going to prison is not high on my bucket list.

Not this boy.

I can’t go for that.

No can do.

Rob