“Does Buffett Support the 12-Year Cover-Up of the Errors in the Old School Safe-Withdrawal-Rate Studies? If Buy-and-Hold Were a Legitimate Strategy, the Errors Would Have Been Corrected Within 24 Hours. Everyone In This Field Lives in Fear of “Crossing” The Buy-and-Hold Mafia. Buffett Will Speak in an Informed and Honest Way When Everyone Else Does, When He Feels That It Is Safe to Do So.”

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

He is clearly a buy and hold supporter.

Does Buffett support the 12-year cover-up of the errors in the Old School safe-withdrawal-rate studies, Anonymous?

Does Buffett support the death threats you Goons have used to intimidate people who have reported on the 33 years of peer-reviewed academic research showing that long-term timing has worked for 140 years of stock market history and is 100 percent required for any investor who hopes to have a realistic hope of long-term success?

Does Buffett support demands for unjustified board bannings? Does he support tens of thousands of acts of defamation? Does he support demands to get academic researchers fired from their jobs?

These questions are silly. Buffett obviously does not support any of these things.

Neither would Bogle if he were not caught in a trap. Neither would Bernstein if he were not caught in a trap. Neither would Burns if he were not caught in a trap. Neither would Pfau if he were not caught in a trap.

The Buy-and-Hold Pioneers put together their strategy at a time when the research had not yet been published on whether long-term timing works or not. All they had was research showing that short-term timing doesn’t work and they jumped to a hasty conclusion that no form of timing is necessary. Shiller proved that hasty conclusion false in 1981. A huge bull market arrived and no one cared for a time that the Buy-and-Holders had gotten it terribly wrong. The economic crisis that follows every time Buy-and-Hold becomes popular arrived in 2008. People have begun to open their minds to new ideas. But one thing holds them back.

The thing that holds them back is The Buy-and-Hold Mafia. Lots and lots of people have beyond to have grave doubts re Buy-and-Hold. But they have witnessed the ruthlessness of the Buy-and-Hold Mafia and they want no part of what happens to those who post honestly on what the last 33 years of peer-reviewed research says re what works in the real world.

If Buy-and-Hold were a legitimate strategy, the errors in the Old School retirement studies would have been corrected within 24 hours. Everyone who works in this field lives in fear of “crossing” the Buy-and-Hold Mafia. So those errors have remained uncorrected to this day. But everyone who has taken five minutes to check the studies has found that they contain no valuation adjustments.

Buffett will speak in an informed and honest way when everyone else does. He will do so when he feels that it is safe to do so.

The Buy-and-Hold Mafia is a criminal enterprise. The Wall Street Con Men have lots of money and lots of power and lots of influence and they have silenced many people. Following the next price crash, they won’t be able to silence us anymore. A big blogger will speak out. Or a major newspaper will detail the 12-year cover-up. Or a venture capitalist will get behind Valuation-Informed Indexing, seeing the fortune there is to be made in providing millions of middle-class investors with true research-based investing advice.

That’s the story. The only thing that can ever change the way things are is for people to speak out against The Buy-and-Hold Mafia. People don’t want to get involved. People are afraid. People find the entire business an ugly business. But there is no other way.

I don’t think that the members of the Buy-ad-Hold Mafia had bad intent. They just didn’t know it all. None of us did. Shiller didn’t publish his research until 1981. That’s just the way it goes sometimes.

The problem is that people who give bad investing advice are subject to legal liabilities if they are found to have claimed that their advice is rooted in peer-reviewed academic research when in reality it is the opposite of what the peer-reviewed academic research shows. The Buy-and-Holders started down a dark path by accident and in time they found themselves so far down that dark road that they elected to cover-up their mistake rather than acknowledge it. Now they are subject to legal liabilities and, in the case of you Goons, prison sentences.

I care. I want to help. But I have zero willingness to commit a felony myself. If I were to say that the Old School retirement studies are legitimate, I would be aiding the 12-year cover-up. That’s financial fraud. That’s a felony. That’s prison time. No can do.

Buffett will tell us his sincere views about Buy-and-Hold when he and all others feel safe to do so. That will be after the 12-year cover-up of the errors in the Old School retirement studies has been exposed and your prison sentence has been decided. At that point, there will be no reason for all of us not to move forward together and we will obviously do just that.

I will continue doing all that I can to bring that day on as soon as possible. That obviously is best for the millions of middle-class people whose lives are in the process of being destroyed by The Buy-and-Hold Mafia. It is also what is best for you Goons. Your prison sentences obviously will be a bit shorter if you come clean prior to the next price crash.

I will obviously be reporting to your jury what you did when the suggestion was made that you ask Bogle to have Buffett review the peer-reviewed research that I co-authored with Wade Pfau. It is obviously an urgent public-policy matter that Buffett share with us all his thoughts on that research. The members of your jury will obviously take into consideration your reaction to the idea when they are deciding your case and the length of your prison term.

The hand of kindness remains extended. The odds that I will agree to take part in the 12-year cover-up of the errors in the Old School retirement studies remain precisely zero.

I wish you well.


“Buffett’s Personal Investing Strategy Is In Direct Conflict with Buy-and-Hold. Buffett ALWAYS Considers the Value Proposition He Is Buying. Buy-and-Holders NEVER Do. The Most Reasonable Explanation for Buffett’s Contradictory Remarks Is That He Has Not Seen the Peer-Reviewed Research That I Co-Authored with Wade Pfau.”

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

The one link you pointed to supports that view, Anonymous. There are other links that tell a different story. Buffett has ridiculed the Efficient Market Theory on numerous occasions. The crazy idea that the Buy-and-Holders put forward that it is not necessary for investors to consider price when setting their stock allocations is rooted in a belief in the Efficient Market Theory. So Buffett has pulled the chair out from under the Buy-and-Holders on numerous occasions.

Also Buffett’s personal investing strategy is in direct conflict with Buy-and-Hold. Buffett ALWAYS considers the value proposition he is buying when he purchases stocks. Buy-and-Holders NEVER do. The peer-reviewed academic research in this field shows that the thing that the Buy-and-Holders need to do to take value propositions into account is to look at the P/E10 level that applies when they set their stock allocations. Do we have any reason to believe that Buffett would oppose the idea of Buy-and-Holders doing the very thing (looking at value propositions) that is the basis for all of his many years of success if he knew that there were an easy way (take five minutes once per year to check the P/E10 level) to do it? We do not.

The most reasonable explanation for Buffett’s contradictory remarks and behavior is that he has not seen the peer-reviewed academic research that I co-authored with Wade Pfau. I think it would be fair to say that, once exposed to the Valuation-Informed Indexing concept, Buffett would experience the same epiphany that Wade Pfau experienced when we began working together and that John Walter Russell experienced when we began working together and that hundreds of others of our fellow community members experienced when they learned about the concept. We need Bogle to bring the study to him by the close of business today.

This is imperative business, Anonymous. The Buy-and-Hold Crisis has put millions of people out of work and winning the endorsement of Warren Buffett for the first true research-based approach would help bring that crisis to an end. And of course there is the matter of the upcoming prison sentences for you Goons. It obviously will not be a good thing for you if your jury hears that you rejected this sensible and positive and constructive and life-affiming suggestion. On the other hand, if Buffett agrees to work with us to get the word out about our “revolutionary” (Shiller’s word) findings, there obviously are going to be some jury members who will view your behavior in a somewhat more forgiving light.

Please keep us up to date on Jack Bogle’s response to your request and on Buffett’s response to Bogle’s entreaties to him.


“I Am Certain That Bogle Can Reach Buffett. The Sensible Thing to Do Is to Provide a Copy of the Peer-Reviewed Research Paper That I Co-Authored with Wade Pfau to Bogle and to Ask Bogle to Pass It Along to Buffett Along With a Request for His Feedback. We All Will Benefit From Hearing What Buffett Says About Buy-and-Hold After Reading the Research Showing that VII has for 140 years Offered Far Higher Returns at Dramatically Reduced Risk.”

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


Buffett recently wrote that individual investors should “ignore the chatter, keep your costs low” and buy an s&p 500 index fund. In doing so, he added, they would earn returns superior to most investors.

Is it your belief that the world’s fourth richest man (who is in his 80s) does not really believe that, but writes it because he’s scared of what people will write about him on investment forums on the internet?

You’re asking an intelligent question, Curious.

I’ll start by saying what I said in response to a similar question that was asked here re Shiller a day or two ago. You should ask Buffett this question. He is likely to be able to shed more light on it than me. Or, if you are not able to reach Buffett, you should talk it over among your friends. We all would benefit from knowing the answer to your question. I’ll give a shot at providing a reasonable answer. But I am not Superman. I am not the only one capable of thinking over this matter. You should be seeking possible answers from lots of people coming at the matter from lots of different perspectives.

Buffett does not believe in the Efficient Market Theory, which is the intellectual construct on which the Buy-and-Hold strategy was built. He has ridiculed it on numerous occasions. That’s important background in trying to think this through.

I of course agree 100 percent with Buffett re the three points re which you quote Buffett. Yes, investors should ignore the chatter. Yes, investors should keep costs low. Yes, investors should buy a S&P 500 index fund. On all those points there is total and complete agreement.

You don’t quote any words in which Buffett says that investors should ignore valuations in setting their stock allocations. The value proposition offered by stocks changes dramatically with changes in valuation levels. There is 33 years of peer-reviewed academic research showing this beyond any doubt whatsoever.

Buffett himself practices Value Investing. Valuation-Informed Indexing is the indexing strategy that focuses on obtaining strong value propositions (as with Value Investing, but obviously far more simple). So there is zero reason to believe that Buffett does not believe that ordinary investors should not be following Valuation-Informed Indexing strategies and avoiding Buy-and-Hold strategies (in which the value proposition being offered by stocks is ignored when stock purchases are made).

VII is the combination of Buffett’s key insight (an investor must pay attention to the value proposition being obtained) and Bogle’s key insight (investing must be kept simple for the vast majority of investors). I have often observed that Buffett and Bogle go together like chocolate and peanut butter.

All that said, I have not heard Buffett openly criticize Buy-and-Hold, which is an exceedingly dangerous strategy according to the last 33 years of peer-reviewed academic research. Is it possible that he doesn’t see how great the danger of Buy-and-Hold is?

I think it is possible.

I didn’t see the dangers of Buy-and-Hold on the morning of May 13, 2002. John Walter Russell didn’t either. Wade Pfau didn’t see the dangers of Buy-and-Hold when he first began working with me. There are obviously millions of smart and good people who today follow Buy-and-Hold strategies. Those people obviously do not appreciate the dangers of the strategy they follow.

Buffett is obviously smart enough to see these dangers. The problem is that he does not hear other people talking about them and he has no particular reason to explore them himself. Buffett is not a Buy-and-Holder. Buffett is not an indexer. So this is not an area on which he spends a lot of time or mental energy.

The answer, as always, is to launch a national debate on these questions. When there is a national debate, Buffett is one of the people who will be adding his thoughts. A national debate will make him sufficiently informed about the various points that he will be able to offer helpful guidance.

I am certain that Jack Bogle can reach Warren Buffett and that Warren Buffett would be happy to spend some time responding to his inquiries. The sensible thing to do here is to provide a copy of the peer-reviewed research paper that I co-authored with Wade Pfau to Bogle and to ask Bogle to pass it along to Buffett along with a request for his feedback. We all will benefit from hearing what Buffett says about Buy-and-Hold after reading the peer-reviewed research showing that Valuation-Informed Indexing has for 140 years offered far higher returns at dramatically reduced risk.

VII is superior to BH in ever possible way, Curious. Getting Buffett’s feedback on the paper helps us all. If he agrees that VII is far superior, having him say so obviously helps us all by getting the word out to millions of investors who need to know this. If Buffett sees some problem with how the research was done that was not noted by the peer-review committee that approved it, that is obviously something that Wade and I and the peer-review committee need to know.

Are you willing to help bring the matter to Bogle’s attention so that we can get the feedback from Buffett that we all need to hear? I think it would be a truly positive and constructive and life-affirming step for you to agree to help us all (including yourself) out with this important matter.


“It Is Possible That a Big Reason Why the Buy-and-Hold Pioneers Did Not Say That Price Should Be Considered in the Setting of One’s Stock Allocation May Have Been a Feeling That It Would Be More Simple to Have Investors Stay at the Same Stock Allocation at All Times. Valuations Were at Rock-Bottom Levels. There May Have Been a Feeling That No Harm Was Being Done.”

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

I should add that I think it is possible that a big reason why the Buy-and-Hold Pioneers did not say that price should be considered in the setting of one’s stock allocation may have been a feeling that it would be more simple to have investors stay at the same stock allocation at all times. Back in the early 1980s, when Shiller published his research, valuations were at rock-bottom lows. People may not have been able then to imagine the P/E10 ever going above 20 again. There may have been a feeling that there was no harm being done in ignoring valuations.

If that is the case, the idea didn’t work. We not only went to 20. We went to 44. Things got out of hand. And it was Buy-and-Hold that caused things to go out of hand. People saw stocks delivering big payoffs and they of course liked that. They never heard the other side of the story, that unjustified payoffs lead to big problems down the road. Now that we are living through the big problems, more and more people are coming to believe that ignoring price didn’t turn out to be such a hot idea.

I like your comment because it is at least rooted in something real, Sensible. I think this simplicity concern was probably a real consideration in why things were done the way they were done. People were not bad to want things to be simple. But people need to accept that it was a mistake or at least that there is a POSSIBILITY that it was a mistake. No one gets it all right in the first draft. THere is a lot of interest among investors in the idea of incorporating valuations into their strategy. We have to permit discussion of the idea. To not do so makes people look unethical. THat’s not a line you want to cross.

It makes sense to tell people to limit their valuation-induced changes. I can see something like that being done for the sake of simplicity. And it is entirely possible for VII to work with only one valuation change every ten years or so on average. But people need to know when things get out of hand. The problem with not looking at valuations at all is that you look up one day and the most likely annualized 10-year return is a negative number. None of us should ever want to see that happen.

Bogle says that allocation changes for valuation reasons can be considered six times in an investor’s lifetime. That’s exactly correct. That’s once every ten years or so. The problem is that Bogle says that the changes should not be more than 15 percent. That’s not even close to being right. In 1982, the most likely annualized return was 15 percent real. In 2000, it was a negative 1 percent real. 15 percent just doesn’t do it.

But that’s the only point on which there is a difference between me and Bogle. And if we had all been calling for occasional allocation changes (once every 10 years on average) all along, we never would have hit 44. We hit 44 because people just stopped worrying about valuations. Had people been aware of the danger, we might have been able to get away with allocation changes not much greater than 15 percent.

There’s a lot of common ground here. If people came to this with good intent, it could all be worked out with mutual respect and warmth. If you are signaling a willingness to play it that way, I obviously am 100 percent on board. You next post will tell the story. If people want to work it out, it certainly can be worked out. The hard part is getting people interested in following a path that leads in time to a mutually positive result. Anyway, I am certainly supportive of the idea of taking such a path.


I’ll take this a step further.

Bogle has said that changes should not be more than 15 percent. That’s not enough to get the job done. But I think it could be possible to come up with a reasonable approach that doesn’t ever call for changes too much bigger than that.

Benjamin Graham suggested a 75-50-25 scheme. So long as the investor is always sure to not wait until things are so out of hand that he needs to make two switches at once, he would never need to make a switch of more than 25 percent under the Graham scheme. That’s not far off from what Bogle has recommended and the additional change can be justified on grounds that valuations ended up getting more out of hand in recent years than people realized they would in earlier days.

I’ll see what comes back.



Goon Poster: “You May Be Surprised to Hear This From Me, But, Yes, Valuations Do Matter. Bottom Line Is Your Approach to Investing Takes Something That Works and That Is Simple and Makes It Needlessly Complicated.”

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

You may be surprised to hear this from me but yes valuations do matter. There are a number of indexers who believe that the reason you shouldn’t invest in individual stocks is because it’s straight-up gambling and even Warren Buffett himself is nothing more than a lucky gambler. Buffett of course has repeatedly mocked these true believers in the Efficient Markets Hypothesis in his letters. He doesn’t mind them because he figures if his competition isn’t even trying, it’s easier for Berkshire.

But indexing is a different beast than individual stocks. You’ve probably heard of Bogle’s phrase “the majesty of simplicity”. Simplicity is what truly makes indexing special. Any idiot can do it and be a success. Market timing, while possible, is much harder than many people including you seem to think it is. If market timing was so easy then I’m sure you wouldn’t have missed the 2009 buying opportunity. Thing is as hopeless as you (and I, and many others) are with this stuff all is not lost. Over time buying and holding the index has yielded very good results, results superior to those of most who either pick their own stocks or buy managed funds. Buffett can beat the index, one of my favorite bloggers a young Buffett wannabe Joshua Kennon can beat the index. These people are the exception, not the norm. Buffett (and Kennon) both realize this and that’s why, even though they reject some of the core beliefs of indexers, they recommend indexing for almost everyone else.

Bottom line is your approach to investing takes something that works and that is simple and makes it needlessly complicated. The end result of VII is the opposite of what you intend it to be. Just look at your own performance over the past 18 years and compare it to any diligent indexer’s performance.

We are in complete agreement re the need for simplicity, Sensible. That’s what I love about Bogle. He is the only major figure who cares enough about the little guy to devote his efforts to promoting a simple approach. If I thought that VII were more complex than Buy-and-Hold, I would not advocate it.

VII is more simple.

Buy-and-Hold is an emotional roller coaster. One day you are riding high, the next day your retirement account is wiped out. That’s not simple. That’s panic-inducing. For a strategy to work long-term, it has to take human emotions into account. Ignore human emotions and you make the thing 10 times more complicated than it needs to be.

The research that Wade and I co-authored shows that the biggest portfolio loss ever suffered by a Valuation-Informed Indexer is 21 percent. For the Buy-and-Holder it is 61 percent. The strategy where you see 61 percent of your life savings wiped out is the more complex strategy.

Even Bogle acknowledges that investor should aim to Stay the Course. Investors who are permitting their risk profiles to jump around wildly are not Staying the Course in any meaningful way.

But say that an angel came down from heaven and told us you were right. You should STILL be in favor of permitting honest posting. If you are right, people will see that and have even more confidence in Buy-and-Hold after hearing both sides of the story. Your opposition to the idea of permitting honest posting shows that you lack confidence in Buy-and-Hold. If those who advocate Buy-and-Hold lack confidence in it, how should those who are critics of it feel about it?

If you were making an argument against short-term timing on simplicity grounds, I would agree strongly. There’s no place for it for the average investor. Long-term timing is not even a tiny bit complicated. You have to spend five minutes per year checking the P/E10 level. Then once every 10 years or so, you need to make an allocation change. For the peace of mind that comes from knowing you will never see a portfolio drop of more than 20 percent, those five minutes per year are the best five minutes you will ever spend on investing stuff.

There is nothing even a tiny bit complicated about long-term timing. What is complicated are the convoluted arguments that Buy-and-Holders try to come up with to persuade people that it is not necessary.

And this goes beyond just giving advice for ordinary investors. Greaney was pushing his SWR study to early retirees. There were people at the Motley Fool board who believed that study was accurate. Those people are today well down the path to suffering failed retirements. No desire for simplicity can justify something like that.

If there are investors who find Buy-and-Hold more simple, it is certainly their business. They should go with what sounds good to them. But no desire to market something as simple can justify deception on a fundamental issue. We need to be honest with people. That is 100 percent imperative. There never should have even been any question about that.

VII is perfectly simple. The only reason you are being stubborn about it is that your pride is hurt. If those of us who believe in research-based strategies had warned people of the dangers of high valuations back when valuations first went to insanely dangerous levels, we would not be in an economic crisis today. We all would be 50 times better off. People don’t find it complicated to consider price when they buy a car or a sweater or a banana. There’s no reason why they should find it complicated to consider price when buying stocks either.


“The Most Important Economic and Political Issue Before Us Today is the Question of Whether Fama or Shiller Is Right. We Should Be Discussing That at Every Board and Blog on the Internet Every Day. Going By How You Buy-and-Holders Act, One Would Think That Nothing Has Happened.”

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

Rob, Shiller never called it a Ponzi scheme.

You’re wrong, Anonymous. You need to read the book. And lots of others need to start talking more frankly about the difference between the model rooted in Fama’s research (Buy-and-Hold) and the model rooted in Shiller’s research (Valuation-Informed Indexing). Both Fama and Shiller were awared the Nobel prize. They teach opposite things. So they can’t possibly both be right.The most important economic and political issue before us today is the question of whether Fama or Shiller is right. We should be discussing that at every board and blog on the internet every day. We all need to know the answer to this one. The only possible way to figure it out is to talk it over.

Say that Bogle truly believes in Buy-and-Hold (I believe he does). He should get up on stage, talk about the arguments that Shiller and I make as to why Buy-and-Hold is a Ponzi scheme and then respond to them. Then all the people listening in get to decide who is right and how to invest their retirement money. That’s how our system works.

Shiller identifies his findings as “revolutionary.” Please tell me one way in which Buy-and-Hold has changed as a result of these revolutionary findings. There is not one. Buy-and-Hold today is the same thing as it was before Shiller published his research or wrote his book. Going by how you Buy-and-Holders act, one would think that nothing has happened. Your claim that Shiller has not identified Buy-and-Hold as a Ponzi scheme lacks credibility because you cannot identify any way that anything that Shiller has said has had any effect on anything. So far as the Buy-and-Holders are concerned, Shiller has never said anything that wasn’t known to the Buy-and-Holders long before Shiller published his research.

I say otherwise. I say that Shiller is right that his findings are “revolutionary.” I say that Shiller’s research has changed everything we know about how stock investing works in a fundamental way. I say that Buy-and-Hold needs to be entirely redone to reflect the last 33 years of peer-reviewed research in this field.

And I say that I have every right to talk about the implications of Shiller’s findings on every discussion board and blog on the internet. The continued promotion of investing strategies that have been entirely discredited by the academic research for three decades now is killing us. We need to move on. There are millions of people whose lives have been ruined by the Buy-and-Hold Crisis and we all need to start pulling together to help them. If we don’t, we will be getting a taste of what it is like to be in their circumstances when the continued promotion of Buy-and-Hold brings on the next price crash.

Do you ever stop to think that maybe you are wrong, Anonymous?


“I Am Not the One Who Is Alone. If I Were Alone, I Would Pose No Threat to You Goons. It Is Precisely Because There Are So Many Millions Seeking to Understand for the First Time How Stock Investing Really Works That You Hate Me With Such a Burning and All-Consuming Hate.”

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

Rob, you seem to be alone in this VII crusade. Haven’t you ever considered that you might be wrong about this?I have considered whether I might be wrong and looked for evidence to support that view every day of the past 12 years of my life, Sensible.I am not alone.

My work is rooted in the research of Yale Economics Professor Robert Shiller. Shiller was awarded the Nobel prize in Economics last year. Having the support of a winner of the Nobel prize in Economics ain’t being alone.

I am the co-author of the most important piece of peer-reviewed research published in this field in the past 30 years. Having your name on a piece of research that shows millions of middle-class investors how to reduce the risk of stock investing by 70 percent ain’t being alone.

I have over 200 quotes posted at the “People Are Talking” section of the site. Many of the quotes are by top-name experts in the field. Having that many supportive quotes by top-name experts ain’t being alone.

Jack Bogle, whom I rank as the second most important figure in this field, thinks enough of my work that he went along with having the entire Bogleheads Forum moved to another location rather than take the risk of appearing at an event with me in which he would be expected to respond in an effective way to my questioning. Impressing the second most important figure in the field to that extent ain’t being alone.

Former Financial Analysts Journal Editor Rob Arnott wrote me to tell me that my investing ideas are “sound.” That ain’t being alone.

Thousands of my fellow community members have expressed a desire that honest posting be permitted on our boards and blogs so that they can hear what I have to say about how investing works. That ain’t being alone.

Millions of people lost their jobs in this economic crisis, an economic crisis that my work shows was caused by the reckless promotion of Buy-and-Hold strategies. Those millions all want what I have to offer to become known to every person on this planet. That ain’t being alone.

Thousands of entrepreneurs saw their businesses fail in the Buy-and-Hold Crisis. Those thousands want what I have to offer to become known to every person on this planet. That ain’t being alone.

Millions of people from both the left (The Occupy Wall Street Movement) and the right (The Tea Party Movement) have begun to lose confidence in the ability of our political system to be responsive to the concerns of millions of its citizens because of the foolishness we saw in the wake of the onset of the economic crisis with people ignoring the obvious cause of the crisis (Buy-and-Hold caused $12 trillion in Pretend Money to be created and the loss of that $12 trillion in buying power caused the economy to collapse) want what I have to offer to become discussed at every board and blog on the internet so that we can begin to see some healing. That ain’t being alone.

Millions of middle-class people are in the process of seeing their retirements fail as a result of the 12-year cover-up of the errors in the Old School safe-withdrawal-rate studies. Those people are looking for the explanations of what happened to them that are contained in the thousands of pages of this web site. That ain’t being alone.

I’ve written e-mails to 30,000 academic researchers letting them know about the threats you made to intimidate Wade Pfau into silence on the realities of stock investing when he “crossed” you by publishing honest research and a good number of them sent back to me exceedingly kind and intelligent and helpful responses. That ain’t being alone.

I gave a presentation to the last Financial Bloggers Conference reporting on why Buy-and-Hold is the past and Valuation-Informed Indexing is the future and heard the applause of hundreds of my fellow community members learning about the truth in this area for the first time and enjoyed the hours of discussion of these issues that followed from a small group that came up to share a beer with me after the event. That ain’t being alone.

I have written scores and scores of Guest Blog Entries which have inspired wonderful, thought-provoking discussions and which earned me the effusive praise of my peers. That ain’t being alone.

I have done work that fulfills the boyhood dream of my good friend and hero Jack Bogle, making the change in his model for understanding how stock investing works that makes his approach workable in the real world for the first time. Thousands of my Buy-and-Hold friends have been looking for years for the resolutions to the contradictions in the Buy-and-Hold concept that were needed to make that long-deferred dream a reality and those people will be celebrating my work for many decades to come. That ain’t being alone.

I am alone in only one sense.

People are afraid to speak out about the intimidation tactics of you Goons. People hate seeing death threats. People hate seeing demands for unjustified board bannings. People hate seeing tens of thousands of acts of defamation. People hate seeing threats to get academic researchers fired from their jobs. I am not entirely alone even on that score. I share the feelings of repulsion that virtually every person living on this planet feels toward that sort of behavior. The only sense in which I am alone even in this respect is that I believe that the way to overcome you Goons is to expose your behavior to the sunlight. Most others are still too afraid to speak up. That will change following the next price crash, when they see how serious the threat is that you pose to our way of life. Then I will not be alone even on that score.

You are the one who is alone, Sensible. You are the one going to prison. To be sent to prison is to have your peers reject you completely, to have the society you live in declare that your behavior is so sub-human that you can no longer be permitted to walk freely among others. That is an isolation that I don’t wish on my worst enemies (and indeed I have worked hard to get your prison sentence reduced to the extent possible).

I have a battle to fight. There is evil in the world. There have always been people who see the accomplishments of others and feel drawn not to learn from them and achieve great things on their own but to equalize things by tearing down the good work that in their minds makes them look small and insignificant. But I am not the one who is alone. If I were alone, I would pose no threat to you Goons. It is precisely because there are so many millions seeking to understand for the first time how stock investing really works that you hate me with such a burning and all-consuming hate.

Bernie Madoff is alone, Sensible.

And you are Bernie Madoff times 5,000.

I want no part of it.

I offer the hand of kindness. Always. But not once in 12 years have I given a second’s thought to betraying my country. I won’t do that in the next 12 billion years either.

Why? Because when I violate the laws of the United States, when I betray my country, then I truly become alone in a way that I never want to be alone.

The people of the United States are traveling down some rocky road today. That much is so. We will overcome. We will prevail. It is those who doubt that our economic and political systems work any longer who will find themselves in days to come the lonely ones.

We humans made a mistake. It happens. We will figure things out and we will turn things around. You are too far down the dark path to turn around. To be lost in that terrible dark place must be a lonely feeling indeed.

I ask myself every day whether I have gotten something wrong, Sensible. Every day. Because I never want to find myself in the lonely place that you find yourself in today.

When I discover that I have gotten something wrong (it has happened on a few occasions over the past 12 years), I quickly ask to be able to come to the front of the room and say the magic words “I” and “Was” and “Wrong.” Because those words end the loneliness. Once I have said those words, I no longer have anything to hide. Once I say those words, I am again playing a role in the community of people living under an economic and political system that works.

I pray that I never face a temptation to play it the other way. I am a flawed human and so I cannot dismiss entirely the possibility that it could someday happen. So I pray. Not as often as I should but now and again at least. I will have to hope that that gives me enough strength to make it safely to the other side.

And I pray for you, my lonesome friend. I pray that there is a spark of kindness within you for your friends and co-workers and neighbors and fellow community members that will one day save you. It happens. People tell me to give up on you Goons. I don’t feel comfortable giving up on anyone. That’s not the answer. Love is the answer. Love is the thing that keeps me from feeling alone through those times when a good number of my friends are afraid to speak up.

Love prevails in the end, Sensible. You cannot fathom how, but it does. You keep forgetting that I read the last page of the story before I dared to venture forward with that crazy-brave post of the morning of May 13, 2002. I would have had to have been off my meds to have dared try that one without reading the last page first! I mean, come on!


“Shiller Is a Great Guy, As Bogle Is a Great Guy. Ask Them Your Questions! Put Them on the Hot Seat! You Are Helping Shiller and Bogle When You Do This. They Both Want to Help People. They Both Have Blind Spots.”

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

Is Shiller emotional since he is heavily invested in the market?Shiller certainly has emotions. All humans have emotions.The statement you are referring to is one in which Shiller said that he is currently going with a 50 percent stock allocation. That is certainly on the high side for where things stand today. But it is possible for someone with particular stock-picking skill to do not awful with a 50 percent stock allocation even at today’s prices. I think a 30 percent stock allocation would make more sense today. But I wouldn’t call a 50 percent stock allocation an insanely “heavy” allocation.

That said, you are making a good point in noting that Shiller’s stock allocation does not seem entirely consistent with the things he wrote in his book about how stock investing works. Why don’t you bring the conflict to Shiller’s attention and see if sense can be made of it?

You want to know how stock investing works, don’t you? Why not try to find out what Shiller is thinking? I can speculate. But Shiller knows better than I do what he is thinking. Perhaps he will say something that will help us all come to a better understanding.

The sense I get is that you don’t want to know. Bogle puts forward tons of contradictions in his public statements. None of the Buy-and-Holders ask him about them. It’s the same with Bernstein. It’s the same with Swedroe. Now you are focusing on Shiller. Ask!

And reporters should be asking! Isn’t that the darn job? Don’t we want to know? Don’t we want to work through the puzzles that present themselves to us and learn now to become better investors?

Ask! And don’t accept answers that don’t add up. Ask and then ask again until you have something that makes sense.

I am NOT suggesting that you be rude or that you try to hurt Siller’s feelings or Bogle’s feelings or anyone else’s feelings. Yes, Shiller is emotional, as you suggest. Perhaps he doesn’t see some of his own contradictions. Many of us are blind to our own contradictions. If you point them out to him, he may well enjoy a great learning experience. And he may share that experience with you and with lots of others.

There is never any harm done by asking any of these questions to the people who are far more likely to know the answers than I am. You direct them to me because you hate me and because you want to trip me up. But you should not be spending your time hating people on the internet or trying to trip up people on the internet. You should be spending your time trying to get answers to these questions. And you are more likely to get good answers by asking Shiller than you are by asking me.

I sometimes feel that we are under a spell. The Buy-and-Holders did lots of wonderful things. Then they made one mistake. Then lots of people were hurt by that mistake. And somewhere along the line a wicked witch cast a spell on us that we would never say the words “I” and “Was” and “Wrong.” Instead, we would just let the mistake take us lower and lower and lower until we were totally destroyed.

Shiller is a great guy, as Bogle is a great guy. Ask them your questions! Put them on the hot seat! Don’t take phony baloney explanations for answers. Dig deep. Find out what is really going on.

You are not just helping yourself when you do this. You are helping Shiller and Bogle too. They both want to help people. They both have blind spots. They both need to be put on the hot seat from time to time to do their best work.

That’s my sincere take, in any event.


“Jack Bogle Is Afraid of Rob Bennett. He Doesn’t Believe That He Can Offer Good Answers to My Questions. That’s Sad.”

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

Don’t worry. Jack, Larry, Wade and Bill aren’t afraid. They are just fine.

Their behavior tells a different tale, Anonymous.

The entire Vanguard Diehards community was moved over to the Bogleheads Forum when I announced that I would be attending the annual meeting and asking Jack some questions about the effect of valuations on long-term returns.

That happened because Jack was afraid to be in the same room with me and to try to answer the questions that he knew I would put to him.

Nothing could be more obvious.

When one of the leading figures in investing analysis is afraid to face questioning from some fellow whose only claim to expertise in this field is that he figured out how to get his words posted to the internet, there is a good bit of funny business going on.

Jack Bogle is afraid of Rob Bennett. He doesn’t believe that he can offer good answers to my questions. That’s sad. All of us who are Jack’s friends should be trying to do something about that.

My sincere take.


“My Famous May 13, 2002, Post Ended Not With a Period But With a Question Mark. That Was Fear. My Apology on the Night of Day Three Was Rooted in Fear. I Held Back for a Long Time From Saying That I Know More About How Stock Investing Works Than Jack Bogle. That Was Fear. I Held Back for a Long Time From Saying That You Goons Are Headed to Prison. That Was Fear. There Is No Intellectual Debate Here. It’s All About Fear.”

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

The lack of any supporting comments on this board speaks volumes, Rob. No, people are not afraid to post here as they would be anonymous.

The lack of supporting comments certainly tells us something important, Anonymous. You and I do not agree re what it tells us. But we are 100 percent in agreement that it is a telling reality.

You are of course correct that people are free to post anonymously here. So it is not that they are afraid that the Goons are going to come after them and kill their family members or whatever. That is not the sort of fear we are dealing with in this case.

We’ve talked about Joe Taxpayer recently. I have said that I would like to see more from him. He had been supportive. He opposes the Ban on Honest Posting. But I would like to see him go another step. I would like him to write a blog entry saying that he thinks the Ban on Honest Posting is a shameful thing and that all bloggers should oppose it. I would like him to try to organize all his blogger friends to speak up against this stuff.

Is Joe afraid? Yes, he is afraid. If he wasn’t afraid, he would do what I describe above.

He is not as afraid as some others. He worked up the courage to say that he believes the Ban on Honest Posting is wrong. He worked up the courage to call you Goons out on your nonsense. So he is less afraid than most. But he takes some steps and then he fails to take others. He is a hero. But he is not a perfect being. None of us are, of course.

I was afraid. I didn’t post about the errors in the Old School studies from May 1999 to May 2002. What do you think was up with that? It’s hard to believe today that I kept it zipped all that time, isn’t it? But I did. Why? What was I afraid of? I never dreamed that any of the Goon stuff that we have seen over the past 12 years was even remotely possible back in those days. But I never spoke up. Why? What held me back?

Humans are social creatures.

If you don’t get that, you cannot get any of the rest of it. That part is fundamental.

Bull markets are social phenomena.

You could never have a bull market if people were not afraid to speak up. We obviously had a huge bull market. So there obviously were a lot of fearful people. That’s by definition. You know that just by looking at the P/E10 level. When you have a P/E10 level of 44, you have millions of fearful people. You couldn’t have it any other way.

It’s not cartoonish things that people are afraid of. People are not afraid that you are going to come to your house and shoot them. People are afraid that they will be out of step with the majority. People are afraid that lots of people will think they are dumb. People are afraid that people will yell at them. People are afraid that, if they talk openly about another crash, that will somehow cause one to come. People are afraid that we are going to see a deepening of the economic collapse and don’t want to talk about it or hear about it because it scares them. People are afraid that there are groups starting to lose confidence in our political system. People are afraid that they will not have enough money to retire and that they will lose access to the comfort offered by the Buy-and-Holders if they think things through carefully and come to realize why those comforts are illusory.

People are afraid of all sorts of things, Anonymous.

Wade talked about it in the comments he posted here after his flip. He wrote one on which he said: “I don’t see how you are going to end up being seen as the good guy.” He said almost the same thing at the Bogleheads Forum. He said: “Some of you see anyone pushing market timing as a snake-oil salesman and you are disdainful of it. I don’t want you to think of me that way.”

He does’t want you to dislike him, Anonymous. That’s his fear.

I know how it goes. I don’t want you to dislike me either. The difference with me is that I have an even bigger fear of selling out my fellow community members. I feel that I am worthless to you and to everyone else if I do not post honestly. So I stick to that one no matter what. I don’t give an inch on that one.

My famous May 13, 2002, post ended not with a period but with a question mark. That was fear.

My apology on the night of Day Three was rooted in fear.

I held back for a long time from saying the words “analytically invalid.” That was fear.

I held back for a long time from saying that I know more about how stock investing works than Jack Bogle. That was fear.

I held back for a long time from saying that you Goons are headed to prison. That was fear.

It’s all about fear. There is no intellectual debate here. If you Goons believed that Buy-and-Hold could survive a civil and reasoned debate, you would invite a civil and reasoned debate. You don’t believe that for two seconds. You believe that Buy-and-Hold can survive only for so long as effective challenges to it are prohibited. That’s why you behave as you do.

You follow Buy-and-Hold yourselves. Following a strategy is a sign that you believe in it. You pass that test. There is a sense in which you believe.

But you do not possess confidence in the strategy you follow. It causes you great emotional pain to hear it challenged effectively. Confidence is another marker of belief. You fail that test. There is a sense in which you do not believe at all.

You are in the worst of all worlds. You believe enough that you cannot bear to listen to challenges. So you will stick with Buy-and-Hold until prices are at rock bottom. But you lack the confidence to continue holding when prices hit rock bottom and when every media organ is saying that no middle-class person should ever even consider putting money into stocks. The same social pressures that caused you to tune out the last 33 years of peer-reviewed academic research will cause you to sell your stocks when prices hit rock bottom.

That’s called capitulation. It’s when the last Buy-and-Hold Goon sells his shares that the market (that’s us!) is able to turn up again for an extended period of time.

You happened to be born at a time that led to you investing heavily in stocks at the worst time in history for doing that. You know it on one level of consciousness (while fiercely denying it on another). You are scared out of your freakin’ wits. So scared that you can’t even let it in that you are scared at all. And you will be even more scared after the next crash.

I didn’t do any of that to you.

I don’t say that the people who did it to you meant to hurt you. I don’t believe that. Those people are scared too.

I say that I am not playing my role if I don’t post honestly. I am saying that it cannot possibly be the right answer for me to agree to say things I don’t believe for two seconds.

And I wish you well in all your future endeavors, my old friend.