The Financial Uproar blog has posted an article about my efforts to get the errors in the Old School safe withdrawal rate studies corrected entitled Rob Bennett: Crazy? Or Crazy Like a Fox?
Juicy Excerpt #1: I’ve always liked what Rob had to say. He has well thought out opinions about everything he writes. He’s clearly a very intelligent guy. So I decided to click through to his blog (A Rich Life) to see what he writes about. Turns out Rob is just a little crazy.
Juicy Excerpt #2: Anyone who pisses off the establishment piques my interest. Nothing ever worth accomplishing was ever achieved without bucking conventional thinking. I started reading more into Rob’s archives. Rob is doing his best impression of Galileo or Bill Gates, except his cause is the withdrawal rate on retirement calculators.
Juicy Excerpt #3: I do have to give Rob credit for writing stuff that no one else is writing about…. Maybe the problem is that Rob is so intelligent that what he says goes right over my head. Or, maybe he’s batshit insane. I honestly don’t know. What I do know is that the world of personal finance blogging needs more Rob Bennetts. He’s passionate. He’s intelligent. He’s writing things that go against the grain. I’d much rather read one of Rob’s posts than another piece on emergency funds or frugal ways to spend the summer. Keep on keeping on my crazy friend.
Evidence Based Investing says
This guy likes you. And yet even he says
What is the proper retirement withdrawal rate? Damned if I can figure it out after spending some time on Rob’s site. It has to do with the valuation of the market as a whole. If the market is at a frothy valuation, then the retiree can withdraw more. If it’s at a trough, they can withdraw less- at least I think. I like to think of myself as a reasonably astute guy when it comes to these sorts of things and I can barely make any headway on it.
You claim to be a words guy and yet you are unable to communicate your message to someone who likes you in a way that they can get the basic premise of your message.
You end up having to explain to him that he interpreted the basic premise of VII 100% incorrectly.
Rob says
Your statement of the facts is 100 percent accurate, Evidence. And I certainly share your view that the facts being described are most remarkable. Where we differ is in our explanation of the facts.
You are putting the blame on me. Your suggestion is that I have somehow failed to communicate well. I don’t think that is even a tiny bit so. The problem here is with the hearers of the message.
It’s not that the hearers of the message are not smart. They are virtually without exception plenty smart. In some cases it is that they do not want to hear the message. But as you note here I have experienced communication problems even with people who are friendly and warm to me. So hostility to the message is not an entirely satisfactory explanation of what is going on.
What is going on?
I think we are dealing with something fundamental here. In the past 50 years, as the result of the work of Fama and Malkiel and Bogle and Shiller and Arnott and Russell and lots of others, we have advanced in our understanding of how stock investing works in dramatic ways. We have not yet taken in all that we have learned. Many of the pieces have not yet clicked for many of us.
I have been placed in a strange set of circumstances that forced me to put more of the pieces together than perhaps anyone else has ever put together before. I didn’t set out to do this. It just happened to happen to me. The pieces now fit for me. My job is to communicate to others how it all works.
It should be so easy! Everybody wants to know how to invest effectively! This is a win/win/win/win/win.
If we were working from a clean slate, it would be easy. We would go over the issues one by one, everyone would get it, everyone would be happy.
The trouble is that we are not working from a clean slate. People have ideas about how stock investing works in their heads before they hear Word One from me. I say Word One and something in their minds clicks on and says “that doesn’t sound right! That’s not what I’ve always heard!” And what I am saying is indeed not what people have always heard. In many cases it is the opposite of what people have always heard.
People who feel threatened by the new ideas are going to need to calm down enough to be able to take them in and make sense of them. People are seeing the new ideas as a threat. They are a threat in one sense. A lot of books are going to need to be rewritten, a lot of calculators are going to need to be redone, all that sort of thing. But the benefits of going down this new road are so great and the dangers of failing to do so are so great that we are simply going to have to figure out a way to make this happen.
I believe that in time we will. I worry about the harm we do to ourselves by putting off the inevitable. But I do not get to decide by myself where this goes or when. All that I can do is to offer to help in any way that I can. I’ve done that before. And I make the offer again today. I am happy to do what I can.
People who are confused need to ask specific questions. They need to make an effort not to inject attitude into their asking of the questions — the attitude stuff tends to send things off in all sorts of unfortunate directions. And they need to listen to the answers in a spirit of wanting to learn, not to knock down the new ideas no matter what.
If the ideas have weaknesses, we certainly need to find that out. People need to be skeptical and critical. But people should aim not to be willfully skeptical or mindlessly critical. The goal should be to learn all there is to learn in the event that there really is something here to learn.
There’s nothing complicated here. it’s all as simple as simple could be. The confusion stems entirely from the fact that this is different from what you have heard before. It is easier for someone who has never heard anything about investing to take this in because such a person doesn’t have preconceptions holding him back. I’ve had many people tell me that they got it the first time they heard it. These were usually people who did not consider themselves investing experts before they heard the new ideas.
Humanity did not come to know everything there is to know about stock investing in the 1970s, Evidence. Valuation-Informed Indexing is an advance. It is not an addition to Buy-and-Hold; it replaces Buy-and-Hold. If hearing those words upsets you, you have identified the source of the problem. The act of humanity learning what it needs to learn to go past Buy-and-Hold is a plus for every single person alive on Planet Earth today. It’s all good, nothing bad.
I’d be grateful if you could try to start seeing it that way. I have things to learn too. We could learn together. If you’re up for being the one to shoot with the first question that will be asked in a new spirit of warmth and friendship, I’m happy to help out in any way that I can. There are not two sides here. We are all investors. We are all on the same side.
I am not trying to destroy John Bogle’s ideas. I am trying to take John Bogle’s ideas to a new place, a place where he would want to take them too if he could see the new place. All that we need to do is to help him see that new place, and all is well. But he cannot see the new place if he is not willing to open his eyes and look at it! I can describe the new place to him but it is his part to open his ears and listen.
I have been doing a fine job speaking the message, Evidence. You have been doing a poor job listening to it. I mean no personal offense in saying that. But it does no good for me to pretend that the problem is with the speaking of the message when I don’t believe that to be the case. I think you and many others need to make an effort to begin listening in a new kind of spirit. I am knocking myself out in an effort to help you.
For starters, do you get that? Do you see that the goal here is to teach you what you need to know to be able to obtain higher returns at less risk, to be able to retire years sooner than would be possible for you given what you know about investing today? I think that, if you and all others got that and let it show that you got it, that that would help all of us an awful lot. I hope that you are up for the idea of moving forward in that spirit.
Rob
Evidence Based Investing says
Another of his comments is
Maybe the problem is that Rob is so intelligent that what he says goes right over my head. Or, maybe he’s batshit insane. I honestly don’t know.
He thinks you are crazy, but he is humble enough to admit to another possibility, that you so intelligent that what you say is over his head.
In your case
I have been doing a fine job speaking the message, Evidence. You have been doing a poor job listening to it. I mean no personal offense in saying that. But it does no good for me to pretend that the problem is with the speaking of the message when I don’t believe that to be the case.
You believe that you have been doing a fine job communicating and that the fault always lies elsewhere. You are not humble enough to consider a different possibility, namely that your way of communicating has some faults. This is not the first time that your style of communicating has been criticized but your reaction remains the same “It’s not me, it’s the other guy’s fault”.
Rob says
This is not the first time that your style of communicating has been criticized but your reaction remains the same “It’s not me, it’s the other guy’s fault”.
Yes, that’s so.
The fellow did say that he thought there was a possibility that I was “batshit insane.” You’re quoted him accurately, Evidence.
I wouldn’t want people to dismiss the possibility out of hand. It’s a live possibility that needs to be included in the mix.
And if I were indeed batshit insane I would not see it. Isn’t that the way it works?
Rob
Evidence Based Investing says
Another possibility that needs to be included in the mix is that you have NOT been doing a fine job speaking the message.
However I believe you have shown a little reluctance in considering that possibility.
Rob says
I believe you have shown a little reluctance in considering that possibility.
I think it would be fair to say that I reject that possibility out of hand, Evidence.
Rob
Evidence Based Investing says
I think it would be fair to say that I reject that possibility out of hand, Evidence.
Which is why, eight years into this thing, your ideas have gained so little traction and you feel like I am knocking myself out in an effort to help you.
Rob says
I don’t have a magic wand that can take us back eight years in time, Evidence.
The hand of kindness is extended to you. And, yes, I intend to bring lawsuits against those who engaged in defamation and smear campaigns and threats of physical violence and board bannings and all that sort of thing. Both things are so.
I can do no more and I can do no less.
I wish you the best of luck in all your future endeavors in any event, my old friend.
Rob
Evidence Based Investing says
I don’t have a magic wand that can take us back eight years in time, Evidence.
But you do have the option of making sure that the next eight years are not simply a repeat of the last eight years. I hope you seize that opportunity.
Rob says
Got it, Evidence.
I am grateful to you for taking time out of your day to share your thoughts with us all.
Rob
sadface says
I am going with batshit insane, yet hilariously entertaining.
Rob says
Um — Thanks, Sadface.
I think!
Rob
Reasonable Person says
Make that two votes for batshit insane
Rob says
Oh, great! Now all the Goons are going to jump in!
Has anyone told John?
Rob