Set forth below is the text of a comment that I put to the discussion thread for a blog entry here titled It Breaks My Heart When People Don’t Comment on My Investing Posts:
you are the one who isn’t educated. It’s like you read a book about the Ocean and think you are the messiah because you learned that water is wet.
We’re not all that far apart re this one, What.
I never went to Investing School and I never managed a big fund. We agree on that much.
All that I have ever said about stock investing follows from the painfully obvious observation that valuations matter. We agree on that much.
I never could have done what I’ve done without help from hundreds of good and smart and hard-working people with names like John Walter Russell and John Bogle and Robert Shiller and Wade Pfau and Michael Kitces and Bill Bernstein and Scott Burns and Rob Arnott and Peter Bernstein and Andrew Smithers and Sam Parler and Jeremy Grantham and John C Craig and Microlepsis and BenSolar and Wanderer and Cliff Asness and Ed Easterling and on and on. We agree on that much.
There is indeed a sense in which I am saying that water is wet. I don’t have a problem with you putting it that way.
Where we go on different tracks is when you suggest that having someone say “water is wet” out loud and in clear and firm and uncompromising terms isn’t a super big deal in InvestoWorld in the Year 2012.
We have achieved a consensus that the Old School SWR studies get the numbers wildly wrong. That’s good. That makes me happy. That is the “water is wet” statement that I was making in 2002, when people were throwing rocks at me for even suggesting the possibility that water is wet.
It’s not enough in the Year 2012. The “water is wet” statement in 2012 is that, since we all know that the Old School SWR studies get the numbers that people use to plan their retirements wildly wrong, we need to correct those goshdarned Old School SWR studies before they cause more human misery.
I’m still saying things that no one else is saying, What. I’m still ahead of the curve. I like to think that I am no longer 10 years ahead of the curve, perhaps we’ve got it down to five years or three years or one year at this point. But so long as I am saying things that very much need to be said that none of the others are saying, I am ahead of the curve, no?
Do you hear Bogle demanding that the Old School SWR studies all be corrected by the close of business today? Do you hear Shiller saying that? Do you hear Bengen saying that? Heaven help us all, do you hear Lindauer or Greaney saying that?
Why not?
Why are these other people not saying that water is wet?
I’m not at the top because I am so smart, What. I am at the top because all the hot shots are so dumb.
The better way to put it is that I am at the top because all the hot shots are to various degrees suffering from cognitive dissonance.
Do you know what the cure is? It is to open the internet to honest posting on all kinds of important investment-related topics. Do you know what the magic is in that? It is that, once these people are able to openly give voice to their doubts about Buy-and-Hold, they are going to hear thousands of their friends and neighbors and co-workers and fellow community members giving voice to their doubts too. And that is going to convince them that we need to all get to work building a new model, one that works, one that doesn’t cause such human misery.
I am not smarter in an I.Q. sense than any of these other people, What. But I sure as shootin’ am saying smarter things. That’s because I gave up on Buy-and-Hold a long, long time ago. I gave up on Buy-and-Hold on the night of August 27, 2002. That’s the night that Greaney threatened to kill my wife and children if I continued posting honestly on SWRs and hundreds of Buy-and-Holders who were in the room at the time and heard what he said sat on their hands and did nothing.
That ain’t normal behavior among the humans, What. So we know that there is something at the root of this Buy-and-Hold business that is very, very, very very sick and twisted.
I’ve picked up a clue as to what it might be. I think it might be the Get Rich Quick element, the part that is supported by precisely zero research and zero data but that serves as marketing wildfire when the time comes to make a buck from this stuff. It’s that Get Rich Quick garbage that tells us that there is no need to lower our stock allocations when stock prices go to insanely dangerous levels that is killing us, What. It’s that Get Rich Quick element of the Buy-and-Hold package that is making Bogle and Bernstein and Burns and, heaven help us all, Lindauer and Greaney and all the other Goonssound so goshdarned moronic when they talk about stock investing.
The Buy-and-Holders achieved a breakthrough when they came up with the idea of rooting their strategies in research and data. That was pow, pow, powerful stuff.
They gave it all back and then some when they let the Marketing Department Con Men persuade them to stretch the truth just a wee bit and change the finding from “Short-Term Timing Doesn’t Work” (supported by the research) to “No Form of Timing Is Required” (pure Get Rich Quick marketing garbage).
If it hurts their precious wittle feelings when I point out that the things they say about investing sound as dumb as sin, that ain’t on me, What. That’s on them. I am the one telling them to give up the Get Rich Quick garbage. I am the one saying to go back to the cool idea of letting the academic research be our guide. I am the one saying to correct the Old School studies. I am the one saying to open every investing board and blog on the internet to honest posting on hundreds of important investment-related topics. I am the one saying to launch a national debate on what really works in stock investing. I am the one saying that we all should be working together to bring the economic crisis to an end as soon as humanly possible.
Are most of those people going to rush past me once they work up the courage to acknowledge in clear and firm and bold and uncompromising words that The Buy-and-Hold Emperor Is Wearing No Clothes? Probably.
You know what? I’m cool with that. It doesn’t bother me.
I want to see the economic crisis brought to an end. I want to do something to help the thousands of my fellow community members who are in the process of suffering failed retirements because of the Campaign of Terror that has been waged against our board communities for ten years now. I’m not worried about who gets the credit for all the amazing insights we have developed together over the past 10 years. There are so many great insights that my view is that there is credit enough to go around. It’s not a problem.
The only problem is that, so long as you continue defending this fantasy that there is some alternate universe where a pure Get Rich Quick approach can work, you don’t get credit for anything because you say stuff that makes you sound like a freakin’ moron. And, so long as you aren’t getting credit for any insights, you hate all the fine community members doing constructive, positive, life-affiirming, honest work.
We are not seeking to keep all the goodies to ourselves, What. You are on the outside looking in only because you are too darn proud to walk through the door, plop your butt down in a chair and get to work mining the good stuff.
I cannot plop your butt for you, What. That’s an inside job.
You dig, man?
Courage! Onward!
Rob
I didn’t read much of this but you are certaintly NOT a big deal in 2012.
Your site is basically deserted except for people who view you as a curiousity (like a carnival freak show) and no one who doesn’t view you as a joke can stand you.
you are certaintly NOT a big deal in 2012
Bans remain in place at 15 investing boards and blogs, What. There obviously wouldn’t be a single ban if what I were saying were not pretty darn important.
I mean, come on.
Rob
Your site is basically deserted
That’s not my doing, What.
Did I spend hundreds of millions of dollars promoting Buy-and-Hold?
Mine is the lead voice speaking out in opposition to it.
There are Post Archives.
Rob
no one who doesn’t view you as a joke can stand you.
THere is a measure of truth in this one. There are indeed a good number of people who become emotionally distraught when I report what the last 30 years of academic research says re what works in stock investing.
But, again — Is that my fault?
If it were up to me, there would never have been any Buy-and-Hold and people would not be feeling any of this emotional pain.
I don’t fault the people who promoted Buy-and-Hold back before Shiller published his research. They were pioneers and they developed important insights and I think of them as friends. But I won’t take the hit for filling people’s minds up with this fantasy Get Rich Quick garbage. I started posting about investing in May 2002. I wasn’t even around when the marketing efforts for Buy-and-Hold were getting off the ground.
I am innocent! Innocent, I tell you!
Rob
People not standing you is most certainly and completely your fault.
I think bans remain because… that’s what bans do. Its not like they re-evaluate them every 15 minutes or something. You are banned and basically no one who remains gives it a second thought.
Also, saying something important is not logically related to being banned. The more likely scenario is that you are an extremely irritating Internet troll – since most Internet trolls get banned this is more likely than ‘because I have something important to say’.
People not standing you is most certainly and completely your fault.
Wall Street spends hundreds of millions of dollars pushing an emotion-based investing strategy and I report accurate retirement planning numbers and it’s my fault that people get emotional to hear the accurate numbers?
Huh?
Not in my book, What. That one is not even a close call in my book.
Rob
I think bans remain because… that’s what bans do.
I’m willing to help out at any board that permits honest posting on safe withdrawal rates, What.
But I cannot put my name to a corrupt enterprise. I post honestly or I post not.
I don’t know what else I can say re this aspect of things. There is no give re this one. There never has been even an inch of give. Going back to the morning of May 13, 2002, I can honestly say that I have never given two seconds consideration to the demand that I agree to post dishonestly re the numbers that my friends use to plan their retirements.
What a terrible, terrible person I am! What a meanie!
Rob
You are banned and basically no one who remains gives it a second thought.
That’s not so, What.
I had a blog entry here not too long ago in which the owner of the Bogleheads Forum doubled down on his defamation of me. A researcher had posted to the board that I was right about safe withdrawal rates and several community members noted that it was wrong that I was banned just because I was unwilling to give in to the pressure imposed by the Lindaurheads to post dishonestly. The owner of the site threatened to remove these posters and then put up a string of defamatory comments re me.
How could be do that if he never gave the matter a second thought?
He thinks about it all the time. I think it would be fair to say that all those who have opened themselves to lawsuits think about it all the time. Otherwise, the behavior we have seen is inexplicable. I mean, come on.
Rob
saying something important is not logically related to being banned.
Of course it is.
The academic research has been showing for 30 years now that there is precisely zero chance that a Buy-and-Hold strategy could ever work for any long-term investor. Wall Street continued spending hundreds of millions of dollars promoting this Get RIch Quick garbage during those 30 years. If you had done that, wouldn’t you want to cover it up?
Hundreds of other community members said that I was the first person who ever explaining how stock investing works in a way that made sense. And I just happened to be banned for no reason? Um — that makes a lot of sense, What. I’m glad you cleared that one up for us.
Rob
saying something important is not logically related to being banned.
You need to read the first chapter of Bill Bernstein’s book on the history of science, What. He talks about the many cases in which people who made huge scientific breakthroughs were punished in various ways for doing so.
Saying something important has EVERYTHING to do with being banned. No one bans somebody without a reason. When someone who has never once posted even a tiny bit abusively (I am the leading voice on the internet speaking out in OPPOSITION to abusive posting) is banned, it’s hard for me to imagine any possible reason EXCEPT a cover-up. And why would anyone want to cover up something that isn’t important?
What you are saying here makes no sense.
Rob
The more likely scenario is that you are an extremely irritating Internet troll
A good number of Buy-and-Holders find me irritating as all get-out, What. I am the person who discovered the errors in the Old School SWR studies. If you had staked your retirement on a pure Get RIch Quick investing strategy, wouldn’t you be as irritated as all get-out by the person who demonstrated with numbers that the strategy cannot work?
How does that justify a banning?
There are many community members who want to know the realities. Do they not have a right to hear them?
And even the Buy-and-Holders are better off being exposed to the realities, whether they like the idea or not. If they want to continue to live in their fantasy worlds, they are of course free to do so. But sooner or later they are going to need to change their investing strategies as their losses grow larger and larger. Isn’t it a good thing to at least provide them with the materials and background they need to make the change? It sure seems so to me.
And shouldn’t everyone in our society want to end the economic crisis caused by the promotion of this Get Rich Quick garbage? How do we get the word out if we ban honest posting?
We are coming at this one from very different perspectives. I see honest posting on retirement planning and many other critically important investment-related topics as a GOOD thing. I am not just saying that we should tolerate honest posting. I am saying that we should embrace it and encourage it and expand on it and hold it close to our hearts.
I don’t favor banning the Get Rich Quick mumbo jumbo. But I can’t say that it would ruin my day if I found out that we will be seeing a lot less of that smelly garbage at all our boards and blogs in days to come.
In any event, I post honestly or I post not. Non-negotiable.
Please tell your friends.
Rob
I didn’t read anything you wrote but there are mass murderers who have more personal appeal than you. This is the simplest and most obvious driver of your complete failure.
Not millions of dollars spent on advertising.
there are mass murderers who have more personal appeal than you.
I don’t think that’s so today, What. But if you could have seen some of the stuff I used to watch turn up in my e-mail box a few years back, you might actually believe the words you are putting forward here.
My question —
What does that tell us about Buy-and-Hold?
Rob
This is the simplest and most obvious driver of your complete failure. Not millions of dollars spent on advertising.
We’re saying the same thing, my long-time abusive posting friend.
The market goes through cycles. There are years when fantasy-based Get Rich Quick strategies are all the rage. Then people are ruined. Then we have years when research-supported rational strategies become popular for a time.
Never before in history has there been a time when so many millions of marketing dollars were directed to the promotion of the purest and most dangerous Get Rich Quick stuff ever concocted by the mind of mortal man. So, yes, the good, rational, research-supported stuff is hated with a burning passion today.
But that’s changing, man.
Who do you think people are going to hate after the next crash? The guy who discovered the errors in the Old School retirement studies? Come on.
You don’t want to be on the wrong side of the History Train. Perhaps it can be said that I jumped a little too soon. Do you really think you are going to end up in a better place by jumping far too late?
Think it over, What. The hand of kindness is outstretched for whenever you work up the courage to reach out a bit.
Please take care.
Rob
“What does that tell us about Buy-and-Hold?”
Nothing? I mean, you being a completely unlikable person doesn’t tell us anything about buy-and-hold.
“How does that justify a banning?”
As far as I have seen your bans are completely justified. You hijack a large number of threads and either make it about yourself or your agenda. Essentially you subvert and railroad such a huge number of threads that the discussion board does not function properly because huge numbers of posters become frustrated with your behavior and fixate on it. This is def. grounds for banning.
Of course, you are more than free to setup your own message board.
Unfortunately, you are, again, a completely unlikable person and an totally wacko forum moderator so no one would show up.
you being a completely unlikable person doesn’t tell us anything about buy-and-hold.
Good point, What.
Rob
As far as I have seen your bans are completely justified.
That makes a lot of sense, What.
I am the person who discovered the errors in the Old School safe withdrawal rate studies. It is because of our discovery of the errors in the Old School studies and the reaction we saw on the part of Buy-and-Holders and many of the “experts” who have advocated Buy-and-Hold strategies that we learned that Buy-and-Hold is a Get Rich Quick scheme so dangerous that it was the primary cause of the economic crisis.
The ban was completed justified! You nailed it!
And I’m a terrible, terrible person! A true meanie!
Rob
You hijack a large number of threads and either make it about yourself or your agenda.
It would certainly be fair to say that I have consistently posted honestly on safe withdrawal rates for the past 10 years.
I also do what I can to point out the dangers of Buy-and-Hold and to help middle-class investors learn what the academic research of the past 30 years really says about stock investing.
That’s an agenda and I do my best to advance it every chance I get.
I intend to continue doing so. I also intend to continue calling out Buy-and-Holders who employ abusive tactics to block the millions of middle-class investors who need to know about the tricks that have been pulled on them for years by the Wall Street Con Men.
I think it would be fair to say that, when people learn the realities of how those who advocate Buy-and-Hold strategies have been raping middle-class investors for years now, it does indeed tend to “highjack” whatever thread it is on which these issues have been discussed. Is that my fault? Why hasn’t John Bogle been telling us about this stuff? Why hasn’t Bill Bernstein been telling us about this stuff? Why hasn’t Scott Burns been telling us about this stuff? Why hasn’t Larry Swedroe been telling us about this stuff?
I reported on the errors in the Old School studies on the morning of May 13, 2002. I think it would be fair to say that, if Bogle had picked up the ball on the morning of May 14, 2002, or soon thereafter, we wouldn’t be in an economic crisis today and Buy-and-Hold would have been buried 30 feet in the ground years ago and nothing I ever said on any discussion-board thread would have ever caused any “highjacking” or “disruption.”
Where have these “experts” been these past 10 years, What?
Do you think they have been too busy raking in the bucks to be bothered letting the millions of middle-class investors who were taken in by these “studies” know about what the academic research of the past 30 years says about them?
What do you think of the “agenda” of the “experts” who to this day continue to push the Buy-and-Hold garbage so relentlessly?
Rob
huge numbers of posters become frustrated with your behavior and fixate on it.
What percentage of the posters who got upset when I reported on what the academic research says do you think would have gotten upset if the “experts” had reported honestly on the last 30 years of research at a time when those people could have taken advantage of the information without losing a high percentage of their life savings, What?
You’re right that people are “frustrated.” They are frustrated because they are in the process of going broke. I have been reporting honestly on what the research says for 10 years now. How many people in this field can say that?
Do you think the Wall Street Con Men are going to give you your money back after the next crash? I have a funny feeling that their friendly smiles might not count for much at that point.
If I agree to post dishonestly, as you Goons have been insisting for 10 years now, and I am sued for milllions, are you going to pick up the tab?
If not, how dare you demand that I post dishonestly on the numbers my friends use to plan their retirements?
Find someone else, What.
I can’t go for that. No can do. It’s not my particular cup of tea.
Not this boy.
Rob
This is def. grounds for banning.
If the boards and blogs that have banned honest posting truly believe that is a legitimate grounds for banning, why don’t they let their readers know that honest posting re what the academic research says will not be tolerated?
It’s fraud, What. People go to jail for this sort of thing. Have you ever heard the name “Bernie Madoff”?
These boards claim to permit honest posting and promise us all that they will protect us from the sorts of posters who threaten to kill our family members if we post honestly on what the research says.
Scott Burns nailed it. He said that the reason that so few will tell us the straight story about stock investing is that there is so much more money to be made playing to people’s Get RIch Quick fantasies, telling people what they want to hear rather than what they need to hear.
That ain’t what I’m about, what.
Please try to find someone else to help you promote the Get RIch Quick garbage. I care about my fellow community members. I will post honestly or I will post not.
Non-negotiable.
Rob
Of course, you are more than free to setup your own message board.
It’s good to know that you consider me free to do that, What.
I hope you also consider me free to encourage all middle-class investors to demand better of the boards and blogs that have banned honest posting and of the “experts” who continue to advocate Buy-and-Hold strategies 30 years after they were discredited by the academic research. I intend to see every one of those boards and blogs opened up to honest posting in days to come.
I also hope you consider me free to bring lawsuits against you and the other Lindauerheads and Greaney Goons and the owners of the sites that have permitted you to engage in defamation and threats of physical violence as part of your effort to block millions of middle-class investors from learning about the academic research that has been kept from them for 30 years now.
I intend to move ahead with these initiatives whether you consider me free to do so or not. But I view it as a plus to hear you consider me free to do the things I intend to do.
Please take care, my long-time abusive-posting friend.
Rob
Yes, you are free to bring lawsuits…and the people who you sue are free to counter sue and the courts are free to declare your suits frivolous and make you pay all legal fees for both parties including various fines up to 25k. Since you are probably not very well off this could put a dent in whatever is left of your retirement.
It’s a free country in that way.
I can’t speak for all the boards but the ones I visit that you are banned from have discussions on SWR all the time – just without you.
I am certainly not ‘demanding’ that you post dishonestly. I am ‘suggesting’ you behave in a manner where people can actually stand you for more than 30 seconds. You are completely unlikable and irritating and until you fix these issues you will continue to be banned and your website will remain a graveyard of half baked ideas.
You would be banned from a ‘Valuation Informed Indexing’ board (if one existed that you weren’t running) you are such a miscreant.
Yes, you are free to bring lawsuits…and the people who you sue are free to counter sue and the courts are free to declare your suits frivolous and make you pay all legal fees for both parties including various fines up to 25k.
I understand, What. It’s all part of the wonderful game.
If, at the end of the process, there never again will be any community member at any board or blog on the internet who feels intimidated into posting dishonestly on safe withdrawal rates, it will all have been worth it, no? I sure think so.
Rob
I can’t speak for all the boards but the ones I visit that you are banned from have discussions on SWR all the time – just without you.
Please point me to the URLs for the threads where they discuss how to get the Old School studies corrected, What. It’s not enough for a few people to know that they get the numbers people use to plan their retirements wildly wrong, right? We need to get the word out to the millions of middle-class people who were either taken in by the demonstrably false claims in the studies or who may be taken in in days to come.
Please point me to the URLs where you discuss plans to get articles appearing on the front page of the Wall Street Journal and the New York Times. And please point me to the URLs where you get help from Bogle and Bernstein and Swedroe and Burns and all the other “experts” in this field.
And please point me to the URLs where you discuss WHY the studies were in error. Please point me to the URLs where you discuss the 30 years of research showing that Buy-and-Hold is the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind and how you are developing plans to persuade Wall Street to spend hundreds of millions promoting Valuation-Informed Indexing rather than Buy-and-Hold so that we all can obtain far higher returns while taking on far less risk and retire many years sooner.
That’s what we would be talking about if I were present in those communities and if there were no intimidation tactics being employed to stop me or any of the others who want to move forward with these initiatives.
SHOW ME THE URLs!
Rob
I am certainly not ‘demanding’ that you post dishonestly. I am ‘suggesting’ you behave in a manner where people can actually stand you for more than 30 seconds.
John Greaney is the leader of the Goons, What. John funded the Retire Early Home Page at Motley Fool and Motley Fool gave him the power to create a message that all visitors to the board would see when they first showed up there. John elected to say in that introductory message that the first thing any newcomer should do is read all of Rob Bennett’s post because they were the best stuff on the board.
That changed on the morning of May 13, 2002. My manner was A-OK on May 12, 2002, and my manner was the manner of the devil on May 13, 2002. Why? What happened?
That was the morning of the day that I put up the post saying that the Old School safe withdrawal rate studies got the numbers wildly wrong. That’s what changed.
You know that. I know that. Everybody who has ever listened in to the discussions knows that. Every site administrator who has banned me knows that.
Now —
If you feel that what I discuss above (the newspaper articles and so on) is too extreme, you of course don’t have to buy into it right now. That really is where I think things are headed and that really is where I want things to go. But it doesn’t have to go there in one day. It can’t go there in one day. That’s not the way humans are built. All these wonderful things have to take place gradually, bit by bit by bit.
We all would be 50 times better off than we are today if this gradual process had begun back in 1981. John Bogle’s birthday would be a national holiday today if we had done that. Because VII is the biggest advance in investing history and it is John Bogle’s insights that got us on the path that permitted some fool like me to generate all this wonderful stuff. So we ALL wish that we could take it back to 1981 and play a do-over.
We can’t do that.
So what is the second best choice?
The second best choice is to start that process that eventually gets us to the good place we all want to be in.
I don’t need to win everything on the first day. But I need to have a process that over time can get us there.
I can’t be made to feel ashamed to say what I believe. And others cannot be made to feel ashamed. There’s nothing to be ashamed about. And the right things cannot happen so long as people on one side of the table feel ashamed of what they believe.
Do the Buy-and-Holders have rights here?
Of course. They shouldn’t feel ashamed either. They have both a right and responsibility to say just what they believe too. They have every right in the world to believe that the end point of all this is that Rob Bennett will not end up on the front page of the New York Times but will instead end up on the front page of Mad Magazine. That’s all within the rules of the wonderful game.
It is NOT within the rules of the wonderful game for me to act as if I believe that it is okay for the Old School studies to remain uncorrected for another month or another week or another day. I DO NOT BELIEVE THIS.
I have to say what I believe. So does everyone else. That’s the way the game is played.
When we stop saying what we believe, the entire system collapses. It is because we permitted that to happen that we are where we are today.
I love the system. I want to see the system working properly again. I say what I believe, you say what you believe, all the others say what all the others believe. And we see where that takes us over time.
That’s my humble proposal.
It is also my non-negotiable demand.
I don’t ask any more than that. I don’t consider any less than that.
Either Buy-and-Hold can survive a discussion conducted under the published rules of all the boards and blogs or Buy-and-Hold has to go. This is not Rob Bennett’s Rule. It is America’s Rule.
This game is going to be played by America’s Rule. So I have publicly announced. And so shall it be done!
Rob
You are completely unlikable and irritating
I report what the academic research says, What.
Buy-and-Hold is a Get RIch Quick scheme. The academic research is unlikeable and irritating to those following a Buy-and-Hold strategy.
Please don’t get angry at the messenger. It is the academic research that you hate with such a burning passion.
If I could take you back in a time machine, I would protect you from ever getting emotionally addicted to this Get Rich Quick garbage. I don’t have a time machine. So we are just going to have to make do the best we can with what is available to us in the real world.
I can speak with respect and affection and warmth to Buy-and-Holders.
I cannot say good words for Get Rich Quick strategies.
I can say that Buy-and-Hold was intended to be something wonderful. I can say that Buy-and-Hold got us on a path that led to something wonderful.
I can say that I am a flawed human being, that I have been wrong about important things in the past and that this could be a case of that happening again.
I cannot say that I believe the Old School studies are analytically valid. I cannot say that I believe the academic research supports Buy-and-Hold. I cannot say that the economic crisis was caused by something other than the relentless promotion of Buy-and-Hold strategies for 30 years after the academic research showed that there is precisely zero chance that they could ever work for any long-term investor.
Your emotional pain is real, What. But your emotional pain is not caused by me alone. It is is caused by the strange circumstances of the times we live in. We are on the threshold of discovering the greatest investing strategy ever known to mankind. Buy-and-Hold was a first draft effort that contained one very serious flaw that needs to be corrected. You became emotionally addicted to the first draft effort before the real thing had time to grow big enough to entice you.
That’s something that happened before I came on the scene. I have nothing to do with any of that. I am a mild-mannered reporter who happened to report accurate SWR numbers on a discussion board and saw the roof cave in on me as a result. I am not your enemy, What. I am your good friend. When you become able to see that, this will all become 10,000 times easier than it has been for the first 10 years of our discussions.
Please take good care of yourself, my long-time abusive posting friend.
Rob
You would be banned from a ‘Valuation Informed Indexing’ board (if one existed that you weren’t running) you are such a miscreant.
That’s a 100 percent silly comment, What.
Everybody wants a smart, safe, simple investing strategy. Once we make the shift from Buy-and-Hold to Valuation-Informed Indexing, there won’t be one person anywhere on the face of Planet Internet unhappy with the work Rob Bennett has been doing for these past ten years.
You are upset because you are trying to hang on to your belief in Buy-and-Hold. The pain you are feeling is not my doing. I am the fellow trying to persuade you to GIVE UP on Buy-and-Hold.
None of us knows everything on the day we are born, What. We all need to learn from others. There is nothing shameful in it, And it is not just you. Give up the feelings of shame. Give up the anger. Give up the hate. Give up the contempt.
After you let go of that garbage, it’s good stuff piled on top of good stuff piled on top of good stuff.
It’s a wonderful life, What. Don’t let it pass you by, man. The world loves you. You just need to learn how to love it back.
Rob
I didn’t read your posts but whether I have 20 million or 30 really makes no difference so there is no ‘pain’ as you describe either way.
No one talks about getting the old studies ‘corrected’ because there is no error in the old studies and to wring your hands for 10+ years over the subject has been a massive waste of your life.
The old studies were conducted in a specific way covering a specific period of time and reported on the results. There are many other ways to look at the data and obviously you prefer others (but strangely enough are not very concrete on the specifics).
There are lots of discussions on concrete ways of viewing historical data and backtesting it, including those from Wade – who is yet another person you have managed to irritate to the point where he can’t stand you. And amazingly his view of testing historical data is remarkably close to some of your ramblings.
So, think about it. A generally friendly and professional guy like Wade who has similar opinions on the topic on which you have wasted 10+ years of your life on….and you can’t even get along with that guy? There is something quite seriously wrong with you.
I didn’t read your posts but whether I have 20 million or 30 really makes no difference so there is no ‘pain’ as you describe either way.
I believe you, What.
Rob
No one talks about getting the old studies ‘corrected’ because there is no error in the old studies
I still believe you.
Rob
Wade – who is yet another person you have managed to irritate to the point where he can’t stand you.
Wade would love to feel free to post honestly, What.
So would Bogle.
So would Shiller.
So would Bernstein.
So would — you!
The question is — How do we get from this awful place we are in today to the wonderful place where we all want to be tomorrow?
I say that is starts with one person refusing to post dishonestly.
Then it becomes two. Then 20. Then 200. Then 2000. Then 20,000. Then 2 million.
Then — No More Economic Crisis!
So my intent is to continue to post honestly on safe withdrawal rates and many other critically important investment-related topics.
It’s a win/win/win/win/win. For each and every one of us.
Rob
A generally friendly and professional guy like Wade who has similar opinions on the topic on which you have wasted 10+ years of your life on….and you can’t even get along with that guy? There is something quite seriously wrong with you.
No.
The Buy-and-Holders made a mistake.
Then we built our entire economic system around this mistake.
Textbooks were written based on the mistake. Seminars were conducted based on the mistake. Calculators were constructed based on the mistake. Financial planners built reputations based on the mistake. Magazines were launched based on the mistake.
Now we need to change all that. We need to FIX the mistake.
When we do, we all live better lives. It’s a mistake worth fixing. But, yes, there is some work involved.
The first step is for one person to insist on his right to post honestly re safe withdrawal rates. I have taken the first step.
It’s your move, What.
Rob
There is something quite seriously wrong with you.
There is something quite seriously wrong with our economy, What.
Perhaps you’ve noticed.
It is in the best interests of each and every one of us for us all to work together to fix that something.
Rob
A generally friendly and professional guy like Wade who has similar opinions on the topic on which you have wasted 10+ years of your life on….and you can’t even get along with that guy? There is something quite seriously wrong with you.
Or else there are very severe penalties attached to an individual’s decision to post with 100 percent honesty on these matters.
How is that going to change unless someone works up the courage to refuse to go along with the Social Taboo, What?
I challenge this Social Taboo.
I say it is killing us.
I predict that every last person on Planet Earth will cheer me for killing this Social Taboo once we all make it to the other side of the Big Black Mountain and are living far richer (in all meanings of the word) lives than we are today.
There’s only one way to find out for sure, right?
I spit on this Social Taboo. I will post honestly on safe withdrawal rates and on every other critically important investing-related topic or I will post not.
Non-negotiable.
Rob
I don’t see how anything you wrote has anything even remotely to do with my statements.
How is it possible that you can’t get along with someone with whom you agree 99.99% with? It is only possible if you have serious problems. And these problems will cause you to be a complete failure your entire life.
I don’t see how anything you wrote has anything even remotely to do with my statements.
I believe you, What.
Rob
How is it possible that you can’t get along with someone with whom you agree 99.99% with?
I of course get along wonderfully with Wade when it is the two of us talking things over by e-mail.
The problems occur when he says something in public and one of the Lindauerheads or Greaney Goons threatens to get him fired from his job for his terrible “crime” of posting honestly on the SWR topic. The man wants to keep his job, What. And I don’t want to post dishonestly. If he posts honestly, he runs the risk of losing his job. And if he posts dishonestly, I have to disassociate myself from his statements.
I have been arguing for years now that we need to bury all the Buy-and-Hold garbage 30 feet in the ground, where it can do no further damage to humans and other living things. Once we do this, all the problems go away. We have no more death threats. We have no more board bannings. We have no more retirement studies that get the numbers wildly wrong. We have no more economic crises.
The Buy-and-Holders did a wonderful thing when they came up with the idea of rooting their investing strategies in the academic research. That was pure gold. Where they slipped up was with their idea that they would not need to change the strategy when the academic research taught us new things. Valuation-Informed Indexing takes us to the next step. It is the first honest and accurate research-based strategy. It is the first research-based strategy that can work in the real world for the long-term investor. Valuation-Informed Indexing is what Buy-and-Hold was intended to be but could not be in the early years because research on critically important questions had not yet been completed.
Making the move from BH to VII is a win/win/win/win. It’s not even possible for the rational human mind to imagine any possible downside.
Please take care, my long-time abusive-posting friend.
Rob
Wow.
Just wow.
(and not in a good way, Rob.)
Backatcha, my old friend.
Rob
Really – so you and Wade still continue to exchange friendly emails?
I think I have asked for evidence of this ‘getting Wade fired from his job’ at least a half dozen times. Do you have any evidence to support that or the death threat thing that you bring up incessantly? In absence of any material evidence its hard to believe. It just sounds like you have a couple of loose wires. Did the men in black from area 51 hack into the internet message boards and remove evidence of these death and job firing threats?
Your amazing focus on ‘burying buy-and-hold’ is really very interesting (in a clinical sort of way). Always very entertaining Rob.
Really – so you and Wade still continue to exchange friendly emails?
I’ve exchanged dozens of e-mails with Wade, What. They all were 100 percent friendly.
Rob
Actually, I take that back.
They were not all 100 percent friendly.
But they were all at least 80 percent friendly.
The vast majority were 100 percent friendly.
Even some of my communications with John Walter Russell were not 100 percent friendly. We had some disagreements, some conflicts. We always worked them out in the end. But there were some points re which a significant amount of friction evidenced itself.
That’s probably just the way it goes when two people are examining such important questions. We all have different backgrounds and different personalities. We see things from different perspectives.
Rob
Do you have any evidence to support that or the death threat thing that you bring up incessantly?
Of course.
My guess is that, if you run a search for “Wade Pfau” at my site, you will find out what you need to know.
I am in the process of preparing an article that will list 101 such incidents, with links. That will make it easier to check out this sort of thing.
It may take me a month or more to get that article together. It’s going to be one of those long ones!
Rob
In absence of any material evidence its hard to believe.
Oh, it’s hard to believe when you have the material evidence staring back at you from your computer screen, What.
I’ve has a front-row seat for the entire saga. “Hard to believe” doesn’t begin to convey the reality of this one!
Rob
It just sounds like you have a couple of loose wires.
Yeah, yeah.
Rob
Did the men in black from area 51 hack into the internet message boards and remove evidence of these death and job firing threats?
It’s worse than that, What.
The evidence is available for public display at dozens of boards and blogs. The Buy-and-Holders do not care. We don’t need any Men in Black to cover things up. So long as most investors are emotionally addicted to a pure Get Rich Quick approach, they do not want to know the realities and they get angry at anyone who tries to talk about them.
I put up the post pointing out the errors in the Old School studies on the morning of May 13, 2002. It wasn’t something that would have been difficult for anyone to check. The SWR is a numerical calculation! Anyone could have checked out what I said in 10 minutes. But 10 years have passed. Only in the past year or two have we achieved a consensus that the studies get the numbers wildly wrong. And even today there are people (like Wade!) saying that it would be “harsh” to expect the authors of the studies to correct them before they cause more failed retirements.
Top that!
Rob
Your amazing focus on ‘burying buy-and-hold’ is really very interesting (in a clinical sort of way).
Buy-and-Hold (Get RIch Quick) is the enemy, What.
There’s genius at the core of this model. The idea of rooting investing strategies in the academic research is the biggest advance in the history of investing. It is going to take us to places so amazing that most people cannot even imagine them today.
But part of the scientific process is acknowledging when you make mistakes. When you refuse to do that, you are not engaged in science anymore. Those who claim to be following a scientific approach who are unwilling to correct mistakes when the academic research reveals them are really involved in a form of fraud (it’s a form of fraud in which the person engaged in the act of fraud hurts himself as much as others because he is suffering from cognitive dissonance).
The worst of all worlds is to have a pure Get Rich Quick strategy that is marketed as a strategy supported by academic research. People want to place their faith in such nonsense because we all have a weakness that draws us to financial porn. But, when there are seemingly well-informed people saying that the porn is rooted in science, it becomes almost impossible for the average person to resist.
Buy-and-Hold has caused more human misery that any earlier idea in the history of personal finance. There’s a good chance that it will be putting us in the Second Great Depression sometime within the next few years.
The other side of the story is that Valuation-Informed Indexing is everything that Buy-and-Hold was promoted as being, plus a lot more. VII is so good that it may enrich us all enough to help us pull out of the Second Great Depression and enter the greatest period of economic growth in U.S. history.
Wish us luck!
Rob
OK, I am really looking forward to the links about death threats and getting people fired from their jobs. I have found it stunning that you have referred to these incidents hundreds of times yet never produced any evidence. And by the way, a link to your own article where you write youself that people threatened you with death is not ‘evidence’.
I notice you didn’t answer the question about Wade, instead referring to past tense. So..do you _still_ continue to exchange friendly emails with Wade?
So..I did a search on the internet and what I found is way beyond the ‘odd behavior’ you typically display.
You seem to have written a post where you ‘create’ a death threat against youself and then complained about the post and asked for it to be taken down.
http://www.retireearlyhomepage.com/cgi-bin/yabb2/YaBB.pl?board=HOCO;action=display;num=1129304509
You are an interesting bug in the petri dish, thats for sure.
I did a search for Wade Pfau getting fired and I was very dissapointed to not find anything as entertaining as the death threat topic. All the posts claiming Wade was threatened were written by Rob Bennett, there is no other supporting evidence I could find.
Too bad.
I am really looking forward to the links about death threats and getting people fired from their jobs.
I bet.
Rob
So..do you _still_ continue to exchange friendly emails with Wade?
I didn’t exchange any with him today, What.
We exchange e-mails when there is something that comes up that one of us wants to share with the other.
Imagine!
Rob
You seem to have written a post where you ‘create’ a death threat against youself and then complained about the post and asked for it to be taken down.
It’s a crazy mixed-up kind of job being performed in a crazy mixed-up kind of world.
Whatchagondo?
Rob
You are an interesting bug in the petri dish, thats for sure.
Um — Thanks, What.
I think.
Rob
I did a search for Wade Pfau
Try doing it a second time, What.
Rob
Or don’t.
Your call.
Rob
So basically, that is a deceptive and round about way of saying Wade no longer exchanges emails with you (and frankly, I can’t see why anyone would unless they were trying to recruit you for a carnival show or get a kick out of watching your clown act).
I did a search a second time using a different search engine and could not find any references to Wade Pfau and threats.
Waiting for those links – or some other kind of evidence not manufactured by yourself.
So basically, that is a deceptive and round about way of saying Wade no longer exchanges emails with you
Um — you nailed it, What.
I can’t see why anyone would unless they were trying to recruit you for a carnival show or get a kick out of watching your clown act
Your non-emotional approach to understanding how stock investing works beats me every time, What. You’ve got it together.
I did a search a second time using a different search engine and could not find any references to Wade Pfau and threats.
You might want to try searching a third time.
But please don’t feel obligated to do so. It’s a personal choice.
Waiting for those links – or some other kind of evidence not manufactured by yourself.
We all have our crosses to carry in this Valley of Tears, What.
I will be praying that you find some measure of peace.
I know you are on top of things, in any event. That must be a comfort in these troubled times.
Rob
So, are you admitting that you fabricated both ‘incidents’
1) Death threats against yourself
2) Wade’s job threats
>
I’ve fabricated everything, What.
I even fabricated the thing about the Old School SWR studies getting the numbers wildly wrong.
Those are fine studies. Like Bernstein said, of course they are analytically valid!
Rob
Well, that seems to settle it. Too bad, I was hoping your wild eye nutjob conspiracy theories had some basis – it would make you more interesting.
Why do you always put ‘analytically’ in front of ‘valid’ or ‘invalid’? Things are either valid or invalid, you don’t need to use these extra meaningless words.
And btw, there is nothing “analytically” (lol, it feels ridiculous writing that) invalid about the past studies. All they do is look at backtested results over a short period of time and report on what would have worked during that time frame. Could you please quote the parts you think are wrong directly from those studies? It seems you are blaming the studies for the uneducated interpretation of them by laymen and various members of the financial industry – which is misguided and silly.
Well, that seems to settle it.
Another satisfied customer!
Too bad
Kinda, sorta.
Why do you always put ‘analytically’ in front of ‘valid’ or ‘invalid’? Things are either valid or invalid, you don’t need to use these extra meaningless words.
It’s more precise to say “analytically invalid.” It details in what respect the studies are invalid. They are invalid because they employ an approach to the analysis of stock investing that was discredited by the academic research in 1981. Prior to 1981, such studies would not have been known to have been invalid. They still would have generated wrong numbers. But without the research showing that valuations affect long-term returns, we would not have known this. Since 1981, there is no excuse (other than cognitive dissonance) for those following the academic research to not know that these studies are analytically invalid.
The word “analytical” before “invalid” is not meaningless. It signifies something important. It provides the context people need to understand why we are in the circumstances we are in today. If the mistake made in these studies were some small thing, they obviously would have been corrected on the afternoon of May 13, 2002, or perhaps even earlier than that. The reality is that the mistake is core to the Buy-and-Hold Model. So correcting the mistake made in the SWR studies leads us inevitably to correcting the entire Buy-and-Hold Model.
That means correcting most of the textbooks in this field and most of the calculators and most of the books and most of the magazine articles and so on. It is a huge change (it’s a huge step forward, to be sure, but even huge positive changes scare people who make a good living pushing the discredited ideas).
All of the “controversy” we have seen over the past 10 years relates to that word “analytical.” If the errors were simple calculation errors, they would have been promptly corrected. It’s not that calculation errors are less important. Analytical errors are far more important, they cause far more damage. It’s that the correction process is more far reaching with analytical errors.
When we fix those SWR studies, we leave the Buy-and-Hold Model behind and move on to the Valuation-Informed Indexing Model. It is because this is so momentous a change that the fight has been so bitter and vicious and prolonged. Lots of people feel that they have a lot to lose if middle-class investors find a way to learn the realities of stock investing, as reported on in the academic research of the past 30 years. Of course, the other side of the story is that ALL of us will be living far richer (in every sense of the word) lives once we make it to the other side of The Big Black Mountain.
Rob
And btw, there is nothing “analytically” (lol, it feels ridiculous writing that) invalid about the past studies.
Um — good point, What. That makes a lot of sense.
All they do is look at backtested results over a short period of time and report on what would have worked during that time frame.
No, that’s not all they do. They take one extra step. They refer to the number generated by following the process you describe as the “safe withdrawal rate.”
If the market were efficient, that really would be the safe withdrawal rate and the studies would not be analytically invalid.
If valuations affect long-term returns (30 years of academic research shows this to be so), that number is NOT the safe withdrawal rate and millions of people will suffer failed retirements as a result of the decision of many “experts” in this field not to point out the analytical errors in these studies.
We should permit honest and accurate reporting of the safe withdrawal rate on every board and blog on the internet, What.
That’s my sincere take on this important matter, in any event.
Please take care.
Rob
Could you please quote the parts you think are wrong directly from those studies?
The part that is wrong is the title of the studies, the part where they claim to identify the “safe withdrawal rate.” If you use an analytically valid methodology, you get very, very different numbers.
It seems you are blaming the studies for the uneducated interpretation of them by laymen and various members of the financial industry – which is misguided and silly.
No, I am saying that the studies should be corrected. Millions of people are likely going to suffer failed retirements as a result of the demonstrably false claims put forward in these studies.
A failed retirement is a serious life setback.
My sincere take.
Rob
But they did find the historical safe withdrawal rate over the period of time the study was conducted.
Looking backwards, not forwards.
I assume you know the difference? Guess not:
“If the market were efficient, that really would be the safe withdrawal rate and the studies would not be analytically invalid.”
Why? Because you think efficiency means that stocks give you the same return every year or has the same return sequences? This is seriously misguided. I can’t think of any reason why you could use a historical SWR and expect it to hold going forward with any certainty. I can think of many many reasons why you could NOT use such a SWR.
So…what is the difference between analytically invalid and invalid? I am sure your reasoning is solid but I don’t think you wrote a long enough explanation about it (that I didn’t read). It needs to be at least 3x as long to be analytically valid.
So, the word analytically gives lots of context? Interesting! What other words or small mundane objects have special meaning to you beyond their typical scope?
But they did find the historical safe withdrawal rate over the period of time the study was conducted.
That’s incorrect, What.
They identified the Historical SURVIVING Withdrawal Rate..
It’s not possible to determine what is Safe without taking valuations into consideration. Shiller’s 1981 research proved that.
Rob
I can’t think of any reason why you could use a historical SWR and expect it to hold going forward with any certainty.
If the market were efficient, you could use it, What.
If the market is efficient, the market is equally risky at all times. If the market were equally risky at all times and if 4 percent had worked for 140 years, that would be a strong indication that 4 percent would be likely to work over the next 30 years.
If valuations affect long-term returns, the market is not efficient and the market is not equally risky at all times. In that case, the fact that 4 percent worked for 140 years is NOT a strong indication that 4 percent will work over the next 30 years.
If the market carries different levels of risk at different times, you need to take into consideration how risky it is at the moment you begin your retirement to know how risky that retirement is. If the data shows that there is only a 30 percent chance that your retirement will survive if you take a 4 percent withdrawal, it is obviously a false claim to say that a 4 percent withdrawal is “safe.” A retirement has to have better than a 30 percent chance of working out to be considered “safe” by reasonable people.
Rob
I can think of many many reasons why you could NOT use such a SWR.
Anyone who retires has to form an assessment of whether his retirement plan is safe or not before he process, What. To do so, he needs effective tools to perform the assessment.
SWR analysis is a powerful tool. If the market were efficient, the Old School studies would provide a great deal of help to retirees.
If what you are suggesting here is that the tool would not be 100 percent foolproof, you are proving precisely nothing that everyone did already know. Every study that I have seen has caveat language indicating that it is not a perfect. There is no act of fraud in letting people know what the SWR is even if you are aware that there is some chance that something unexpected will happen and that withdrawal rate will not work out.
There IS an act of fraud in failing to correct a study that reports wildly wrong numbers. That’s not a case where the retirements fail because of the author of the study is not all-knowing. That’s a case where the retirements fail because the author of the study is so money hungry or pride hungry that he is not willing to correct a study that contains very serious errors even after those errors are brought to his attention.
The Old School studies should have been corrected on the afternoon of May 13, 2002. The fact that we have seen 10 years of death threats and defamation and board bannings from the authors of these garbage studies tells us what we need to know about them. Study authors acting in good faith do not behave in such a manner.
No way, no how. It’s not a close call.
Rob
What other words or small mundane objects have special meaning to you beyond their typical scope?
A peek into the mind of the Buy-and-Hold Investor, circa April 2012.
Science!
Rob
So if 4% was so wide of the mark, Rob, how do you justify your own personal approximately 7.5% withdrawal rate, drawn from a stagnant $400K nest egg of 100% TIPS? Are you actually invested somewhere that is throwing off returns that would justify that rate of withdrawal?
Because, unless you had a cash infusion at some point, then simple arithmetic would seem to mandate that either your funds are now running out, or else you have dramatically curtailed your spending (or both).
But then, I guess your actual withdrawal plan versus what you state others should do, is much like when we look at your own investing plan versus what you claim others should do — not congruent in the slightest.
So in the end, we have Rob Bennett — a proud and public adherent of “Do not as I do, but as I say” school of financial advice.
I’ll bet the kids love it when you trot that one out, don’t they, Rob?
Rob, how do you justify your own personal approximately 7.5% withdrawal rate, drawn from a stagnant $400K nest egg of 100% TIPS?
You’re quoting information from defamation posts put up by the sorts of Internet Sewer Rats who have “defended” Lindauer and Greaney, Drip Guy.
Um — good stuff.
Rob
Please remember that I am the one who said we should permit honest posting way back on the morning of May 13, 2002.
Had you listened to me and the hundreds of members of the Motley Fool community who endorsed my suggestion that we permit honest posting, you wouldn’t be in the situation you are in today.
I can help and I am happy to help.
But I do not possess magic powers.
If I am to help, I need some cooperation from you and the other Sewer Rats.
Short of that, there is nothing I can do.
Please take care.
Rob
Rob,
You won’t even speak honestly here at your own site, i.e. if those estimates for your withdrawal rates are so far off, then what are the right ones? And what error? And where are the links to the death threats?
Here on your own blog, one can only assume you reign 100% supreme… yet you still won’t speak honestly and with specificity on ANY of the multitude of things you wave your hands angrily and impotently at. You won’t respond to legitimate inquiries, questions or concerns. You won’t explicate your own investing strategy, entry and exit points, nest egg amount, withdrawal rate, net worth, or define Lucky Seven as anything other than a slogan, even as you claim wildly inaccurate things about the most humble and benign of investing strategies — Buy and Hold using indexes with a dollop of bonds appropriate for risk and age. You claim, without any support whatsoever, but with lots of nasty-tinged hype, that this frankly seldom-used approach somehow caused the financial crisis! You fly in the face of obvious facts and claim the stock industry promotes this method, INSTEAD of what they actually provably do — incessantly beating the drum for active trading strategies designed to move money from the investor’s pocket to their own.
So, seriously, why would anyone expect you to post honestly and accurately anywhere else?
Rob, you’d single-handedly be the worst thing that ever happened to the average investor, (yes, worse than Suse Oreman and Jim Kramer put together) IF anyone took your goofy advice to heart. Which, most are in no danger of doing, since you puncture your very own arguments faster than you can make new ones.
You claim, without any support whatsoever, but with lots of nasty-tinged hype, that this frankly seldom-used approach somehow caused the financial crisis!
The stock market was overvalued by $12 trillion in January 2000, Drip Guy. That’s not Rob Bennett’s number. That’s John Bogle’s number. I think it would be fair to say that John Bogle has precisely zero reason to be biased against Buy-and-Hold.
Bogle also says that prices always return to fair value over 10 years or so. He says this is an “Iron Law” of the stock market.
So we knew in January 2000 that we were going to see $12 trillion of spending power disappear from our economy over the course of the next 10 years.
Please offer an explanation of how we could have avoided an economic crisis after losing $12 trillion in spending power. There was zero chance. It is the reckless promotion of Buy-and-Hold that caused the economic crisis.
Rob
You fly in the face of obvious facts and claim the stock industry promotes this method, INSTEAD of what they actually provably do — incessantly beating the drum for active trading strategies designed to move money from the investor’s pocket to their own.
Some argue for lots of trading, some argue for no trading. But ALL push Buy-and-Hold, Drip Guy.
The data shows that the most likely annualized 10-year return in 2000 was a negative 1 percent real. How many of the “experts” were telling us this at the time? How many cover stories were there in Money magazine warning middle-class investors to lower their stock allocations and fast? How hard was this idea pushed by Mel Lindauer at the Vanguard Diehards board or at the Bogleheads Forum? How much effort does the industry put into informing investors that the market is priced today for a 65 percent crash?
Scott Burns spilled the beans. He told us that the reason why the “experts” don’t report the honest SWR numbers is that it is “information most people don’t want to hear.” Is that the job of an investing “expert,” to encourage our Get Rich Quick fantasies? Or is the job to tell us what we don’t WANT to hear but what we very much NEED to hear?
You hate me with a burning passion not because of my personality, Drip Guy. Your friend John Greaney LOVED my personality in the days before I reported honestly on safe withdrawal rates. You hate me because I told you the truth about stock investing and, like Scott Burns says, it is information you don’t want to hear.
You NEED to hear it, Drip Guy.
Your friend are not the people who flatter you. Your true friends are the ones who tell you the straight story whether it hurts your pride for you to hear it or not.
Rob
Rob, you’d single-handedly be the worst thing that ever happened to the average investor
That explains why I was the person who discovered the errors in the Old School safe withdrawal rate studies, Drip Guy.
Makes sense.
Rob
Buy and Hold using indexes with a dollop of bonds appropriate for risk and age.
As if there was such a thing.
As if we could all sprinkle blue pixie dust in the air and thereby come to live in mystical, magical world in which it would be possible to identify “a dollop of bonds appropriate for risk and age” without taking the price at which stocks are selling into consideration.
Good luck with that, Drip Guy.
Rob
you puncture your very own arguments faster than you can make new ones.
So says someone who has invested his retirement money pursuant to Buy-and-Hold “principles.”
I wonder why.
Rob
“It’s not possible to determine what is Safe without taking valuations into consideration. Shiller’s 1981 research proved that.”
This is absolutely wrong. You can clearly identify the historical safe withdrawal rate. It is backwards looking, not forwards. I suspect your mind is mushy and cannot understand the difference between what actually happened in the past and forecasting the future.
“If the market is efficient, the market is equally risky at all times. If the market were equally risky at all times and if 4 percent had worked for 140 years, that would be a strong indication that 4 percent would be likely to work over the next 30 years.”
So, for instance, it would be possible for the Japanese market to be equally risky just before the U.S. dropped 2 nuclear bombs on Japan than the Japanese market was in 1982?
And the Argentinian stock market would be just as risky right before their currency crisis as it was afterwards?
You are so stupid its funny – in a funny entertaining way.
I am expecting a reply that somehow blames buy-and-hold for currency crises and nuclear attacks due to middle class retirements being destroyed.
Even though the middle class owns no stocks anyway.
You can clearly identify the historical safe withdrawal rate. It is backwards looking, not forwards.
The idea of a backwards-looking safety assessment is nonsense, What.
If something is safe, it is safe on a forward-looking basis. If it is not safe on a forward-looking basis, it is not safe.
There are real live people suffering the effects of this fraud.
It is not a funny joke.
Rob
So, for instance, it would be possible for the Japanese market to be equally risky just before the U.S. dropped 2 nuclear bombs on Japan than the Japanese market was in 1982?
The SWR concept has built into it a caveat that it works only “if stocks perform in the future somewhat as they always have in the past.”
If stocks perform in entirely new ways, no SWR (valid or not) applies.
The problem with the Old School studies is that they fail even when the caveat does not apply. For a retirement beginning in 2000, a retirement plan using a 4 percent withdrawal has a 30 percent of working out if stocks perform in the future as they always have in the past.
To claim that a retirement plan with a 30 percent chance of working out is safe is an act of fraud.
I am not willing to go there, What. Your word games don’t impress me.
Rob
You are so stupid its funny – in a funny entertaining way.
The words of someone who favors a scientific approach to investing.
Rob
I am expecting a reply that somehow blames buy-and-hold for currency crises and nuclear attacks due to middle class retirements being destroyed.
It’s not hard to imagine the promotion of Buy-and-Hold strategies causing a currency crisis.
Buy-and-Hold could cause a nuclear war only in an indirect sense. It was the promotion of Buy-and-Hold that caused the Great Depression. The Great Depression became a global economic crisis and the widespread suffering in Germany played a big role in causing Hitler’s rise to power. So Buy-and-Hold certainly had a big indirect effect in causing the dropping of the nuclear bombs on Japan.
We should all be doing all we can to stop our economy from falling into a Second Great Depression, What. Again, the joke being told here is not funny.
Rob
Even though the middle class owns no stocks anyway.
Good point.
That explains why the Wall Street Con Men spend hundreds of millions of dollars promoting Buy-and-Hold strategies. There’s no money in it.
I forgot.
Rob
“The idea of a backwards-looking safety assessment is nonsense, What.”
No one did a ‘safety assessment’. The Trinity study did a ‘historical safe withdrawl rate backtest’.
“It’s not hard to imagine the promotion of Buy-and-Hold strategies causing a currency crisis.”
Really? How? Since you seem utterly uneducated in macro economics I would love to hear how this plays out.
Rob Bennett – the man who lives in a world where nuclear bombs destroying major cities should not affect stock returns.
“That explains why the Wall Street Con Men spend hundreds of millions of dollars promoting Buy-and-Hold strategies. There’s no money in it.”
OK, first of all, hardly any of that money is targeted at the middle class. Secondly, the products and services that actually are targeted to the middle class are not buy and hold. Its more like ‘buy and transfer to salesperson’s bank account as fast as possible’ via all sorts of various fees and structured products. The middle class don’t have enough to invest to warrant any one other than a lowly Edward Jones salesguy knocking on their door.
No one did a ‘safety assessment’.
That’s correct.
Calculate the SWR properly and you get very different numbers.
I am saying that we should correct the studies that got the numbers wrong and calculate the SWR properly in the future.
Why not?
Is anyone able to imagine any possible downside?
Rob
Since you seem utterly uneducated in macro economics
How did I happen to become the person who discovered the errors in the Old School SWR studies, What?
Answer that question and the rest will open up to you.
Being educated in what doesn’t work doesn’t help you understand what works.
Once you see that something is wrong, you don’t want to keep on doing that thing. You want to correct the error, learn what is right, and move on to that.
Rob
Rob Bennett – the man who lives in a world where nuclear bombs destroying major cities should not affect stock returns.
I’m the man saying we would be better off not to cause those bombs to go off. Taking steps to prevent economic crises is taking steps to prevent wars.
You are the man who said up above that you are not interested in bringing the economic crisis to an end.
This is a battle of love vs. hate, What. It’s a loving thing to want people to know how to earn higher returns while taking on less risk. It is a hateful thing to want to trick people (including yourself) into thinking that using phony baloney numbers in their retirement plans can work out in the long run.
Strategies rooted in hate can work in the short term. Humans are flawed creatures. But they never work in the long run. They can’t. It’s a logical impossibility. Hate destroys. We all end up paying the price for hate in the end.
Love builds. We all end up enjoying the benefits of love in the end.
I’m a lover, not a destroyer.
Rob
hardly any of that money is targeted at the middle class.
Then why is there opposition to the idea of reporting honestly on safe withdrawal rates?
Rob
the products and services that actually are targeted to the middle class are not buy and hold. Its more like ‘buy and transfer to salesperson’s bank account as fast as possible’ via all sorts of various fees and structured products.
The two biggest discoveries in the history of investing analysis are: (1) that short-term timing never works; and (2) that long-term timing always works and is required for those hoping to have any realistic hope of achieving long-term success.
You are drawing a distinction between those who advocate short-term timing and those who oppose it (the Buy-and-Holders). I am with you re short-term timing, as you know. So there is no dispute here.
But the fact that the Buy-and-Holders are right about short-term timing doesn’t make them right about long-term timing. The Buy-and-Holders oppose long-term timing. And they produce lots of materials saying that timing doesn’t work or isn’t necessary. And, yes, lots of these materials are seen by middle-class people and influence them.
There are millions of people who believe today that it is not necessary to time the market. That’s a stone cold fact. That’s why we have lost so much money. That’s why our economy has collapsed. That’s why we are going to see millions of failed retirements in days to come. That’s why we have seen so many of our boards burned to the ground. That’s why you are so filled with anger and hate (you feel shame over the human misery you have caused with your advocacy of Buy-and-Hold). That’s why people on both the left and the right are losing confidence in our political system.
If you want to say that the Buy-and-Holders made a mistake, I have no problem with that. That’s what I believe.
I am saying that it is time to fix the mistake. You are saying that it is imperative that we continue to cover it up. That’s where we go on different tracks.
The cover-up is killing us, What. Look at your posts. It is turning you into something sub-human. No investing “strategy” is worth what this Buy-and-Hold nonsense is doing to you.
When something is destroying a society, that society needs to take action in its self-defense. Buy-and-Hold is destroying us. It served a purpose once upon a time. We have grown past it. We need to move on.
This is what I believe.
I think we will be fast friends once we make it together to the other side of The Big Black Mountain.
Hang in there, friend.
Rob
If there were nothing to what I say, you would not be angry, What.
There has to be some fear causing this anger.
That fear makes you want this thing to stop.
For me, it has just the opposite effect.
Your fear (and the fear of many others) makes me want to go forward. I want to figure out that fear and bring an end to it.
You never solve your fear because you never face it. I want to bring it to an end for you (and for the many others).
The same fear drives both of us. But it drives you backwards and it drives me forwards.
At least that’s how it looks from my end of the table.
Rob
The Trinity study did a ‘historical safe withdrawl rate backtest’.
No, it didn’t. The Trinity study did a historical surviving withdrawal rate backtest.
A withdrawal rate that survives is not the same as a withdrawal rate that is safe.
There have been cases in history when a 4 percent withdrawal was high-risk but in which it survived.
The statement “4 percent has always survived” is correct. The statement “4 percent has always been safe” is false.
I am saying that we should correct the studies and report the numbers accurately and honestly in the future.
What’s the downside?
Rob
The middle class don’t have enough to invest to warrant any one other than a lowly Edward Jones salesguy knocking on their door.
If we permit honest posting on investing topics on the internet, we don’t need to worry about what salespeople say. Once we open the internet up to honest posting, middle-class people can use the internet to gain access to the information they need to invest effectively.
I see this as a win/win/win/win/win.
Rob
the products and services that actually are targeted to the middle class are not buy and hold.
If you don’t believe that there are any middle-class people participating in the Bogleheads Forum, you are living in a dream world, What.
If they were poor, they wouldn’t own stocks and wouldn’t be interested.
If they were rich, they would be able to afford personal financial advisors.
Buy-and-Hold is targeted to the middle class.
Bogle is popular with the middle class. So is Money magazine, which often runs articles supportive of Buy-and-Hold. Money runs article saying that it is not necessary to time the market all the time.
Rob
“If you don’t believe that there are any middle-class people participating in the Bogleheads Forum, you are living in a dream world, What.”
First, a large number of the boglehead posters are not middle class, they are wealthy. They have forum polls which support this conclusion. Second, the Boglehead forum is a niche, a tiny part of the Internet and does not reflect what happens on Wall Street at all. Lastly, having a personal financial advisor is probably the best way to have horrible investment performance.
“The statement “4 percent has always survived” is correct. The statement “4 percent has always been safe” is false.”
This is nonsense. Looking backwards there is no difference between what was safe and what survived and it doesn’t matter either. Looking forwards is a different story.
I am not angry or scared – I view you as simple entertainment – you are a mentally ill person trapped in their own circular non-logic. Empirically your logic makes no sense. You are poor, I am rich. You’re life goal is a complete failure, while mine is uncontestedly a success.
First, a large number of the boglehead posters are not middle class, they are wealthy. They have forum polls which support this conclusion.
They also have forum polls which show that many are middle class.
Why not be honest about it? Would it cause you pain?
Rob
the Boglehead forum is a niche, a tiny part of the Internet and does not reflect what happens on Wall Street at all.
It’s the biggest investing board on the internet, What.
Bogleheads are the lowest-common-denominator investors. Wall Street figures that, if they can fool these people, they can fool lots and lots of people.
I am saying that they should stop fooling us and start shooting straight with us.
Downside?
Rob
having a personal financial advisor is probably the best way to have horrible investment performance.
And getting your investing ideas from a board that banned honest posting on SWRs as its first order of business is the way to go?
That makes sense.
Rob
Looking backwards there is no difference between what was safe and what survived and it doesn’t matter either. Looking forwards is a different story.
“Safe” is a concept that always looks forward.
If you drive drunk and live, you can’t say that driving drunk is now safe.
If you do, you are trying to trick people (and perhaps even yourself).
This is why I say that the Old School studies should be corrected. The tricks that Wall Street pulls on us are not helping.
Rob
I am not angry or scared – I view you as simple entertainment – you are a mentally ill person trapped in their own circular non-logic. Empirically your logic makes no sense. You are poor, I am rich. You’re life goal is a complete failure, while mine is uncontestedly a success.
That makes a lot of sense, What.
Rob
““Safe” is a concept that always looks forward.”
No, it is not. Looking backwards, it “was” completely safe to put your portfolio into gold a decade ago. Looking forward does that seem safe? Probably not. You seem to be a bit mushy on the concept of time. Maybe a symptom of your condition.
“And getting your investing ideas from a board that banned honest posting on SWRs as its first order of business is the way to go?”
I don’t go to any board like that and I don’t know of any board like that either. I do know of boards that rightfully ban malcontents such as yourself. And I don’t get any investing ideas from boards either.
“Bogleheads are the lowest-common-denominator investors. Wall Street figures that, if they can fool these people, they can fool lots and lots of people.”
This is quite an odd statement since the fees that Bogleheads pay are the least possible. What exactly (in your confused mind) does Wall Street get out of them?
What exactly (in your confused mind) does Wall Street get out of them?
Scott Burns nailed it, What.
He told us that the reason why the “experts” haven’t reported on the realities of safe withdrawal rates for 10 years since we discovered the errors in the Old School studies is that “it is information most people don’t want to hear.”
When you are trying to sell something, you want to tap into emotional hot buttons. Feed people’s Get Rich Quick fantasies and you hit the hottest emotional button out there. The Stock-Selling Industry makes its money selling stocks. Naturally, it views Buy-and-Hold as the greatest thing since sliced bread. The “idea” that there is no need to take price into consideration when buying stocks is the purest Get RIch Quick idea ever concocted by the human mind.
The problem is that each investor who turns to Get RIch Quick/Buy-and-Hold loses hundreds of thousands of dollars by doing so. The financial losses eventually grow so large that the economy collapses. Where is the Stock-Selling Industry then?
The way this is handled in other fields is that people are expected to follow ethical guidelines. When you discover an error in a study you did that people use to plan their retirements, you correct it. Fast. No Excuses.
I believe strongly that we need to apply the ethical standards that apply in every other field of human endeavor to Wall Street. I support the idea of permitting honest posting on safe withdrawal rates and other important investment-related topics on every board and blog on the internet. I oppose the efforts of the Lindaurheads and Greaney Goons to intimidate us all into posting dishonestly re these matters.
Rob
So…you wrote a lot of stuff but didn’t answer the question. Awesome.
What?
Rob