Set forth below is the text of a comment that I recently put to a blog entry at this site:
The “buy and hold mafia” blocks your success at every turn. It sends death threats to your millions of followers to keep them from commenting here, and has gotten away with all this for years. Not one arrest. That is one smart mafia. Yet they can’t stop your daily rants against them. That is one stupid mafia.
I agree with your suggestion that the members of the Buy-and-Hold Mafia are both very smart and very stupid, X Files.
I’ve never met a dumb Buy-and-Holder. They are aces in the I.Q. department. All of them. They possess far more firepower than what is needed to take on the job they have assigned themselves.
So far, so good.
What has tripped them up is that intellectual firepower can be used to reason or to rationalize. How intellectual firepower is employed depends on the human will. If our wills tells us that we don’t want to know the answer to a problem, it is the most intellectually skilled among us who do the best job of persuading themselves that they don’t know the answer.
The Buy-and-Hold Mafia isn’t just destroying the lives of millions of middle-class investors. It is destroying the lives of the Buy-and-Hold Mafia at the same time. The members of the Buy-and-Hold Mafia follow the advice they offer to others; they are not dishonest in that respect.
It’s all very tragic.
And very human.
I look forward to the day when I have the intellectual firepower and determination of the Buy-and-Hold Mafia helping me spread the word about Valuation-Informed Indexing, X Files. I could use some strong and hard-working troops fighting on my side!
Don’t let the bad guys get you down, man.
Rob the General Surrounded on All Fours Sides by “Enemies” Who Want All the Same Things He Wants
There is no “Buy and Hold Mafia” holding you down. You’re free to post here at your blog. You’re free to go to a financial blogger conference and make a total fool of yourself.
You could use this blog to explain your theories and to post supporting documents like the peer reviewed articles you often mention but never post, but you don’t do that. You just use this blog to rant and rave about people who support “Buy and Hold”. It seems the one holding Valuation Informed Indexing down is YOU, Rob.
We disagree, Sensible.
I have zero problem with people who post in support of Buy-and-Hold in sincere ways. Pro-Buy-and-Hold posts are part of the process by which we all learn together. Those who believe in Buy-and-Hold have both a right and responsibility to say so in all their posts. People who put forward sincere posts in support of Buy-and-Hold are our friends.
People who engage in ABUSIVE posting are NOT our friends.
Those people INTIMIDATE those who have doubts about Buy-and-Hold from saying so.
Those people hurt us in very serious ways. Those people caused the economic crisis. Those people have for 11 years now covered up the errors in the Old School safe withdrawal rate studies. Those people are in the process of bringing on the Second Great Depression. Those people have been committing felonies for many years now and need to be put in prison. Animals belong in cages, no? There is a REASON why we made the sort of behavior these people engage in felonies under the laws of the United States.
Once prison sentences are announced for those who have put up posts in “defense” of Mel Linduaer and John Greaney, our troubles are over, Sensible. We are the luckiest generation of investors who ever lived. The research that I co-authored with Wade Pfau shows us all how to reduce the risk of stock investing by 70 percent. Once we get that study reported on at the front page of the New York Times, we will be on our way to the greatest period of economic growth in our history.
But, yes, the prison sentences must come first. We have seen that Jack Bogle is afraid to post honestly because of his fear of what you Goons will do to him if he dares to “cross” you. We have seen that Bill Bernstein is afraid to post honestly because of his fear of what you Goons will do to him if he dares to “cross” you. We have seen that Larry Swedroe is afraid to post honestly because of his fear of what you Goons will do to him if he dares to “cross” you.
We need these people, and thousands and thousands of others, posting honestly. We need to get accurate information out to millions of middle-class investors to have any hope of recovering from this economic crisis.
My best wishes to you and yours.
Rob
Is this blog for real or satire like The Onion or something?
It’s Buy-and-Hold that is the satire, Tron.
There was a time when smart people thought that the market might be efficient. If that were so, Buy-and-Hold would be the ideal strategy.
Yale Economics Professor Robert Shiller (he won the Nobel prize last week) was the first person to actually check whether this is so. He found that the market is NOT even a tiny big efficient. He published his research in 1981.
Had he published it in 1971, we would be living through the greatest period of economic growth in U.S. history today. But because he published it in 1981, the Buy-and-Holders had already been promoting their ideas for years and were too embarrassed to acknowledge the mistake. So people in this field have been covering up the realities for 30 years now. The cover-up caused the economic crisis. The cover-up caused millions of middle-class people to suffer failed retirements.
This site is about ENDING the satire. I argue at this site that we all should be able to post honestly on safe withdrawal rates and on scores of other critically important investment-related topics at EVERY discussion board and blog on the internet.
Please take good care, Tron.
Rob
Well based on your response I can’t quite tell if you are being serious or doing a Colbert type act. In any event I’ll bite. Here are a few observations and questions I have.
You have an impressive ability to write volumes of repetitive nothingness.
Your entire site feels as though I am reading the text version of an infomercial to the point I am astounded that there doesn’t appear to be anything for sale here.
Any truely worthwhile content you have is completely drowned out by ridiculous hyperbole. Here are some examples of this. You state buy and hold is broken and does not work feverishly. Now if I have a car that is broken and does not work it will not start and is incapable of getting me from point A to point B. Buy and hold on the other hand has clearly afforded many individuals their desired retirement getting them from point A to point B. Perhaps you feel your VII is superior but in that case shouldn’t buy and hold simply be seen as sub-optimal not broken and never capable of working. If you lead with this notion, that buy and hold is broken and can never work, how can you expect anyone to take you seriously?
You state a buy and hold strategy is the biggest personal finance mistake in history. Really? A plan of setting aside a portion of your paycheck each month into a balanced portfolio that slowly becomes more conservative is the worst personal finance decision you can make? It is worse than spending your entire paycheck and maxing out credit cards? Again, statements such as these pretty much destroy your credibility and make it seem that you are trying to sell something.
I understand your premise, that you should scale back equities when they are overvalued and double down when they are undervalued. That could quite possibility be the least revolutionary assertion ever made. The issue is that no real mention is made of how to determine this unless it is literally buried in your fanatical ramblings. I see some mention of P/E10 as an indicator, the only indicator it seems, but no real strategy or plan. You must admit that it is significantly easier to implement a buy and hold approach than a very cryptic VII plan. I have literally scoured your website for clear instruction on how to implement VII but I can find nothing. If you are leaving it up to the individual to determine when stocks are overvalued or undervalued than that is honestly a joke.
Furthermore your blog never seems to indicate what you are actually doing so one can’t even just ape your movements. The P/E10 seems to indicate that you would be largely out of equities. So you have been sitting on the sidelines for a number of years and intend to do so until the P/E10 ratio drops significantly. Meaning you could very well be out of equities for half a decade or more? I could just sell now too and wait but having stayed invested for an additional couple of years would put me in a much better situation than you. Would you agree with this?
If you could please outline how you actually implement your VII and the return you have had so far I think that would be very beneficial. The fact that you don’t very clearly makes it seem that you have something to hide. Based on what I’ve read when asked this directly you try and talk your way out of it used car salesmen style.
Please respond directly to my questions without pulling in unnecessary conspiracy theories etc. Specifically how exactly are you implementing this VII strategy and what has been the track record thus far.
Perhaps you feel your VII is superior but in that case shouldn’t buy and hold simply be seen as sub-optimal not broken and never capable of working.
I believe that Valuation-Informed Indexing is superior to Buy–and-Hold. It always either increases return or decreases risk.
This can be tested with The Investor’s Scenario Surfer. In the hundreds of tests I have run, VII ha produced higher 30-year returns in 90 percent of the cases. In the other 10 percent, Buy-and-Hold produced higher returns. But there is obviously more risk with a strategy that only works in 10 percent of the possible scenarios. So I think it is fair to say that VII always produces better risk-adjusted returns.
You say that some people have been able to retire using Buy-and-Hold. Stocks are an amazing asset class. It’s hard to come up with a strategy that is so bad that not one person using it would be able to retire. There are people who put all their money in lottery tickets who end up being able to retire. I see that as too low a bar. If one strategy ALWAYS produces lower long-term risk-adjusted returns than another, I think it is fair to say that it never works. The aim of an investing strategy is to produce HIGHER returns with LESS risk. Buy-and-Hold hurts you in both departments.
I of course have zero objection to the idea of people USING Buy-and-Hold because they personally find appeal in it. Those who like it should of course use it. But they should not make exaggerated claims for it. They should just use it and be happy that they have something they like to use.
If they know what they are getting into, there is no reason why they should be angry that others use other strategies. That’s what I see with you Goons — you are ANGRY that others use Valuation-Informed Indexing. That’s a very bad sign, in my assessment. Anger is a negative emotion. If using Buy-and-Hold is making people angry, there is something very wrong with Buy-and-Hold.
I pick up from your comments that Buy-and-Hold is being pushed for MARKETING reasons. The idea seems to be — This is good enough for all the investors who are not capable of gaining sufficient control over their emotions to follow a Valuation-Informed Indexing strategy. I see this as a chicken-and-egg thing. EVERYONE is capable of following VII strategies successfully so long as they hear about them frequently. It’s because they don’t hear about them often that the ideas cause confusion.
In any event, no one has a right to use abusive strategies to stop people from learning about a strategy they might like. If people want to push Buy-and-Hold as the strategy that is good enough for people who would have a hard time following a VII strategy, that’s fine. But it is up to the investors to decide for themselves which category they fit in. Everyone has a right to promote VII strategies at every discussion board and blog on the internet. Just as everyone has a right to promote BH strategies at every discussion board and blog on the internet.
Rob
Well based on your response I can’t quite tell if you are being serious or doing a Colbert type act.
You have an impressive ability to write volumes of repetitive nothingness.
Your entire site feels as though I am reading the text version of an infomercial to the point I am astounded that there doesn’t appear to be anything for sale here.
These are Goon comments.
Yuck!
The fact that these comments were advanced as part of an effort to “defend” Buy-and-Hold shows the problem with Buy-and-Hold. The idea that there is no need for investors to consider price when buying stocks is rooted in emotion, not research.
Rob
You state a buy and hold strategy is the biggest personal finance mistake in history. Really?
The Buy-and-Hold “idea” is the biggest mistake ever made in the history of personal finance.
Had Shiller published his revolutionary (his word) research in 1971, we would all be Valuation-Informed Indexers today. It was a quirk of history that the famous book pushing Buy-and-Hold was published in 1974 and then Shiller supplied the missing piece of the puzzle seven years later.
The Buy-and-Holders were well-intentioned. They came up with many breakthrough insights. Their finding that short-term timing never works is the second most important finding in the history of investing analysis. Please don’t forget that I considered myself a Buy-and-Holder myself for many years. On the morning of May 13, 2002, I was not seeking to supplant Buy-and-Hold. I was seeking to IMPROVE it. The mistake that the Buy-and-Holders made would have been of no great consequence had they corrected it when they first learned of the error. That is obviously not what happened.
We are the luckiest generation of investors who ever lived. We should be enjoying the greatest period of economic growth in our history. Look where we are. We are in an economic crisis that is on its way to becoming the Second Great Depression. We have seen dozens of wonderful discussion boards and blogs either burned to the ground or ethically compromised. And you are telling me that this was not the worst mistake ever made in the history of personal finance?
I love the Buy-and-Holders. I think of them as my friends. I find it hard to imagine how anyone who thinks of the Buy-and-Holders as his friends could argue that this was not the worst mistake ever made in the history of personal finance. These people wanted to do good and they were one insight away from doing an amazing amount of good. And because they jumped to the hasty conclusion that a finding that short-term timing never works means that long-term timing also is not required we have seen all this ugliness and hate and financial devastation and political unrest and posters going to prison and all the rest. That’s bad stuff, Tron. Very, very, very bad stuff.
I stand by my statement that this was the worst mistake ever made in the history of personal finance. The Buy-and-Holders need to accept that if they are ever to get on the a good and positive and constructive and life-affirming path once again.
Rob
It is worse than spending your entire paycheck and maxing out credit cards?
I don’t think that following a Buy-and-Hold strategy is worse than spending your entire paycheck and maxing our credit cards.
But no responsible person advocates maxing out credit cards as a money management strategy.
Many well-respected figures DO advocate Buy-and-Hold.
So Buy-and-Hold is much more dangerous.
There are millions of people who are trying to do the right thing with their money who today follow Buy-and-Hold strategies. Because they believe that people like Jack Bogle are shooting straight with them. Bogle is NOT shooting straight with the people who listen to his advice. Not when he cannot even work up the courage to acknowledge that the Old School SWR studies get the numbers wildly wrong and should be corrected immediately. Or when he cannot work up the courage to object in a strong and firm and public voice to the use of death threats and board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs.
There are responsibilities that follow from possessing the sort of fame that Jack Bogle has come to possess. Jack has failed to honor those responsibilities. This is a very serious problem. We saw political unrest from both sides of the political spectrum following the 2008 crash. We are going to see much greater political unrest following the next crash. The millions of people who are going to see their lives destroyed are going to be very, very angry with Bogle and with all the others who have been playing games rather than shooting straight re what the last 32 years of peer-reviewed academic research in this field really says.
Having people lose confidence in our economic and political system is MUCH worse than having some people max out their credit cards. It is MANY, MANY TIMES WORSE. The Buy-and-Hold Crisis is the biggest crisis that our nation has faced since the Civil War.
Your arrogant tone is 100 percent inappropriate, Tron. Your arrogant tone is sickening, given the circumstances we all face here.
Rob
I understand your premise, that you should scale back equities when they are overvalued and double down when they are undervalued.
It’s encouraging to hear that.
That could quite possibility be the least revolutionary assertion ever made.
It’s simple common sense, nothing more and nothing less.
It’s a shame that common sense doesn’t bring the bucks in the door in the way that the pure Get Rich Quick approach does.
The issue is that no real mention is made of how to determine this unless it is literally buried in your fanatical ramblings.
This is of course a 100 percent false claim, a 100 percent Goon claim.
Rob
You must admit that it is significantly easier to implement a buy and hold approach than a very cryptic VII plan.
I do not.
A huckster used-car salesman might try to argue that it is “easier” just to pay whatever price he asks for a car rather than to check Edmunds.com before putting money on the table.
I don’t buy it. It gets the transaction completed 15 minutes sooner. That much is so.
But then you spend the rest of your lifetime regretting allowing yourself to be taken.
So it is with Buy-and-Hold.
The peer-reviewed academic research shows that permitting yourself to be taken by the Buy-and-Hold hucksters will delay your retirement by five or ten years.
It’s easier to retire five to ten years sooner, in my assessment. Needing to face the emotional strain that follows from going with a pure Get Rich Quick approach, and then experiencing all the disappointments that follow from seeing your retirement plan fail, is difficult stuff.
Buy-and-Hold is easier for five minutes. It is harder for the remainder of your life, as years and years of lost compounding returns accumulate.
Rob
If you are leaving it up to the individual to determine when stocks are overvalued or undervalued than that is honestly a joke.
I say that everyone working in this field should be permitted to post honestly.
That includes Bogle. That includes Bernstein. That includes Swedroe. That includes Ferri. That includes Burns. And on and on and on.
When everyone in the field feels safe posting honestly, no individual investor will be left without lots of helpful guidance.
We permit honest posting in every other field of human endeavor. I believe that it is well past time to permit it in the investing advice field as well.
It would be the biggest advance we have ever experienced on many different levels.
Rob
Meaning you could very well be out of equities for half a decade or more? I could just sell now too and wait but having stayed invested for an additional couple of years would put me in a much better situation than you. Would you agree with this?
I’ve been out of equities since the Summer of 1996 because stocks have been selling at insanely inflated prices since the Summer of 1996 (with the one exception of a few months in early 2009).
Buy-and-Holders could certainly go into a better situation than Valuation-Infomed Indexers for a limited time-period that could last 10 years or even longer. They have never in 140 years of stock market history done better on a risk-adjusted basis over a 30-year time-period. VII is a LONG-TERM strategy. There’s no getting around it.
Rob
Specifically how exactly are you implementing this VII strategy and what has been the track record thus far.
I buy stocks in the same way I buy sweaters and cars and bananas. I check the price and I compare it with what I can get elsewhere and, when the deal is good, I buy. That’s it.
I went to zero stocks in 1996 and of course bought 3.5 percent real TIPS when they became available. About six different people have done the math over the years and every analysis found that I am ahead of where I would be had I followed a Buy-and-Hold strategy. No one except you Goons (who of course cannot be trusted ever to be honest) has done the math in recent years. So I cannot say with certainty where things stand today. My guess is that today I am slightly up.
Following the next price crash, I will be up by a lot. And the differential will grow with time as I earn compounding returns on the differential for many years into the future.
Ignoring the price of something you buy is NEVER a good idea. It is a logical impossibility that this “strategy” could ever produce good long-term results. Yes, a Get Rich Quick strategy can LOOK good for short periods of time. But it can never produce good results in the long term. Common sense tells us that this must be so and 32 years of peer-reviewed academic research (based on 140 years of historical return data) CONFIRM that it in fact has always been so in the real world.
I naturally wish you all the best things that this life has to offer a person, Tron.
Rob
Thanks for all of the replies Rob although I would not consider myself a Goon. I am simply trying to understand your ideas better because I do have the shared belief that the buy and hold strategy can be improved upon.
Unfortunately in your 10 lengthy responses that is not really addressed. You only offer one incredibly vague statement:
“I buy stocks in the same way I buy sweaters and cars and bananas. I check the price and I compare it with what I can get elsewhere and, when the deal is good, I buy.”
You must admit this tells me absolutely nothing of actionable value.
So you have been out of equities for nearly 20 years? Meaning someone starting out in 1996 as a 25 year old beginning to set aside for their retirement would now be almost 45 without ever investing in equities? I don’t feel very confident in that approach.
I have not crunched the numbers and I think it speaks volumes that you haven’t either regarding your specific strategy vs buy and hold. It seems almost impossible to me that your no equity since 1996 approach could be ahead of a buy and hold strategy which includes continued buying through crashes and rebalances.
I would not consider myself a Goon.
Your comments that I quoted above show otherwise, Tron.
Rob
You must admit this tells me absolutely nothing of actionable value.
It tells you everything you need to know, Tron.
If you consider price when buying stocks, you cannot go wrong. At least that has been so for 140 years.
If you follow a Buy-and-Hold strategy, you cannot do well in the long term. At least that’s been so for 140 years.
Considering price is 80 percent of the game.
Do it and it’s almost impossible to do poorly.
Fail to do it and it’s almost impossible to do well.
Pure Get Rich Quick strategies never work out well for anyone but the Wall Street Con Men.
My best wishes to you.
Rob
So you have been out of equities for nearly 20 years? Meaning someone starting out in 1996 as a 25 year old beginning to set aside for their retirement would now be almost 45 without ever investing in equities? I don’t feel very confident in that approach.
There’s 32 years of peer-reviewed academic research showing that that’s what works, Tron.
You are of course free to follow a different strategy. It’s your call.
I think it would be fair to say that stocks could not remain so insanely priced for so long if we permitted honest posting on stock investing questions on the internet. It is by permitting honest posting that we all become effective investors and pull prices down to reasonable levels. I am all in favor of it. We would ALL be better off if stocks had been priced reasonably for the past 17 years.
I believe that following the next crash Buy-and-Hold will be buried 30 feet in the ground and we will never need to worry about it raising its ugly head again. Following the three earlier Buy-and-Hold crises we did not have 32 years of peer-reviewed academic research showing that it can never work for a single long-term investor. So at least we can say that things appear to be headed in the right direction.
Take care, man.
Rob
I have not crunched the numbers and I think it speaks volumes that you haven’t either regarding your specific strategy vs buy and hold. It seems almost impossible to me that your no equity since 1996 approach could be ahead of a buy and hold strategy which includes continued buying through crashes and rebalances.
It doesn’t surprise me to hear a Buy-and-Holder say “it seems impossible.” Buy-and-Hold is pure emotion.
It doesn’t seem impossible to those who follow research-based strategies to hear that stocks have performed poorly at a time when they were insanely overpriced. That’s just what the research shows us ALWAYS happens. There has never been a single exception in 140 years.
You don’t understand the concept of “crashes.” You make it sound like stocks are always worth buying following a crash. This is not so. As always, whether stocks are worth buying following a crash DEPENDS ON THE PRICE AT WHICH THEY ARE SELLING.
A crash that takes prices down to fair value or lower obviously makes them worth buying.
A crash that fails to do that obviously does not.
Stocks were so insanely priced in 2000 that it is taking several crashes to get the price down to something reasonable. The Wall Street Con Men don’t want us to know that. That’s why I recommend becoming familiar with the peer-reviewed academic research of the past 32 years. The research tells the straight story, in my assessment.
I naturally wish you all good things regardless of what investing strategies you elect to follow, Tron.
Rob
I do have the shared belief that the buy and hold strategy can be improved upon.
Buy-and-Hold is just a marketing gimmick. OF COURSE it can be improved on. It’s the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind. Holy moly!
Ask a Buy-and-Holder to provide you the URL of just one study showing that there is no need to change your stock allocation in response to big valuation shifts. You will never get a coherent response to that question. Not from Jack Bogle. Not from Bill Bernstein. Not from Larry Swedroe. Not from anyone.
Why?
Because it is impossible to generate a study supporting the opposite of what works!
The key to successful long-term investing is ALWAYS taking price into account when setting your stock allocation. ALL of the research shows this. There has never been a single exception in 140 years.
Buy-and-Hold is a marketing gimmick. It has taken billions of dollars out of the pockets of middle-class investors and put them into the pockets of the Wall Street Con Men. That’s all that a pure Get Rich Quick strategy can ever do.
Why the heck do you think the Buy-and-Holders become so brutally abusive when anyone reposts honestly and accurately on what the last 32 years of peer-reviewed academic research says?
I’ll give you a hint, Tron. It ain’t becaue they think that there is some mysterious, mystical study somewhere supporting this smelly Get Rich Quick garbage.
Anyway, I wish you the best of luck in all your future endeavors.
Rob
so what PE levels should i look to buy or sell stocks to implement VII?
Rob, why do you feel the need to reply to one comment with 8 comments?
Rob, why do you feel the need to reply to one comment with 8 comments?
Sometimes there is more than a single point made in a comment, Sensible.
If I were to respond to every point in a single post, that post would be very long.
It makes more sense to break up such responses.
Rob
so what PE levels should i look to buy or sell stocks to implement VII?
That’s like asking “What price should I pay for a sweater?”
There is no one answer.
You need to look at your risk tolerance, you need to look at how close you are to retirement, you need to look at how much confidence you have in VII, you need to look at all sorts of things.
A P/E10 value of 15 is fair value. Stocks offer a very strong long-term value proposition when they are selling at fair-value prices. As a general rule, a stock allocation of 60 percent or more makes sense when the P/E10 is 15.
There is almost zero long-term risk when the P/E10 value goes below 12. I would consider a stock allocation of 90 percent or something in that neighborhood when the P/E10 goes below 12.
The danger zone is when the P/E10 value goes above 20. You might want to think about dropping to a stock allocation of 30 percent at that point.
When the P/E10 hits 25, we ALWAYS experience collective losses so large as to bring on an economic crisis. Anything above 25 is truly scary.
You need to look at whether you are hitting these P/E10 values on the way up or on the way down. If we hit 25 on the way down, a P/E10 value of 8 is not far away. If we hit 25 on the way up, 8 could be a ways off yet.
Rob
Hey, Rob. Good to see you sticking to your guns. I’m curious about one thing, though.
with the one exception of a few months in early 2009
Why didn’t you buy stocks then?
Thanks for your time Rob. I now see this blog is more about emotion based retribution than it is about level headed financial discourse. One only needs to look at your most recent post to determine that…
“Why Weren’t Charges Filed Against People Who Hung Blacks from Trees in the Days of Segregation in the South? People Feel That ‘You Can’t Fight City Hall.’ People Rationalize That “It’s Not My Fight.’ It’s Everyone’s Fight. We All Work in the Same Economy.”
You seem to attack even those trying to understand your ideas, such as myself, as buy and holders. It is no wonder this place is a ghost town except for the occasional person who comments just to watch you squirm.
I realize your outlook is the long term as it should be but somehow sitting on the sidelines for 20 years waiting for a tremendous crash doesn’t seem prudent. You could be waiting another 10+ years. 30 years, that could be an individual’s entire working career. How could they expect to retire under those circumstances?
Why didn’t you buy stocks then?
I never make quick moves, Wab.
It’s not a good idea because sometimes you are just acting on emotion. And it’s never necessary.
Stocks definitely offered a strong long-term value proposition at that time and I said so in all of the podcasts I recorded at the time.
I had started talks with my wife about buying. And then prices jumped up again and the value proposition was no longer there.
I don’t regret “missing out.” I believe that those who bought at that time will end up doing well if they hold through the next crash. But that will not be easy. I saved myself that emotional unease by holding off. I will of course be able to buy following the next crash, when the long-term value proposition for stocks is likely to be the best we have ever seen.
Rob
You could be waiting another 10+ years. 30 years, that could be an individual’s entire working career. How could they expect to retire under those circumstances?
You need to be willing to look at the numbers to understand, Tron.
It would be a terrible thing if stocks were to remain a poor value for another 10 years. Let’s all hope that that doesn’t happen!
But if it does, OF COURSE you want to stay far away from the horrible long-term value proposition.
If you can get a better deal from asset classes that involve far less risk, why the heck would you want to go with the high-risk/low-return choice? I mean no personal offense, Tron, but that makes precisely zero sense.
I will ALWAYS go for the stronger long-term value proposition. I am not even able to imagine a scenario in which I would want to play it the other way.
Go with stocks when stocks offer a better long-term value proposition and go with non-stocks when non-stocks offer a better long-term value proposition.
That’s what makes sense in my sincere assessment, in any event.
Rob
You seem to attack even those trying to understand your ideas, such as myself, as buy and holders.
If you believe that it makes sense to ignore price just because prices have remained bad for some specified length of time, you have indeed been influenced by Buy-and-Hold ideas, Tron. The core idea of Buy-and-Hold is that it is not necessary to change your stock allocation in response to big price swings.
Rob
How could they expect to retire under those circumstances?
Obtaining a higher return while taking on diminished risk ALWAYS helps your odds of being able to retire, Tron.
Obtaining a higher return at diminished risk can NEVER be a negative. It’s a logical impossibility.
Do you understand that valuations affect long-term returns? That was Shiller’s “revolutionary” (his word) finding.
Shiller won the Noble prize last week.
Rob
Rob, on March 2, 2009, P/E10 hit a value of 12. A screaming buy.
In the past, you’ve said you were targeting a P/E10 value of 15 and might pull the trigger sooner. In October 2008, at a P/E10 value of 16, I would have expected you to make your move.
You say you have no regrets, but I’m sure your credibility would have had a bit of a boost had you followed your own advice.
You also say that you sold your stocks in 1996 due to valuation concerns. Did you not have those same concerns with TIPS in the last few years? Surely the negative real yield of TIPS caused some valuation concerns.
I’m sympathetic to the idea of value-based timing. I’ve been doing it myself for many years. But if you want your particular spin to gain acceptance, you might consider practicing what you preach.
Stocks offer a very strong long-term value proposition when the P/E10 value is 12, Wab. We certainly agree re that one.
The rest of your post does not make sense to me.
Credibility problem? Are you joking?
I believe you were posting at the Early Retirement Forum when I was warning people about the errors in FIRECalc. This was YEARS before the Wall Street Journal published its article pointing out those errors. You did nothing when the Greaney Goons imposed a Ban on Honest Posting at that board. I think it would be fair to say that the 11-year cover-up of the errors in the Old School SWR studies is the biggest act of financial fraud in U.S. history. You were part of that criminal enterprise, Wab. I spoke out in OPPOSITION to it. I think it would be fair to say that I will not be the one going to prison here. I think it would be fair to say that I am not the one with the credibility problem here.
It would have made perfect sense for me to have bought stocks when the P/E10 dropped to 15 or even sooner than that.Again, we agree 100 percent re that one.
But where did you get the idea that I do not practice what I preach?
Do you believe that the P/E10 will not be returning to 15 and then going a lot lower? If you believe that, you believe something that has never once happened in the history of the U.S. market.
I WILL practice what I preach. I will of course buy when stocks again offer a strong long-term value proposition. That value proposition will not be available for a year or two. It will be available for five years or more, perhaps for ten years. You sound like some salesman saying that I better ACT QUICKLY or the deal will no longer be available. It doesn’t work that way for people who follow research-based strategies, my old friend.
No, I have zero problems with the valuation of TIPS. I own my TIPS because they provide a 3.5 percent real return every year. I can assure you that I get paid exactly what it says I will get paid on the certificate.
You did indeed speak in support of the idea of value-based timing at the Early Retirement Forum, Wab. That was a plus, But like so many others, you lived in fear of what Bill Sholar and John Greaney would do to you if you posted HONESTLY. You should have posted honestly. Now both Sholar and Greaney and many of their Goon Squad friends are on their way to prison. My sense is that you consider these people friends, as I do. I worked up the courage to post honestly about the need for corrections in FIRECalc and in the Greaney study. You did not. I think it is fair to say that that is why you feel bad about things today.
I am STILL trying to help. I am STILL working to keep those prison sentences as short as they can be.
And I think it would be fair to say that you are still hiding under the bedcovers.
Fair enough, my old friend?
Rob
Hi, Rob.
If you really want to preach the gospel of value-based timing, you should understand that it applies to all asset classes — not just stocks.
I sold my “spare” real estate in 2006. I sold my TIPS last year.
It’s true that your TIPS still pay a reasonable yield based on your original purchase price. The same could be said of stocks in terms of dividends and earnings yield compared to your original purchase price. I.e., you’re using a buy-and-hold rationale.
If by “hiding under the bedcovers,” you mean that I no longer spin my wheels on the internet, you are correct. I’ve found other pursuits that I enjoy more.
Good luck, old friend.
If you really want to preach the gospel of value-based timing, you should understand that it applies to all asset classes — not just stocks.
It DOESN’T apply to all asset classes, Wab. Or at least it doesn’t need to.
It’s been a long time since we posted together. So I don’t have clear recollection of everything. But my vague recollection is that you are a sophisticated investor.
There is not a thing wrong with that. It’s a good thing to be. If you do things right (and my sense is that you are entirely capable of pulling this off), you will do BETTER than Valuation-Informed Indexers. Which means that you will do better than me.
But please understand that I am not trying to do what you are trying to do.
VII replaces Buy-and-Hold. BH is not for sophisticated investors. It is a “good enough” approach for average people that want a smart and simple and safe strategy. VII is just intended to be a smart and simple and safe strategy that actually works in the real world. It is the new Buy-and-Hold.
For return, I invest in broad indexes. The return there is plenty good enough, so long as I take valuations into consideration when setting my allocation.
TIPS and IBonds are for money that I cannot put into stocks because prices are out of control.
If I get the 3.5 percent return from my TIPS, they have served their purpose.
I do NOT need to worry about trading into or out of TIPS or any such thing. It is 100 percent unnecessary to achieve my purpose. In fact, it would DETRACT from my purpose to do that sort of thing. It would make VII a more complicated approach than Buy-and-Hold. I obviously don’t want that.
It’s fine for YOU to trade in and out. You are seeking different goals. It is not necessary for me to do so.
Anyway, that’s my sincere belief re this one.
Rob
If by “hiding under the bedcovers,” you mean that I no longer spin my wheels on the internet, you are correct. I’ve found other pursuits that I enjoy more.
I’ll explain what I meant, Wab.
Please understand that I do not mean to direct these comments particularly at you. You did what lots of people did. I am expressing something that I feel very deeply when I use those words. And it sounds like I am taking a dig at you. But that is not really my intent. My intent is to express amazement at a phenomenon that I have seen play out with many different people at many different times.
It is a horrible, horrible thing to get a number wrong in a retirement study or in a retirement calculator.
If I learned that I had done such a thing, I would be greatly embarrassed. I would IMMEDIATELY fix the error. I would apologize to the people whose lives I had destroyed. I would thank the person who brought the error to my attention for saving me further embarrassment.
That is obviously not the way in which either Greaney or Sholar reacted.
I was stunned and amazed at how they reacted.
I was also stunned and amazed at how YOU (and many others, to be sure) reacted.
I think of Greaney as a friend. I think of Sholar as a friend. I think of you as a friend. I think of those many others as friends.
I have learned things from you all. I have had laughs with you. I have had good times with you all. I have been through lots of experiences with you all. That to me equates to thinking of you as friends.
I do not like to see my friends go to prison. The thought is horrifying to me.
Greaney and Sholar (and those who have posted in “defense” of them) have been engaged in a massive act of financial fraud for many years now. They know that their study and calculator get the numbers wildly wrong. They know that people have used the study and calculator to plan retirements. And they have both engaged in a massive cover-up to keep people from finding out about the errors. That’s an act of financial fraud that makes anything that Bernie Madoff did look tiny and insignificant in comparison.
So I think it is fair to say that a good number of my friends from the old days will be going to prison following the next crash.
I HATE that. Hate it, hate it, hate it, hate it, hate it.
So I naturally spoke up against the cover up. And I naturally asked all my friends to ALSO speak up and to get John’s and Bill’s lives back on track.
I was scared too. I knew precisely how ruthlessly vicious the Greaney Goons were from my dealings with them at Motley Fool. I know that Bill was scared. And I presume that that’s your story too.
I do not understand how you could continue posting at a board that had become a corrupt enterprise.If you didn’t feel safe speaking out, I feel that you should have moved on then.
The phrase was intended to be a reference to your lack of courage. I think that’s a big part of this story. People are scared to death of Mel Linduaer and John Greaney and for perfectly good reasons. But I don’t get it why they don’t see that Lindauer and Greaney lose all their power to intimidate us once we agree to join together in protecting ourselves from them.
If I had agreed to post dishonestly, I could not have lived with myself. That’s me. There’s no requirement that you be me. But I cannot understand how you can do what you did instead. I am simply making that point, getting that out on the table, getting that out in the open.
Your comment that you moved on suggests that things got even worse after the ban. I cannot say that I am surprised. When the good guys reveal that they don’t care about a board, the bad guys take over and it dies. How could it go any other way?
It’s good talking to you again after being out of touch for a number of years. I do think of you as a friend, Wab. I naturally wish you all the best of luck with whatever investing strategies you elect to pursue.
Sometime in 2014 I plan to start a discussion board at this site. I am looking for 10 people who will commit to putting up one post every day during the launching stage of the board. If you are interested in being part of that, please let me know. I would love to have you with us.
Take care, man.
Rob
Simple is good, and you can’t get more simple than buy-and-hold.
Considering value for all asset classes is a relatively simple matter. Most approaches are rooted in comparing price multiples to historical averages.
Larry Swedroe has published simple timing heuristics for TIPS.
I don’t trade in and out frequently. My ears perk up at valuation extremes (in either direction). The valuation level of TIPS should concern you.
Simple is good, and you can’t get more simple than buy-and-hold.
We couldn’t possibly disagree more, Wab.
Stocks were priced at three times fair value in 2000. Every bull/bear cycle ends with stocks priced at one-half of fair value.
That means that everyone who is familiar with the peer-reviewed academic research of the past 32 years (the research that the Wall Street Con Men would prefer we not know about) knew that the Buy-and-Holders were going to lose five-sixths of their accumulated savings of a lifetime.
That’s simple?
That means taking your kids out of college. That means ending up on the street when you hoped to be enjoying a safe retirement. That means giving up your plans to start your own business. That means giving up your plans to move into a bigger house. That means giving up vacations for many, many years.
Simple?
Losing five-sixths of one’s accumulated life savings is one of the most emotionally complicated things that can ever happen to a person.
They don’t tell that part of the story in the pretty marketing brochures, eh?
Losing all your money is not simple.
I don’t buy it.
Not even a tiny bit.
The Buy-and-Holders had the right idea. I believe that they got wildly off track when they learned that the market is not efficient and failed to make the corrections in their strategy needed for it to have anything more than a zero chance of working in the real world given the new (in 1982!) findings.
That’s my sincere take, in any event.
Rob
Larry Swedroe has published simple timing heuristics for TIPS.
And Larry is afraid to post honestly as the Bogleheads Forum.
He tried it and Mel Linduaer gave him the boot and he came crying back begging forgiveness and promising never to get on Mel’s bad side again.
Can we really trust anything Larry says?
I like the guy. He’s plenty smart. I have learned things from him.
But can I trust him? I cannot.
So I am not impressed by your mention of the “Larry Swedroe” name.
Investors need honesty, Wab. That comes first. You give up your personal integrity and you give up any chance that you can make a positive difference. If you cannot stand up to a Mel Lindauer or a John Greaney or a Bll Sholar, you need to find another line of work.
Those are my sincere thoughts, in any event.
Rob
The valuation level of TIPS should concern you.
No, it shouldn’t, Wab.
I am the co-author (with Wade Pfau) of research that was published in a peer-reviewed journal that shows that Valuation-Informed Indexing reduces the risk of stock investing by 70 percent while dramatically increasing returns. And you are telling me to mess that up by saying that investors need to shift in and out of their non-stock asset classes every time the wind blows in a certain direction? No, thanks.
I get the 3.5 percent real promised me on the certificate every year.
That beats stocks when they are selling at today’s prices, right? Beating stocks selling at today’s prices is what I need to do.
After the next crash, stocks will be selling at prices that promise an annualized ten-year return of 15 percent real. There was a fellow at FinCon13 who told me that that would permit me to quadruple my money in 10 years. Is that so, in your assessment?
Sometimes it is more important to FOCUS on the stuff that matters than to get every last detail perfectly right.
VII is a strategy built for HUMANS.
It is TRULY simple.
And it actually works in the real world. Which puts it miles ahead of Buy-and-Hold.
You show me a strategy that offers returns anywhere even roughly in the neighborhood of the returns provided by VII and that is as safe as VII and as simple as VII and you will get my attention.
I have better things to do with my time than to worry about TIPS yields. If I couldn’t beat Buy-and-Hold by a country mile without doing that, I might give the idea some consideration. But you are talking petty stuff while ignoring the elephant in the living room. The last 32 years of research shows that investors who don’t change their allocations in response to big price swings don’t stand a chance of long-term success. Those who do can’t mess up even if they try. The research shows that stock valuations are 80 percent of what matters to investing success. I focus on what matters.
Again, I don’t have a problem with your decision to get out of TIPS. It’s your money. You need to make that call.
But all that in and out stuff is not for me. I’ve got what I’m looking for — a simple, safe, smart strategy that works in the real world. That’s investor heaven, so far as I’m concerned.
I wish you all good things.
Rob
Let’s revisit the premise of your “they got the number wrong” theory. We all agree that most of the SWR numbers simply provide an accurate report of what worked historically. The perhaps incorrect assumption some people make is that what worked historically will continue to work in the future.
But we know that a bad sequence of returns can lower that SWR number, as it did in Japan, for example. And we agree that the likelihood of a bad returns sequence goes up with high starting valuations, right?
The returns are a function of both stock returns and bond returns. Bond valuations matter, and today bond valuations are at a historic high (i.e., yields are at a historic low). That includes TIPS.
So, while it’s true that your bonds will continue to pay the same coupon till maturity, a buyer of those same bonds today will not get the same yield you got when your purchased them circa 1998.
The same holds true for stocks. Somebody who bought cheaply and held through periods of high volatility should do fine.
The core issue is buying at high valuations — whatever the asset class. Me? I sell at high valuations. Your TIPS today are more over-valued (on a historical basis) than stocks were in 1996.
I’ll be happy to be one of the 10 posters for your new board, Rob. So long as you promise me that you won’t censor my comments, of course.
I agree with all the points you made, Dab. I like the way you set things up because all the links in the logic chain are evident and it appears to me that they are strong.
However, I don’t see how I can be hurt with the TIPS. Stocks are my growth asset class. When stocks are paying an annualized return of 15 percent real, I sell the TIPS and buy stocks and all is well.
I am not buying the TIPS for growth. I am buying them to have a place to keep the money safe until stocks offer a strong long-term value proposition again. The reason why I am saying that valuations play a different role with stocks and with TIPS is that overvalued stocks don’t provide the growth I need but I am not seeking growth from TIPs, so it doesn’t matter.
I don’t think of TIPS as “bonds” in the way that people usually use that term — bonds are thought of as an alternative to stocks. I think of TIPS as “Super Cash” — they have the safety of cash but are inflation-adjusted.
For me, TIPS serve a different purpose than stocks. Stocks are for growth (thus, I need to be sure that the growth will appear). TIPS are for safety (thus, current-day valuations are not of any great importance).
Again, I do think that an investor could do better by getting all these things precisely right. But I don’t see it as being at all necessary to worry about the valuation level of TIPS.
Are you saying that I won’t be able to sell the TIPS and thus will not be able to convert the money into stocks?
That scenario seems exceedingly far-fetched to me.
If I can sell the TIPS and convert the money into stocks, how am I hurt?
Your argument makes sense. But I think you are leaving out of consideration the reality that the stocks and the TIPS serve different purposes.
Also, I am skeptical re the point made in the sentence “Your TIPS today are more overvalued (on an historical basis) that stocks were in 1996.” TIPS have been around a very short time. So it is possible that they are the most overvalued that they have ever been in their short history and that that doesn’t mean much. Stocks were in 1996 selling at valuation levels that in the past had always brought on an economic crisis. The two situations don’t seem even remotely comparable to me. Any overvaluation present in TIPS today is certainly not going to cause an economic crisis.
Rob
Let’s revisit the premise of your “they got the number wrong” theory. We all agree that most of the SWR numbers simply provide an accurate report of what worked historically. The perhaps incorrect assumption some people make is that what worked historically will continue to work in the future.
Do you think that Greaney’s retirement study and Sholar’s FIRECalc should have been corrected within 24 hours of the time the errors in them were brought to their attention?
Or do you not?
Is the purpose of a retirement study or a retirement calculator to help people plan their retirements effectively?
Or is it to trick people?
Do you really believe that the word “perhaps” belongs in the last sentence quoted above?
Do you think that the Wall Street Journal is part of some vast conspiracy to make John Greaney and Bill Sholar feel bad? And the Economist magazine? And Smart Money? And Academic Researcher Wade Pfau? And Bill Bernstein?
Why don’t you state things clearly?
What do you think will happen to you if you simply state what you obviously believe with clarity?
Did your confidence in Greaney’s study grow when he threatened to kill my wife and children if I continued to “cross” him by posting honestly on the SWR topic?
Do you believe that the people whose retirements fail because they believed that Sholar was shooting straight with his calculator should be compensated for their losses by him?
If not, why not?
Do you think Sholar’s decision to ban honest posting on the errors in his calculator was an act of financial fraud?
Do you think the financial losses caused by Greaney and Sholar were greater or lesser than the financial losses caused by Bernie Madoff, who resides in a prison cell today?
Do you believe that people of the stature of John Bogle and Bill Bernstein and Larry Swedroe should be permitting their names to be associated with a discussion board that banned honest posting on safe withdrawal rates as its first order of business?
Do you not agree that these people are lending support to a criminal enterprise by doing this?
Are you proud of your own behavior re the 11-year cover-up of the errors in the studies? Or at you ashamed of it?
Rob
There’s one more series of questions that should have been included in that list.
Academic Researcher Wade Pfau (he has a Ph.D. in Economics from Princeton) and I co-authored research that has been published in a peer-reviewed journal showing millions of middle-class investors how to reduce the risk of stock investing by 70 percent.
I think it would be fair to say that widespread promotion of that research paper would bring the economic crisis to an end. This is the biggest advance in our understanding of how stock investing works in 30 years. That research shows investors how to become able to retire five to ten years sooner than they ever imagined possible. Millions are in dire need of such exciting advances today.
The response of the Lindaurheads and the Greaney Goons was to threaten Wade. They told him that they would send defamatory e-mails to his employer in an effort to get him fired from his job in the event that he continued to post honestly on his sincere views as to how stock investing works.
How long do you think the prison sentences should be for those who have put up posts in “defense” of Mel Linduaer and John Greaney?
How long do you believe your own prison sentence should be, given the implicit support you have offered these individuals by participating at boards at which they were present while not speaking up in opposition to their brutally abusive tactics for keeping millions of middle-class people from learning what the last 32 years of peer-reviewed academic research tells us about how stock investing works?
Rob
I’ll be happy to be one of the 10 posters for your new board, Rob. So long as you promise me that you won’t censor my comments, of course.
I’d be thrilled to have you as one of the 10, Sensible.
If you have an interest in putting forward the pro-Buy-and-Hold perspective, that would be a huge plus.
That said, my tolerance for Goon stuff will be MUCH less at the board than it is here at the blog.
Rob
I have no idea what “Super Cash” is. TIPS are bonds. They have a value that is determined by the market just like stocks.
And just like stocks, the “danger” is that the price you can sell them for in the future may be less than the price you can sell them for today. There is also reinvestment risk and perhaps even default risk, but I’m only talking about valuation/price risk here.
Of course, you don’t have to sell them. You can continue to hold them and collect the interest, just as you don’t need to sell stocks during downturns — you can hold them and continue to collect dividends and continue to own a share of their economic power.
The assumption of most retirement models is that you eventually need to sell an asset to pay your bills. To me, it makes sense to sell those assets when the price is high.
For most people, bonds are also valued for reducing portfolio volatility, so the idea of trading them for a high-volatility asset as you’re describing won’t appeal to most humans. As I’m sure you know, as you get older, liquidity and income stability become more important than portfolio growth, which is why Bogle recommends “your age in bonds”.
Swedroe’s switching heuristic includes the idea of buying short-duration bonds rather than TIPS during times of high TIPS valuation. The premise is that short-duration bonds respond quickly to inflation, so they can be a proxy for inflation-protected bonds.
I have no idea what “Super Cash” is. TIPS are bonds. They have a value that is determined by the market just like stocks.
I don’t believe you, Wab. You may not agree. But you certainly get the idea.
TIPS do everything cash does, plus more.
There’s no need to own them for the purposes for which people own bonds. As a cash substitute, TIPS are an amazing asset class.
Who cares if they have a value that is determined by the market if you are not using them for that purpose?
They have it. But it matters not to the people who buy them for other reasons.
I am getting a funny feeling that you are bringing up this trivial point because you don’t want to discuss your involvement in the biggest act of financial fraud yet seen in U.S. history.
Why haven’t you responded to the many questions that I have put forward that are each at least 500 times more important than the matter you keep bringing up?
Rob
the “danger” is that the price you can sell them for in the future may be less than the price you can sell them for today.
I am so frightened. I don’t think I will be able to sleep tonight.
When I have to sell those TIPS to obtain stocks paying me 15 percent real for 10 years running, might it be that I will not get the full price for them I was hoping for?
Rob Bennett, Man of Danger — that’s me!
Rob
There is also reinvestment risk and perhaps even default risk, but I’m only talking about valuation/price risk here.
The world is full of risk.
There might be dynamite planted in your car that will explode when you turn the ignition.
You might find one of the Lindauerheads or Greaney Goons showing up at a discussion board you built.
Anything can happen — and probably will!
Rob
To me, it makes sense to sell those assets when the price is high.?
To me it makes sense to sell the TIPS that I purchased to convert into stocks when stocks were selling at reasonable prices when stocks are selling at reasonable prices.
Call me madcap.
Rob
For most people, bonds are also valued for reducing portfolio volatility, so the idea of trading them for a high-volatility asset as you’re describing won’t appeal to most humans.
I have a funny feeling that you still have no idea what Super Cash is.
Or at least you still see some benefit to pretending that you don’t.
Oh, my!
Rob
As I’m sure you know, as you get older, liquidity and income stability become more important than portfolio growth, which is why Bogle recommends “your age in bonds”.
Bogle is the expert on these matters.
That’s why the Vanguard Diehards board was shut down and replaced by the Bogleheads Forum on the day I announced that I would be attending the next annual meeting and would be asking my friend Jack a few questions about safe withdrawal rates and the last 32 years of peer-reviewed academic research published in this field.
Makes sense!
Rob
Swedroe’s switching heuristic includes the idea of buying short-duration bonds rather than TIPS during times of high TIPS valuation. The premise is that short-duration bonds respond quickly to inflation, so they can be a proxy for inflation-protected bonds.
Please tell me more about Swedroe’s switching heuristic. I don’t have a switching heuristic of my own. Do you think that Larry might be willing to let me borrow his for a little bit?
Rob
The prison sentences grow longer with each day that the Ban on Honest Posting remains in place, Wab.
That goes for you as well as for your Goon friends.
Think it over, old buddy.
And please take good care.
Rob
Hi, Rob.
Who cares if they have a value that is determined by the market if you are not using them for that purpose?
That’s a perfectly valid point. You can safely ignore the market value of assets if you have no need to sell them. Of course, the same applies to stocks, which is the basic foundation of buy-and-hold investing.
Why haven’t you responded to the many questions that I have put forward that are each at least 500 times more important than the matter you keep bringing up?
Because I’ve dealt with the mentally ill before, and I’ve found that they can sometimes be reasonable if gently redirected.
Rob, take this as friendly advice — your condition can be managed with meds. You’re a smart and articulate guy, and you could be making valuable contributions to this discussion.
Okay, Wab.
Rob
Everyone else is wrong and you are the only one right, Rob.
Yep, that makes sense.
It’s the other way around, Anonymous.
Every single poster at every blog and every discussion board had to click the “I Accept” button before being permitted to post. That’s true even of the Lindaurheads and the Greaney Goons.
That’s why you are going to prison following the next price crash. We adopted those rules to PROTECT ourselves from these tactics. We are UNANIMOUS in our opposition to those tactics.
On the substantive issues, OF COURSE everyone at one time had it wrong. Doesn’t it work that way with every advance achieved in every field of human endeavor? You can’t move forward if you already know it all. We all had it wrong until we learned new things that took us forward. That’s great news.
And please remember that I was a Buy-and-Holder myself until the night of August 27, 2002. That’s the night that John Greaney threatened to kill my wife and children if I continued to “cross” him by posting honestly on safe withdrawal rates. When I saw 200 Buy-and-Holders endorse that post, I knew that Buy-and-Hold was the most emotional investing strategy ever concocted by the human mind and that I wanted absolutely nothing to do with it.
I became the most severe critic of Buy-and-Hold alive on Planet Earth for precisely the same reason why a few years earlier I became a Buy-and-Holder. I believe that it makes sense to root one’s strategies in the peer-reviewed academic research. I think excessively emotional strategies end up hurting us in the end, no matter how much short-term appeal they might possess.
My best wishes to you.
Rob
Rob,
The only threats I have seen have all come from you.
I’m a meanie, Anonymous.
Everyone knows it too.
That’s the thing.
Rob