Set forth below is the text of a comment that I recently posted to the Goon Central board, as well as two brief follow-ups:
http://www.bogleheads.org/forum/viewtopic.php?f=10&t=112149&start=50Meh, these threads are always depressing. By the time I get to the end of them, I feel like I’ll be lucky to get 0% real return over the next 30 years.
This is why secular bear markets can only come to an end when the Buy-and-Holders sell. Investors who follow true research-based strategies are not affected emotionally by words that appear in discussion-board threads. Following a true research-based strategy gives you confidence. Buy-and-Holders know on some level of consciousness that any strategy rooted in the idea that price doesn’t matter is b.s. So they are always looking over their shoulders. They always live in fear. And, when the fear gets to them, they don’t just sell to the level that is proper. They oversell. They go as far to the negative emotional extreme as they earlier went to the positive emotional extreme. This guy gets down when he reads scary discussions because there is a part of him that knows that he is living in a fantasy world. He’s not dumb. I’ve never met a dumb Buy-and-Holder. This is why it is not strictly correct to say that Valuation-Informed Indexers “predict the future.” We say what will happen in the future. But we base those statements on an understanding of the implications of events that have already taken place. We are not saying that investors are going to become excessively emotional and that is going to cause a 65 percent price drop. Investors already are excessively emotional. This comes through in every discussion that has ever been held at BHeads on SWRs. All that Valuation-Informed Indexers say is that that emotion has to be resolved at some point in the not-too-distant future. That’s not so much a “prediction” as it is just an observation rooted in simple logic. When an airplane takes off, it’s safe to “predict” that it is going to land someone in the not-too-distant future, is it not? It cannot just keep flying around in circles forever without access to a source of fuel. This fellow is scared. I am not predicting that he is going to become scared. I am stating that he is scared today. He is not going to sell today. But he is going to sell in the not-too-distant future. That’s what scared investors do when things get shaky (and there are always shaky times in the not-too-distant future). This fellow is not the only scared Buy-and-Holder. ALL Buy-and-Holders are scared. Hence, this board. Hence, the unwillingness to correct the studies. You can deny your fears from now until Doomsday and you will not convince me. Actions speak louder than words. People who put forward the sorts of posts we see at this board are scared people. All human history tells us that. The fellow who wrote that post will probably sell before the people who post to this board. That just means that he will get a better price than you will. You will sell too. At a lower price. Then we will all pull together and get to work fixing our broken economy. It will be better on the other side. We will all be friends on the other side. Heaven help us all! Rob
|
The Pink Unicorn says
I can tell you that have many a lot of dumb people that failed to save enough for their retirement and then tried to blame it on something else other than their own neglect and stupidity. In fact, it is the single greatest factor (back up by facts) in which people will struggle during their retirement.
Rob says
We don’t agree re this one, Pink.
It’s true that the savings rate is too low. We agree re that one.
We won’t improve it by calling the people who don’t save enough “dumb.”
If people don’t save enough, that tells me that today’s saving advice doesn’t work.
Perhaps it is the people who promote the conventional saving advice who are “dumb.”
When people call other people names, it is because they are lacking something themselves.
That’s my sincere take, in any event.
I wish you all good things.
Rob
Trebor Martin says
People may need ideas on how to save more…that much is true. Yet, you decide to spend your days (and nights) carping on about an imaginary error in safe withdrawal rate studies.
And regarding name calling, you are the worst offender of all, christening as goons all that disagree with you.
Rob says
If the error that I pointed to on May 13, 2002, was imaginary, why is it that the Wall Street Journal is acknowledging in 2013 that I was right all along?
Rob
Rob says
I don’t say that all who disagree with me are “Goons,” Trebor.
I identify four types of behavior that make one a “Goon”: (1) death threats; (2) Tens of thousands of acts of defamation; (3) unjustified board bannings; and (4) threats to get academic researchers fired from their jobs.
There are MILLIONS of people who follow Buy-and-Hold strategies who have never engaged in any of that behavior. Those are the people who I am trying to reach. Those are the people whose lives the Goons are destroying by preventing them from hearing my message.
There has been a significant percentage of our community that has been thrilled to hear my message, going back to the first day. Those people are open to learning about true research-based strategies. And they have a right to hear about them.
It is because you have spent 11 years aiding a cover-up that has done great harm to those millions of people that you will be going to prison following the next price crash, Trebor.
Those people matter. Those people have rights. And in a not-too-terribly-distant future day those rights will be given recognition at every investing board and blog on the internet.
I will see to it.
My best wishes to you and yours.
Rob
The Pink Unicorn says
Based on your definition Rob, I see no proof on your side. The only proof on death threats are from you. Based on comments from Wade, it looks you are responsible for defamation. The board bannings were justified, yet I notice that you have no problem deleting posts. Wade has never said he had threats of getting fired. In fact, he pointed the finger at you for causing him harm. If you differ, please provide factual based information based on links to 3rd party sources.
Rob, please ARE dumb if they don’t save enough. They have heard over and over again about the cost of retirement. In surveys, they all acknowledge that they are not saving enough. They convince themselves that they have “needs” today that keeps them from savings sufficiently, yet we see that everyone feels the “need” the latest smart phone/Ipad, fashions, vacations, new car, etc. When we sit here with a national savings rate in the low single digits, people should acknowledge the facts that they are DUMB.
Trebor Martin says
Rob
It was not an error in the study….it was a clearly stated constraint.
Second, by your definition you are the goon.
Rob says
They convince themselves that they have “needs” today that keeps them from savings sufficiently, yet we see that everyone feels the “need” the latest smart phone/Ipad, fashions, vacations, new car, etc. When we sit here with a national savings rate in the low single digits, people should acknowledge the facts that they are DUMB.
We strongly disagree, Pink.
I agree that many people do not manage their money well. But it is not because they lack I.Q. points. I have seen people earning six-figure salaries who cannot save a dime. You say that these people are “dumb.” How the heck do they hold down jobs paying six-figure salaries if they are so darn dumb?
The companies that are trying to entice us to spend direct millions of dollars to developing marketing campaigns that cause us to do so. We are not intellectually dumb. We are emotionally vulnerable.
The answer here is to develop tools to help the ordinary consumer fight back against the efforts of marketing people to take away their money. That’s Passion Saving. That’s the name of the site.
Take care, man.
Rob
Rob says
It was not an error in the study….it was a clearly stated constraint.
That makes sense, Trebor.
So a tobacco company can publish a study saying that smoking three packs a day will do no damage to your health and none of us should call them out on it?
You could produce a study showing that if you made it a “constraint” of your study to ignore all deaths caused by cancer. That’s what the Buy-and-Hold Mafia did when they pushed their retirement “studies” ignoring the effect of valuations, which just happens to be the single biggest factor affecting the safe withdrawal rate.
And this “constraint” (it’s called a “deception” by those who speak English plainly and properly) was not “clearly stated.” If the deception had been clearly stated, not one person would have been upset when I put up a post at the Motley Fool site reporting the numbers accurately. It is because I posted honestly on this question that the Buy-and-Hold Mafia has been using its power and influence to keep millions of middle-class investors from hearing my message for 11 years now.
I called the Buy-and-Hold Mafia out on their smelly Get Rich Quick garbage. And I didn’t back back when advised that I had better remember my place.
I ain’t apologizing.
I view it as my finest moment.
I wish you well.
Rob
The Pink Unicorn says
Rob,
First of all, most people do not have 6 figure incomes. Take a look at the average US household income. Secondly, people know better, but don’t do what it takes. They don’t want to make the sacrifices. I have tried working with countless people on their budgets and they will tell you that they “need” the full cable package and their Starbucks coffee and that they could never live without their Iphone. Yet, they will tell you that they know they should save more.
Don’t blame companies. People will still buy stuff even without the ads. Besides, that is just passing the blame. We are all adults and are responsible for our own decisions.
Rob says
I couldn’t possibly disagree with you more, Pink.
I don’t really “blame” companies. But I certainly say that the primary problem is that the companies have huge marketing departments that help them achieve their goal (persuade us to spend) while the average person has little to make use of in an effort to fight back. We need to even up the game.
You are right that people say they “need” Starbucks. That’s 100 percent so. But, when they try saving for a goal that really matters to them (a goal that can be achieved within five years), you see their idea of what they “need” changing dramatically.
You get nowhere insulting the people you are trying to help. It’s a strategy that never works. Bob Dylan wrote:
Remember when you’re out there trying to heal the sick
That you must always first forgive them
I know lots of very, very, very smart people who do not save effectively.
And I know some not-so-terribly-smart people who do just fine.
I question whether there is any correlation whatsoever between intelligence and ability to save.
My take.
Rob
The Pink Unicorn says
Rob,
People have a brain. They know they need to save, but they want instant gratification.
You keep wanting to find someone or something else to blame. The fact is that YOU and a large majority of Americans have not saved enough for retirement. When you retired, you had more than most Americans, yet everyone told you when you posted up your plans that you did not have enough saved and you were taking a huge risk (particularly when you still had a growing family).
There are countless articles on every major news site and financial site on a regular basis that stress the need to save diligently for retirement. Virtually every one of the articles suggest savings rates far in excess of what the average savings rate is in the U.S. Yet, people still don’t save enough. The average American says that they can’t save more because they don’t make enough, yet we see long lines every time a new iPhone comes out, long lines at Disney World, continued sales of the latest electronic devices, stable business at restaurants and movie theaters, etc.
You want to blame the buy and holders, corporations, goons, etc., but YOU are the one that is to blame for falling short of your retirement goals. Don’t feel too bad. You’ve got company. It is the same case for those millions of Americans you keep talking about.
By the way, have you been watching the record lottery ticket sales again? Yep, those tickets are necessities, right???
Rob says
There are countless articles on every major news site and financial site on a regular basis that stress the need to save diligently for retirement. Virtually every one of the articles suggest savings rates far in excess of what the average savings rate is in the U.S. Yet, people still don’t save enough.
Indeed.
So maybe having countless articles all saying the same thing, a thing that has never worked, isn’t the answer.
That’s what I think, Pink.
Rob
Rob says
You want to blame the buy and holders, corporations, goons, etc., but YOU are the one that is to blame for falling short of your retirement goals. Don’t feel too bad. You’ve got company.
And you’ve got it all figured out, Pink.
Rob
The Pink Unicorn says
Rob,
It really isn’t that hard. Simple math.
Rob says
Then why do all of the millions of people who you say have brains not make use of this simple math, Pink?
Rob
The Pink Unicorn says
Rob,
Because they want instant gratification.
Rob says
Fair enough.
So we need saving strategies that permit people to enjoy instant (or at least something closer to instant than what most experts in this field are providing today) gratification FROM SAVING.
I never saved a dime until I was 35, Pink.
I saved like a madman once I discovered the Passion Saving concept.
Was I dumber before?
I wasn’t dumber. As you say, I wanted instant gratification.
Well, guess what? That’s how the humans are. We ALL prefer instant gratification to long-deferred gratification. Not because we are dumb. Because we are smart. Instant gratification is a sure thing. A bird in the hand is worth two in the bush.
So we need to encourage people to save for financial freedom goals that can be achieved in five years or fewer.
That’s the answer, Pink.
Calling people “dumb” accomplishes precisely nothing except to make insecure people feel better about themselves at the expense of others.
It’s LosersVille stuff.
Rob
The Pink Unicorn says
Rob,
Choosing instant gratification when knowing that you have other needs is dumb. Stop trying to rationalize bad decisions. Insecure people can’t handle the harsh truth. Retiring too early is no different than not saving enough. It is also a form of instant gratification.
Rob says
Makes sense.
Rob