“Rob Arnott Copied Bogle on His E-Mail to Me Referring to the Article That I Wrote on The Silencing of Academic Researcher Wade Pfau by the Buy-and-Hold Mafia. Bogle Obviously Would Have Felt a Responsibility to Learn All He Could About This Massive Act of Financial Fraud Given That It Was Conducted By People Who Follow and Promote His Investing Strategies.”

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

I am certain that Jack has devoted a good bit more than one minute’s thought to my demand that every board and blog on the internet be opened to honest posting on SWRs and many other critically important investment-related topics and to my request that he get the ball rolling by walking to the front of a large room and giving an “I Was Wrong” speech.

Certain based on what evidence? 

1) The question of whether honest posting should be permitted on the safe-withdrawal-rate matter dominated discussion at the Vanguard Diehards board for the 18 months during which I posted there. There were some days in which there were four or five different threads examining some aspect of this general question. Jack said that he visited that board weekly to check out what was being said. It is impossible to imagine that he was not exposed to NUMEROUS threads discussing this matter.

2) Jack obviously reads the Wall Street Journal. A few years after the ban was imposed at Vanguard Diehards (which became the Bogleheads forum), the Journal published an article saying that I was right all along re the SWR matter. Jack obviously saw that article and regretted the many acts of financial fraud that had taken place at a discussion board bearing his name.

3) Before honest posting was banned, there were community members arguing both for and against the ban who contacted Morningstar, Vanguard and Jack Bogle.

4) When Morningstar refused to ban honest posting at Mel Lindauer’s urging, Lindauer asked the entire board community to move to a private board where he and his Goons could control who was able to speak and what they were able to say. Bogle obviously noticed that the entire board community was moved to a different location.

5) After the board community was moved, a number of community members who liked the idea of honest posting being permitted remained at the Morningstar site and asked that honest posting be permitted there. Lindauer hotly opposed the idea. Again, both sides contacted Morningstar, Vanguard and Bogle.

6) Lindauer had been using threats of physical violence to intimidate community members who tried posting honestly for years before I came on the scene. It is all but impossible to imagine that some of these incidents did not come to Bogle’s attention.

7) I wrote Bogle three times asking him for help with the Lindauer matter.

8) Larry Swedroe was banned for a time for the “crime” of posting honestly. This would obviously be brought to Bogle’s attention.

9) When Wade Pfau posted honestly about the research that I did with him, Lindauer accused him of engaging in unethical research practices. This was obviously both a crime (financial fraud) and a tort (defamation). It is hard to imagine that Linduaer would engage in this behavior without first having assured that Bogle would be backing him up.

10) You Goons have yourselves interpreted Bogle’s failure to act re your numerous acts of financial fraud as an indication of his support. Why would Bogle permit his reputation to be damaged in this way if he was not aware of the threat to Buy-and-Hold represented by my call to permit honest posting on safe withdrawal rates?

11) Bogle knows about the Bennett/Pfau research showing the superiority of Valuation-Informed Indexing over Buy-and-Hold. He obviously would be doing all he could to make every investor alive on the planet aware of it if he were not involved in the cover-up himself.

12) At the first meeting of the Vanguard Diehards held after the Ban on Honest Posting was adopted, numerous questions about the effect of valuations were asked of Bogle. He obviously would be curious as to why this had suddenly become such a hot topic.

13) Bogle obviously saw the article by Bret Arends in the Wall Street Journal pointing out that the Buy-and-Holders have “left out half the story” re what the research says about how stock investing works. Again, he made no effort to publicize this hugely important article. If he were not involved in the cover-up, he obviously would have done so.

14) Bogle gave an interview to the Index Universe site in which he referred to my claim that the need to change one’s stock allocation in response to big valuation shifts is a strategic need rather than a tactical need. I am the only one who has said that. He picked up that language from listening in on the discussions held at the various forums.

15) In that same interview, Bogle said that allocation shifts are needed six times in an investor’s investing lifetime, three times when valuations are stupidly high and three times when valuations are stupidly low. Again, this is a claim that I had been making for years that he picked up from our discussions.

16) Bogle included language in his book that helped me understand that the Old School SWR studies got the numbers wildly wrong. He obviously read his own book.

17) Bogle gave an endorsement to Bill Bernstein’s book, in which Bill said that two percentage points needed to be subtracted to get the accurate safe withdrawal rate at the time he was writing the book because of the high valuation that applied at that time. Bogle would not have endorsed the book without reading it. So he knew all along (Berntein’s book was published in April 2002) that the Old School SWR numbers were wildly wrong.

18) Bill Bernstein said in an e-mail to Ataloss that it was his view that anyone who used the Old School studies to plan a retirement would have to be out of his or her mind. Bernstein and Bogle are friends and the cover-up of the errors in the Old School studies is the biggest act of financial fraud in U.S. history. It is impossible to imagine that Bill did not let Jack know of his views on the SWR matter, given that the errors in those studies are in the process of causing millions of failed retirements.

19) Shiller’s book is available in public libraries and was widely reviewed when it was published. Bogle either read the book himself or had someone who had read it describe its contents to him.

20) Shiller was awarded the Noble Prize in Economics for his “revolutionary” (Shiller’s word) findings. Bogle obviously would have been curious to know how Shiller’s revolutionary findings discredited Bogle’s investing ideas.

21) Rob Arnott copied Bogle on his e-mail to me in which he told me that my investing work is “Solid.” Arnott is a personal friend of Bogle’s. So he obviously read the e-mail.

22) Arnott’s e-mail referred to the article that I wrote on The Silencing of Academic Researcher Wade Pfau by the Buy-and-Hold Mafia. Bogle obviously would have felt a responsibility to learn all he could about this massive act of financial fraud given that it was conducted by people who follow and promote his investing strategies.

23) One of my e-mails to Bogle described unethical practices being followed by the owners of the Bogleheads Forum. Again, Jack would obviously want to know about felonies being committed by people who owned a board carrying his name.

24) Michael Kitces told me following the 2008 crash that many practitioners where talking amongst themselves about the need to come clean about the dangers of Buy-and-Hold strategies. Word of this would obviously have gotten to Bogle given that he is viewed as the lead advocate of this strategy.

25) Arnott’s e-mail described acts of intimidation by Buy-and-Holders that have been experienced by Arnott. Again, the e-mail was forwarded to Bogle, who is a personal friend of Arnott’s.

26) You Goons have been trying for 12 years to “persuade” me to post dishonestly re the SWR issue. You are at obvious risk of going to prison for financial fraud. It is more than a little hard to believe that you would put yourselves at such great personal risk without some promises of protection from Bogle.

27) I wrote to 30,000 academic researchers to let them know about the intimidation tactics that the Buy-and-Hold Mafia used to silence Wade Pfau. It is all but impossible to imagine that none of these people alerted Bogle. I even received responses from people who have posted to the Bogleheads Forum. Are we to believe that those people contacted me and not Bogle?

28) Vanguard’s research arm recently published a study showing that valuations (as measured through use of the P/E10 metric) predict long-term returns. Bogle founded Vanguard. It is hard to imagine that he would not be informed of the publication of a study by his own firm that discredited the investing strategy that he has been promoting for decades now.

He knows, Anonymous.

I don’t say that he knows every detail. I don’t believe he does.

And I don’t say that he doesn’t rationalize his bad behavior in his own mind. I believe that he does.

But it is silly to pretend that my good friend Jack Bogle does not possess a basic understanding that there has been a huge cover-up of the errors in the Old School retirement studies and a basic understanding that he has a responsibility to take prompt and effective action re this matter.

We will all learn more when he is put under oath.


Valuation-Informed Indexing #196: The Folly of Making Use of “Indicators” of Future Stock Returns Other than P/E10.

I’ve posted Entry #196 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Folly of Making Use of “Indicators” of Future Stock Returns Other than P/E10.

Juicy Excerpt: I think that it is because people are worried that if they say risk is sky-high when the P/E10 level is at 25 and then it rises to 35, as Shiller properly notes it might, they will be blamed by investors for being “wrong.” Reporting that stock-market risk is sky high today is right and not wrong and it doesn’t matter whether the P/E10 level rises to 35 or not. The risk is what it is. No amount of price rises can retroactively change the reality that risk is sky-high today. People need to know that and the experts in this field who fail to tell them this reality are not doing their jobs.

The problem on the part of the investors is that they have a short-term focus. They want to know how stocks are going to perform over the next year or so and that’s something that we just do not know. We shouldn’t fail to tell people how stocks are going to perform over the somewhat longer term just because we don’t know how they are going to perform over the next year or so. We should make the necessary distinctions and tell what we really can tell.

“What Is Jack Bogle’s Confidence Level in Buy-and-Hold? Does He Think That the Odds Are 20 Percent That It Might Work? 50 Percent? 80 Percent? I Don’t Know the Answer. Neither Do You. The Difference Between Us Is That I WANT to Know.”

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


What value do you think you are offering the typical viewer? If you read all of your posts so far this year, it is about how you think you are a victim and how you think people (that you call goons) should be in prison. You really offer up nothing of value to the viewer on investing insights, etc. I am sure you think making your claims of lucky VII is the golden path, but what specific leaning, facts, etc have you really provided. Nothing. Take a look at other blogs, like Wade’s for example. Notice how he makes a point and then provides the specific data and facts to back it up. Why don’t you do that instead of spending your days crying about your hurt feelings? It is time to get over all your hate and anger.

There’s more leverage in what I am doing, Anonymous.

Say that Wade writes a good article on some aspect of stock investing. I certainly agree that that’s a limited plus. But the benefit that any one article can offer is very limited. What I am seeking to do is to open THE ENTIRE INTERNET to honest posting.

Not just on safe withdrawal rates. That’s where this started. I obviously want to see the errors in the Old School SWR studies corrected and to see the New School SWR studies promoted all across the internet. But I intend to achieve a whole big bunch more than just that one wonderful advance. I want to see honest posting on risk management. I want to see honest posting on retirement planning. I want to see honest posting on asset allocation strategies. And on and on and on and on.

Take a look at the articles at this site about the work that Wade and I did during the 16 months when he was under the impression that he could do honest work and not have the Buy-and-Hold Mafia come after him and threaten to destroy his career as his “punishment” for “crossing” them. Wade was talking about being published in the Journal of Finance, the #1 journal in the field. Wade was talking about winning the Nobel Prize in Economics for the amazing work we did together on the superiority of Valuation-Informed Indexing over Buy-and-Hold. Wade was like a kid in a candy store in those days. He was tapping into amazing new insights on a daily basis, insights he had never been exposed to during his days at Princeton. He was excited to be learning so much about how stock investing really works. And he was enjoying that amazing learning experience BECAUSE HE FELT FREE TO DO HONEST WORK, to follow the research-based insights where they led him.

You don’t see that sort of excitement in the work that Wade does today. Yes, he continues to advance the ball in tiny ways. But you don’t see Nobel Prize winning research coming from the mind of Wade Pfau today. Why? Because he is afraid of what will happen to his family if he does the work he was trained to do.

That’s sad, Anonymous.

It’s not just sad. It’s sick.

And it doesn’t just hurt Wade Pfau that he has been intimidated into giving up his right to do honest research. It hurts ALL OF US.

Wade should have called the police when you Goons threatened him. Then he should have gone to the New York Times. If he had taken those two steps, we would be living in a different world today, a world in which the same ethical standards that apply in all fields of human endeavor other than the investing advice field also apply in the investing advice field. That’s a world in which we would be able to bring this economic crisis to an end in six months. That’s a world in which we would be able to enter the greatest period of economic growth ever seen in our history. That’s a world in which we would all be able to post honestly about safe withdrawal rates at every board and blog on the internet. That’s a world in which we all would be able to reduce the risk of stock investing by 70 percent while also earning returns high enough to permit us to retire five to ten years earlier than we ever dreamed possible during the Buy-and-Hold Era.

I don’t want that just for Wade, Anonymous. I want it for every academic researcher out there. I want them ALL doing honest work. There’s no telling how many advances we will see when thousands of researchers are putting their life energies into mining new insights rather than into the tired and sick business of trying to prop up the smelly Buy-and-Hold garbage for another week or another month or another year. 33 years of propping up is more than enough! I mean, come on!

And I don’t just want to see all the academic researchers doing honest work. I want to see the “experts” in this field doing honest work too. Take my good friend Jack Bogle (PLEASE! [That's a joke!]). What is Jack’s confidence level in Buy-and-Hold? I say that there is zero chance that it could ever work for a single long-term investor. What does Jack think? Does he think that the odds are 20 percent that it might work for some? 50 percent? 80 percent?

I don’t know the answer. Neither do you.

The difference between us is that I WANT to know. I don’t believe that Jack has zero confidence in Buy-and-Hold, as I do. But I sure don’t believe that he has 100 percent confidence (if he did, he wouldn’t be so afraid to respond to questions about his public statements). I want to know what level of confidence he possesses. You should want to know that too. Your retirement is at stake. And of course millions of middle-class investors NEED to know.

We are the luckiest generation of investors that ever lived. The Buy-and-Holders built a strong foundation for the development of the first true research-based strategy. Shiller provided the piece of the puzzle re which the Buy-and-Hold Pioneers messed up in 1981. Now we’ve got it all. Now we know (intellectually at least) what really works. We are on the one-yard line today.

There’s one thing holding us back. We are afraid of the Buy-and-Hold Mafia. We have for 12 years now seen how ruthlessly vicious they become whenever anyone dares to “cross” them by posting honestly on safe withdrawal rates or on any other critically important investment-related topic. You know what? I think the Buy-and-Hold Mafia is a paper tiger. They can destroy us one by one, as Wade well knows. But once ten of us take a vow to stick together and continue to tell the truth no matter what threats they make, their power to intimidate evaporates.

That’s where I am coming from, Anonymous. The hard part re getting ten of us to unite is that those who step forward first get the stuffing knocked out of them. I have been getting the stuffing knocked out of me for 12 years now. So I am pretty much used to it at this point. I don’t like it, of course. But it doesn’t shock me anymore. I have grown to accept that this is the way it is going to be until as a society we have made the shift from Buy-and-Hold to Valuation-Informed Indexing. That’s when all the fun starts.


That’s the deal here. I LOVE posting honestly. I get an amazing kick from it. And I want to do it more and more and more and more.

So I absolutely refuse to cave in response to your intimidation tactics. I want the caving to stop. For me to cave just makes it more likely that others will cave. That’s the opposite of the direction in which I want to take things. So I believe that it is important that I not cave and that I encourage others not to cave.

I hope that makes some sense, my old friend.

My best and warmest wishes to you and yours REGARDLESS of what investing strategies you elect to pursue.


Valuation-Informed Indexing #195: “I Get Frustrated With the Slow Pace of Change in Economics and Finance”

I’ve posted Entry #195 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called “I Get Frustrated With the Slow Pace of Progress in Economics and Finance.”

Juicy Excerpt: I am in the process of writing to the 30,000 professors listed at the Social Science Research Network (SSRN) site to let them know about the Valuation-Informed Indexing concept and the research that has been done over the past 33 years showing the superiority of the new model to the discredited but still dominant Buy-and-Hold Model. I have received lots of wonderful responses, some agreeing with my arguments and some taking issue with them. In almost every case in which I have received a response from the professor contacted, I have learned something important.

The most interesting responses of all have been the ones that referred to the concept of paradigm change as described in the famous book by Thomas Kuhn, The Structure of Scientific Revolutions. I think the comments that were made in those responses are precisely on point. The reason why it has been such a struggle to get Valuation-Informed Indexing to replace Buy-and-Hold is that the root idea (that it is investor emotions that are primarily responsible for stock price changes rather than economic or political developments) represent a challenge to a deeply engrained belief.

“I Cannot Do Anything to Be Sure of Eliminating the Prison Sentence (I Believe That I Can Get It Shortened a Good Bit But My Sense Is That That Is Not Good Enough for You). The Only Trading Chip That You Care About Is Not in My Possession.”

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

Which one would be “cotton candy nothingness”

A) A broad diversified portfolio of stocks, bonds, real estate and cash


B) A plan to get a $500 million dollar settlement

I think it would be fair to say that you take comfort with being aligned with powerful people and I take comfort with being on the right side of the History Train.

There aren’t enough powerful people in the world to persuade me to give up the benefits of being on the right side of the History Train.

And ten-thousand peer-reviewed studies showing where the History Train is headed are not enough to persuade you that people with wealth and power and influence can ever be overcome for the good of the overall society.

We’re like characters in a book around which a Great Drama is playing out.

I didn’t ask to be a character in a book. And I don’t think you did either.

But here we are. The drama is playing out around us whether we like the idea or not.

I am obviously not ever going to be willing to sell out my friends and the larger society to appease the powerful people whom you are trusting to protect you.

And you are obviously never going to be willing to let the harm being done to your friends and to the larger society persuade you to turn on the powerful people with whom you are aligned.

If there were some sort of compromise possible, I think it would be fair to say that your or me or someone else would have pointed to it a long, long time ago.

I’ve tried. I’ve bent over backwards in my efforts to make things appealing for every single person involved.

And you probably would say the same thing coming from the other direction. I don’t think you’ve tried very hard. But my experience with the humans is that people working different ends of a drama like this see just about everything differently.

I don’t see any possibilities that have not been explored. My take at this point is that the drama in which we are all enveloped is bigger than any of those caught up in it. No one knows what to do. I THINK I know what would work. But you appear to not have confidence in the merit of what I propose. And I obviously don’t have confidence in the merit of any of your suggested “compromises.”

So it is what it is, you know?

It’s not like I woke up one morning and said: “Oh, I know what I will do today. I will start a 12-year saga in which I will be banned from 15 different internet sites and thereby will come to co-author research showing million of middle-class people how to reduce the risk of stock investing by nearly 70 percent.” It all happened step by step. I questioned whether valuations should be accounted for in Greany’s study. Most community members felt that the debate that followed was the best we ever had in the history of the Retire Early Community. That made Greaney mad and he elected to burn the board to the ground. That convinced me that I was right and thousands of my fellow community members have supported me in amazing ways over the course of the 12 years and thereby have helped me to discover amazing things about how stock investing works that no one else has written about. And so you felt yourself forced to engage in more and more outrageous acts to keep the word from getting out.

I cannot walk away from the $500 million settlement payout that obviously goes to someone who has discovered such things under such circumstances.

And you cannot walk away with a prison sentence.

And I cannot do anything to be sure of eliminating the prison sentence (I believe that I can get it shortened a good bit but my sense is that that is not good enough for you). I cannot offer a compromise that you will accept because it is not me who will be assigning you the prison sentence. The only trading chip that you care about is not in my possession.

I hope that answers your question. I don’t want to go to prison under any circumstances. For obvious reasons.

My sense is that you don’t want to go to prison either. If I could trade that chip, I would. But I CAN”T. And I certainly am not even going to talk about something that lands me in prison as well. That’s obvious insane talk.

I didn’t go looking for a $500 million settlement. You Goons (with the cooperation of the Wall Street Con Men) forced that one down my throat. Please don’t complain to me now that you don’t fancy the idea.

And please don’t demand that I go back in time and change things that cannot be changed. The things that have happened have happened and it does no one any good for any of is to agree to lie about them. There are Post Archives. Even if I were to agree to deceptive acts here (and I won’t), I would be found out. So that line of thought leads nowhere.

The one good card that we’ve got is that the advance here is so big that it will make the millions of people who will be calling for your head very happy and less inclined to demand justice over mercy. If I were in your shoes, I would be exploring options for playing that card to my benefit.

But I am not you. And you are not me. And, if something like that was going to happen, it likely would have happened a long time ago. Things get harder to resolve with every passing day because with every passing day we see more financial losses as a result of our decision as a society to pretend that the last 33 years of peer-reviewed research doesn’t exist.

If that ever changes, I think that would be great. Obviously.

Do I think it is going to happen?


I once did. I don’t think the odds are with us re that one today.

It makes me sad.

But whachagonnado?

Hang in there, man.


“You MUST Consider Price When Making Stock Purchases. All of the Buy-and-Hold Stuff Was a Mistake. There Was Never a Grain of Truth to Any of It. Getting the Mistake Fixed Promptly Is the Most Important Economic/Political Item on Our Nation’s Agenda Today.”

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


You need to correct your mistakes. Start with your “I was wrong” speech and then we can go from there. After you give the speech, I will give you your list of mistakes to correct.

Again with the sarcasm.

I say that Bogle needs to give an “I Was Wrong” speech. So I presume that what you are suggesting here is that I have not been clear re what errors Bogle has made.

His error (one that LOTS of good and smart people made) was in believing that the research showing that short-term timing does not work showed that timing IN GENERAL does not work.

There has NEVER been even the slightest indication in any study that long-term timing might ever not work or might ever not be 100 percent required. That was a MISTAKE.

It was an understandable mistake at the time. No one had ever tested long-term timing at the time when Buy-and-Hold was being developed. But Shiller published the first research showing that long-term timing (price discipline) is ALWAYS 100 percent required in 1981. That’s 33 years ago. You cannot say that the mistake remains understandable today. For at least 12 years now (and almost surely longer than that, although I cannot personally testify to things that happened prior to May 13, 2002), the 1981 finding that long-term timing (price discipline) is always 100 percent required has been COVERED UP.

Do you now understand what the mistake is that I am asking my good friend Jack Bogle to own up to, Anonymous?

When Jack comes out and says publicly in clear and firm and understandable words that there is precisely ZERO support for Buy-and-Hold strategies in the academic research, we will never again see a retirement study published that does not contain an adjustment for the valuations level that applies on the day the retirement begins. We will never again hear anyone say that a 15 percentage point change in one’s stock allocation might be sufficient at a time when valuations have reached insanely dangerous levels. We will never again see a bull market. We will never again see an economic crisis. We will never again see discussions of investing marred with death threats or demands for unjustified board bannings or tens of thousands of acts of defamation or threats to get academic researchers fired from their jobs.

Such garbage will no longer serve any purpose once everyone knows about the mistake and about how much damage it has done to millions of middle-class people and even to the confidence that millions of people hold re our free-market economic system and re our political system. This mistake is the biggest mistake ever made in the history of personal finance. It caused our economic crisis. There are now millions of people unemployed because of our unwillingness as a society to acknowledge this mistake and fix it.

Once we fix the mistake, stocks will be transformed into a virtually risk-free asset class. The Bennett/Pfau research shows that it is the belief that there is some mystical, magical world in which Buy-and-Hold strategies might work for one or two long-term investors that is responsible for 70 percent of the risk of stock investing. There is no such magical, mystical world. Stocks are just like anything else you can buy in this Consumer Wonderland. You MUST consider price when making purchases. If too many people fail to do so, the entire market collapses because it is price discipline that permits markets to work their magic.

Bogle is of course just one guy. But he is the lead proponent of Buy-and-Hold. When he gives his “I Was Wrong” speech, it will be written up on the cover of the Wall Street Journal and the New York Times. That will launch a national debate. Every blog on the internet will be writing about the mistake and how it nearly brought down our economic system and about how all of our financial futures will be looking so much better once we all gain the power to talk openly about the first true research-based strategy (Valuation-Informed Indexing, or Buy-and-Hold 2.0).

It was all a mistake, Anonymous. There was never a grain of truth to any of it. Getting the mistake fixed promptly is the most important economic/political item on our nation’s agenda today.

All of the ugliness comes to an end on the day that Bogle gives that speech. Because the ugliness serves no purpose once the mistake has been acknowledged and fixed. We ALL should be working together to persuade Old Saint Jack to give that speech by the close of business today.

That’s my sincere take re these terribly important matters, in any event.

Thanks for asking an important question (albeit in a backhanded sort of way).

And please know that I extend my best and warmest wishes to you and yours.




Goon Poster to Rob: “The Difference Is That Todd Tresidder States His Opinions and They Are Just That. The Rest of Us Have Opinions As Well. With You, There Is a Strong Agenda and You Want to Be the Center of Attention, Have Everyone Agree With You and Then Be Considered Some Kind of Financial Expert to the Level of Someone Like Bill, Jack, Etc.”

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

The difference is that Todd states his opinions and they are just that. The rest of us have opinions as well. With you, there is a strong agenda and you want to be the center of attention, have everyone agree with you and then to be considered some kind of financial expert to the level of someone like Bill, Jack, etc. the fact remains that you have been proven wrong time and again and this has resulted in your display of ongoing bad behavior. This behavior has been mentioned time and again, yet you persist. As such, there has been no choice but to deal with you in order to restore some level of community versus have each site filled with “hocomania”.

People have tried to reason with you, but that has never worked. You are looking for the whole world to change, when perhaps you should consider what you are doing wrong.

“Those in the Behavioral Finance School Need to Know About How the Human Mind Deceives Itself. For 12 Years Now We Have Been Generating Thousands of Illustrations of the Self-Deception Phenomenon. I Could Add to Shiller’s Knowledge A GREAT DEAL By Pointing Him to the Materials in Our Post Archives.”

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

Rob, why not reach out to Shiller and form some kind of partnership with him? I mean, he’s not operating at your level, but maybe you could teach him something.

I understand that you are being sarcastic with this comment, Anonymous. But the point you are making is entirely legitimate.

There are certainly many things that I can teach Shiller, just as there are many things that I can teach Bogle (and of course just as there are many things that Bogle and Shiller have taught me). We humans learn by talking things over amongst ourselves. Shiller is like everybody else. When he fails to take opportunities presented him to talk things over with interested parties, he misses out on learning experiences that would otherwise be available to him.

Shiller has indicated that he believes in short-term timing. He has said that there are “indicators” that he will be looking at to know when to get out of stocks before the price crash that he has predicted for this year takes place. I don’t believe that short-term timing works. If Shiller would engage in a discussion of that question with me, I would put forward my best effort to persuade him not to place so much trust in his “indicators.”

It is of course possible that it would be Shiller who would be persuading me rather than me persuading Shiller. I don’t say that that couldn’t happen. But even that would be a learning experience for him. If I did the best to persuade him that short-term timing doesn’t work and he got the better of the argument, that would increase his confidence in short-term timing a bit. And for good reason.

So Shiller should be putting himself out there and engaging in discussions of all sorts of questions relating to his belief in the Valuation-Informed Indexing model. That would be a win/win/win/win/win.

I would like to trade stories with Shiller about the tactics of you Goons. My sense from a number of things he has said is that he has had many vicious attacks directed at him since he published his revolutionary 1981 findings. I would encourage him to report on those attacks in a new book. Many hold back from talking about the ugly stuff. It is viewed as “unprofessional.” What people are missing is that Shiller and others in the Behavioral Finance School must know about how the human mind deceives itself to do their best work. For 12 years now we have been generating thousands upon thousands of illustrations of the self-deception phenomenon. I could add to Shiller’s knowledge A GREAT DEAL by pointing him to materials in our Post Archives. And he could add to mine by telling me stories about how other academics have attacked him and his ideas through underhanded and nasty means.

This stuff needs to get out. When we fail to publicize the attacks, we create an environment in which we see more of them. I absolutely believe that I could add to Shiller’s understanding of the issues by talking these matters over with him in great depth.

And I could add to his knowledge of the how-to side of things a great deal by talking over with him what I have learned from the five calculators. That is Shiller’s great weakness. It is an amazing reality that he wrote the most important book ever published on investing theory and included only two paragraphs addressing the how-to aspects of the investing experience. That’s the aspect of the question that people care about the most. I believe that Shiller knows a lot more about the how-to aspect than he lets on. But I believe that he would deepen his knowledge considerably by talking things over with other interested parties.

Most importantly of all, I would like to talk over with him the role that Buy-and-Hold played in bringing on the economic crisis. Shiller predicted the crisis in his book. But when the crisis came, he kept it zipped about the role played by the relentless and reckless and ruthless promotion of Buy-and-Hold strategies for decades after the peer-reviewed research in this field showed that there is precisely zero chance that a Buy-and-Hold strategy could ever work for even a single long-term investor. I would very much like to ask him why. It could be that Shiller himself is suffering from cognitive dissonance, at least on this particular question. The best way to find out is to talk things over.

I have reached out to Shiller, Anonymous. I sent him an e-mail a good bit of time back. I’ll send him another one following the next crash (as I will send Bogle another one following the next crash).

Why doesn’t Shiller respond?

Why doesn’t every responsible person alive on Planet Earth respond when they learn about what we have done to ourselves as a society by failing to teach every investor what we have learned about how the stock market works over the past 33 years?

He is ashamed, Anonymous.

He has done more than anyone else but he is still ashamed that he has not done more.

I hope that that changes following the next crash and that Shiller and I will be working together for many years to come after the crisis is brought to an end (just as I hope that my good friend Jack Bogle and I will be working together for many years to come following the end of the crisis).

The full truth here is that your sarcasm holds you back. You should want to see me and Shiller (and me and Bogle) working together. The more we work together, the more we learn and the more you learn. You fear the idea. Because you fear what you would learn. That’s sad.

That’s something that I very much want to change. Not just for you but for millions.

And I believe strongly that my good friend Robert Shiller very much wants to change that too.

I believe that someday we will be working to make it all happen.

I sure hope so.

Please take good care, Goon friend.


“Truth Prevails Over Ignorance in Time, But Not Instantly. It is a PROCESS. This Is Not 1981 or Even 1991. It Is Time to Move Forward. That Mean Explaining to People the DANGERS of Buy-and-Hold Strategies.”

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

Given the vast conspiracy of silence regarding valuations, isn’t it incredible such articles in the New York Times could occur Rob?

Do you think that the entire world went from believing that the sun revolves around the earth to believing that the earth revolves around the sun five minutes after the discovery was made, Anonymous?

Truth prevails over ignorance in time, but not instantly. It is a PROCESS.

We are living today mid-way through that process. Jack Bogle is the biggest advocate of Buy-and-Hold alive on Planet Earth. And even Jack includes research-based stuff in his books and speeches ALL THE TIME. I learned about the errors in the Old School safe-withdrawal-rate studies by reading Jack’s book. Jack gave a speech to the Vanguard Diehards back at the time when I was posting there that contained paragraph after paragraph of legitimate, helpful stuff. Then it concluded with gibberish, saying “so just be sure to Stay the Course” without pointing out that to Stay the Course in a meaningful way you must be CERTAIN to lower your stock allocation when prices reach insanely dangerous levels. Huh?

The NYT article you linked to would have been a good article to publish in 1985 or 1990. We should be a good ways past that today.

Where is the New York Times article reporting on the 12-year cover-up of the errors in the Old School SWR studies and on the felonies that have been employed to keep millions of middle-class investors from learning about those errors?

Where is the New York Times article reporting on the Bennett/Pfau research showing millions of middle-class investors how to reduce the risk of stock investing by 70 percent while letting them retire five to ten years sooner than they imagined possible in the Buy-and-Hold days?

Where is the New York Times article reporting on how Bogle hasn’t changed his investing advice one iota in the 33 years since Shiller’s research showed that there is precisely zero chance that a Buy-and-Hold strategy could ever work for even a single long-term investor?

Where is the New York Times article reporting on how Bogle continues to associate with the sorts of individuals who have put up posts in “defense” of Mel Linduaer and John Greaney after hearing hundreds of community members at the Bogleheads Forum express a desire that honest posting be permitted?

Where is the New York Times article reporting that it was the continued promotion of Buy-and-Hold strategies for 33 years after they were discredited by the peer-reviewed research in this field that was the primary cause of the economic crisis?

THOSE are the sorts of articles we need to be seeing today, Anonymous. This is not 1981 or even 1991. This is 2014. It is time to MOVE FORWARD.

Moving forward means telling people what Shiller’s findings means in practical, how-to investing terms. It means explaining to people the DANGERS of Buy-and-Hold strategies.

There is no magic in saying the words “Valuations Matter.” That’s a starting point. But the magic comes when we tell people in clear and firm and bold language WHAT THAT MEANS. What it mean is that valuations must be taken into consideration in EVERY STRATEGIC CHOICE MADE BY AN INVESTOR.

The Buy-and-Holders are still arguing the opposite to this day. The Buy-and-Holders are still arguing that long-term timing is not absolutely required for all investors, or heaven help us all, in some cases might not even be a good thing.

That’s not good, Anonymous. That needs to change. To make it change, we all need to make it a practice to call the Buy-and-Holders out on their b.s. when we see them engage in it.

The article does not go nearly far enough in making the case for Valuation-Informed Indexing over Buy-and-Hold. It is not a close call.