Set forth below is the text of a comment that I recently put to another blog entry at this site:
we can clearly look at the Internet and see that all those opinions are out there, including yours.
I am not aware of a single case in which the advocates of any other investing strategy behaved in the manner in which I have seen Buy-and-Holders behave for 11 years now. Never have I seen a non-Buy-and-Holder make use of death threats or board bannings or tens of thousands of acts of defamation or threats to get academic researchers fired from their jobs.
These are criminal acts, when employed as part of an 11-year cover-up of errors made in retirement studies. That’s why only Buy-and-Hold advocates will be going to prison following the next price crash and not the advocates of any other investing strategy.
The Buy-and-Holders are in a unique position. The claim that it is not necessary for investors to consider price is of course 100 percent absurd. THere has of course never been even a tiny sliver of support for this absurd claim anywhere in the peer-reviewed academic research. Wade Pfau, who holds a Ph.D. in Economics from Princeton searched the literature and confirmed that this is so. Just to be 100 percent sure, he went to the Bogleheads Forum and asked if anyone there knew of a single study that supported the Buy-and-Hold “strategy.” John Bogle was not able to come up with anything. Neither was Bill Bernstein.Neither was Larry Swedroe. Neither was Rick Ferri.
That’s because there is no such study. The claim that there is is a lie. It is a lie that has put hundreds of billions of dollars in the pockets of the Wall Street Con Men. But it is also a lie that has put millions of middle-class people out of work.
Those who committed felonies in support of that lie will go to prison as a result. What else would you expect?
What makes Buy-and-Hold different is that it is one of only two investing strategies (Valuation-Informed Indexing is the other one) that claim to be rooted in peer-reviewed academic research. Millions of middle-class Americans like the idea of basing their investment decisions on the findings of peer-reviewed academic research. The problem, of course, is that there is zero support in the academic literature for a pure Get Rich Quick approach. To make the claim that there is research supporting a pure Get Rich Quick approach, you HAVE to lie. There is no honest research-based claim that can be made in support of pure Get Rich Quick strategies. This is why Valuation-Informed Indexing is viewed by Buy-and-Holders with such alarm. Valuation-Informed Indexing is the first TRUE research-based strategy.
For Buy-and-Hold to survive, Buy-and-Holders MUST engage in criminal acts. Otherwise, there are going to be thousands of people telling the truth about what the academic research says. But those criminal acts will lead to prison sentences following the next price crash. People do not take kindly to seeing their retirement accounts destroyed by the tactics employed by the sorts of individuals who have posted in “defense” of Mel Linduaer an John Greaney.
For obvious reasons.
Rob,the Fellow Who Believes That the “Experts” in This Field Should Be Telling the Truth About Stock Investing to the Millions of Middle-Class People Who Need to Know It (Or at a Very Bare Minimum Permitting Others to Tell the Truth)
Rob,
Repeating the same thing over and over again won’t make them true. If you allegations of criminal wrongdoing were true, charges would have been filed by now.
Mel and John have contributed greatly to the investment community and you continue to be the “boil on the ass”.
I am a boil on the ass of people trying to work a con, Pink. I think that much is certainly fair to say.
Criminal charges have not yet been brought because millions of middle-class people bought into the smelly Get Rich Quick garbage. We all have a temptation to follow GRQ strategies within us. Buy-and-Hold is the investing strategy that exploits that human weakness to the fullest extent possible (by saying that there is research supporting the pure GRQ approach).
Do you seriously think that the millions of people who will be losing their life savings as a result of the reckless and relentless and ruthless promotion of this GRQ garbage are going to continue to “defend” it following the next crash?
I don’t see it, Pink.
You’re entitled to your opinion. You’re entitled to stake your life on that opinion if you care to do so.
You’ll do it without me. I do not care to do so. Please try to find someone else.
I naturally wish you all the best things that this life has to offer a person.
Rob
No, Rob, you are simply a boil on the ass……period. The only thing that is a get rich quick scheme is market timing.
The only thing that is a get rich quick scheme is market timing.
This from the same fellow who a few minutes ago said:
“Repeating the same thing over and over again won’t make them true.”
Um…
Rob
Rob,
Then maybe you can take it up with people like this:
http://rorfinance.com/why-market-timing-is-dangerous/
In fact, you can see countless articles on the dangers of market timing.
I am just not interested in the smelly garbage you are trying to sell.
It took me all of five seconds to figure out that the words at that page constitute a warning not against timing of all types but ONLY a warning not to engage in SHORT-TERM timing.
Short-term timing NEVER works. The Buy-and-Holders discovered that. It is the second most important insight ever discovered in the entire history of our efforts to learn how stock investing works.
Long-term timing ALWAYS works and is 100 percent REQUIRED for any investor hoping to have any change whatsoever of long-term investing success. The Valuation-Informed Indexers discovered that. It is the first most important insight ever discovered in the entire history of our efforts to learn how stock investing works.
Engage in both forms of timing and you are doomed.
Avoid both forms of timing and you are doomed.
That’s what the research shows, Pink.
I wish you well.
Rob
I am just not interested in the smelly garbage you are trying to sell.
Actions speak louder than words, Pink.
If you believed what you are saying on a deep level, you never would have advanced a single death threat or a single demand for a single unjustified board banning or a single act of defamation or a single threat to get a single academic researcher fired from a single job.
The reason why the findings of the past 32 years of peer-reviewed academic research in this field cause you such pain is that you have common sense and your common senses tells you that price MUST matter when buying stocks just as it does when buying anything else.
It is the people pumping Buy-and-Hold that caused you to experience such emotional pain, not me, Pink. I am the one showing you the way out of the hellhole that you today find yourself in today.
My best wishes.
Rob
Rob,
I know you are in pain due to your precarious financial condition and are trying to justify your actions as well as your anger. Many of us have tried to help you so that you could be living financial free like us, but you have failed to do so. Sorry, but you just can drag me down with your failings.
The hellhole you eat of is yours and you are living in it every day. Just look at your drastic postings over the last 11 years. The proof is right there.
That makes sense, Pink.
Rob
Why don’t your Value Walk columns ever mention the Buy and Hold Mafia, death threats or prison terms? Where was your FinCon PowerPoint slide on those topics? If these things are important enough to document here (over and over) then why not there?
Thanks for asking an intelligent question, X.
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 by a very wide margin.
They should be writing about this on the front page of the New York Times EVERY DAY.
They are not doing that.
The fact that they are not doing that makes people suspicious when I talk about financial fraud or prison sentences or the Buy-and-Hold Mafia or anything along those lines. I had a guy come up to me at FInCon13 and tell me: “I’ve checked out your site numerous times. I heard you talking about something called ‘The Buy-and-Hold Mafia.’ I figured that I must have missed out on some background.”
That fellow would be more likely to subscribe to my blog if I did NOT refer to this sort of thing. It is a turn-off. It sounds sensational and fantastic and unbelievable.
Do you remember what Rob Arnott told me? He said that I am right on all matters of substance. But he also said that I am too harsh in the way that I describe things. And do you remember that guy who is going to teach Valuation-Informed Indexing in his courses at George Washington University? He said that my stuff was super and that he was glad that he stuck with it long enough to see that. But he also said that he believed that lots of others would take one look at the amazing claims and check out. And he is of course right about that.
You are not 100 percent correct to say that I don’t make any reference to this side of things in my column at Value Walk or in my FinCon slides. I quoted the fellow at GW in my FinCon slides. I worked the issue into the presentation. I often make reference to the cover-up of the errors in the Old School SWR studies in my Value Walk column. I don’t usually use the phrase “financial fraud” or refer to prison terms. But it doesn’t take a whole big bunch of I.Q. points to know that covering up errors in a retirement study is an act of financial fraud, does it? And it doesn’t take a whole big bunch of I.Q. points to know that committing multiple acts of financial fraud over an 11-year time-period lands people in prison cells, does it?
The issues we are dealing with here are EMOTIONAL in nature.
That’s what makes discussion of these issues so STRANGE.
The people who advocate Buy-and-Hold follow it themselves. We usually don’t think of people who advocate strategies that they follow themselves as being involved in acts of financial fraud. If they follow it, they believe in it. If they believe in it, there’s no fraud. Right?
To a large extent, that really is so.
The vast majority of people who today advocate Buy-and-Hold are not guilty of financial fraud. They are telling people what they truly believe. They are wrong. But there’s no fraud involved in being wrong. They just made a mistake.
It becomes fraud only when you put forward death threats or demands for unjustified board bannings or tens of thousands of acts of defamation or threats to get academic researchers fired from their jobs.
We learned that Buy-and-Hold cannot work in the long term in 1981. That’s when Shiller published his “revolutionary” (his word) research.
Then we had a huge bull market. Millions of people gave the credit for their (temporary) gains to Buy-and-Hold. So Buy-and-Hold became very popular. Buy-and-Hold had nothing to do with those gains. The early gains were caused by the low stock prices that applied in the early 1980s. The later gains (those from 1996 through 1999) were imaginary and temporary. All the same, millions of people sincerely believed that it was by following Buy-and-Hold strategies that they achieved those gains. Those people were wrong to give credit to Buy-and-Hold. But they were not committing criminal acts.
Lots of people who work in this field have had serious doubts about Buy-and-Hold for a long, long time. Those people learned to keep their mouths shut. They learned that it is career suicide in this field to talk openly about the implications of Shiller’s findings. They kept it zipped.
Then I came along. I have no background in this field. I had no idea that it was career suicide to talk honestly about the last 32 years of peer-reviewed academic research. I just came along saying “dum de dum dum” and then spilled the beans while having no idea that that was what I was doing.
I am a product of the internet, X. There was no internet in the early years of this secret. By the time I came along, the cover-up had been going for for many years. I didn’t know there was a cover-up! I just told the truth because that’s what people do in every field of human endeavor other than stock investing. The joke was on me, eh?
The Wall Street Con Men cannot keep this secret in the internet age. It’s impossible! They have to figure out some way to come clean.
I am trying to help them. I am saying that the core problem is cognitive dissonance and that the Buy-and-Hold Pioneers helped us in a huge way by building the framework on which I built the Valuation-Informed Indexing Model and all this sort of thing. I am the best thing that ever happened to these people. BUT THEY CANNOT BEAR TO SEE THE WORD GET OUT THAT THEY HAVE BEEN COVERING UP WHAT THE ACADEMIC RESEARCH HAS BEEN SAYING FOR 32 YEARS. Their first reaction is always to destroy that Rob Bennett fellow.
As if that was going to solve their problem! Rob Bennett is not their problem! Their problem is the 32 years of peer-reviewed academic research that Rob Bennett is forever citing in his writings. THEY NEED TO COME CLEAN. Not just to help out the millions of middle-class investors whose lives have been destroyed by the relentless promotion of Buy-and-Hold “strategies.” They need to come clean to help THEMSELVES. But they just cannot bear to come clean, you know? This “idea” that it is not necessary to consider price when buying stocks has caused more human misery than any earlier idea in the history of personal finance. They are ashamed and they are in cover-up mode. They know that they need to come clean but they cannot bear to do it.
I don’t talk about the prison sentences and all that sort of thing in most articles that I write that do not appear at this site because people hate to hear about that stuff, X. They hate it, hate it, hate it, hate it, hate it. Nothing could be more clear from my 11 years of work in this field.
Why do they hate it? Because they are complicit. Bogle doesn’t promote the pure Get Rich Quick approach for his health. He promotes it because it brings the bucks in the door. There has never been an idea in the history of Planet Earth that has been responsible for taking so many dollars out of the pockets of middle-class people and putting them into the pockets of a small number of Wall Street Con Men. Buy-and-Hold has been a BONANZA for Wall Street. If only it hadn’t caused losses so devastating to millions of middle-class people as to bring on the biggest economic crisis in our history.
I don’t talk about the prison sentences at other places because it is not a winning issue for me. I would like to see everyone talking about them. The sooner we turn our attention to the prison sentences, the sooner we bring this economic crisis to an end and bring on the greatest economic boom in our history. I would LOVE it if the New York Times would write about the prison sentences and we could all just move on. But I do not control the New York Times. It does not serve my purpose of spreading the word about how stock investing really works to talk about the prison sentences at other places. So I generally do not do that.
Why do I talk about them here? Because they are an important part of the story!
If I don’t talk about them here, people are going to say after the crash “Oh, don’t you think that you had a responsibility to talk about those prison sentences?” And they would be right. We all have a responsibility to do what we can to get those prison sentences reduced. The goal here is not to see people serve long prison sentences, it is to get the word out about what the last 32 years of peer-reviewed academic research says about what works in stock investing. Do you see?
If one of my fellow bloggers starts writing about the prison sentences, I will be right there with him or her, X. I WANT to get the word out about the prison sentences. Getting those prison sentences announced is part of the process by which we bring the economic crisis to an end and make our way to the other side of The Big Black Mountain.
But this is not a one-man job. I need Bogle talking about the prison sentences. I need the New York Times writing about the prison sentences. I need all my fellow bloggers talking about the prison sentences. That’s how we work together to make good things happen.
I believe we will ALL be talking about the prison sentences following the next price crash. Buy-and-Hold will be an obscene phrase at that time. Nobody will be holding off on their demands that those who have put up posts in “defense” of Mel Lindauer and John Greaney serve long prison sentences for their role in bringing on the biggest economic crisis in U.S. history.
The time is not ripe for that stuff just yet, X. I talk about it here so that there is a record showing that anyone with just a reasonable amount of intelligence could see years in advance that this massive act of financial fraud was leading us all to no place good. But I pull punches in my other writings because most of us are feeling too much emotional pain about what we did to all our friends and neighbors and co-workers because of our reluctance to speak out clearly in opposition to the promotion of Buy-and-Hold “strategies” to feel comfortable talking over the full truth of the matter today.
We are the luckiest generation of investors ever to talk Planet Earth, X. We are the first generation for which stock investing has become virtually a risk-free endeavor. And we have thrown that all away because we couldn’t resist falling for the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind. That hurts. That hurts bad.
My job is to bring on a healing process.
I do that by doing everything in my power to spread the word about all of the important findings of the first 11 years of our discussions.
Yes, we should be talking about the prison sentences as well as all the other stuff.
No, we are not all entirely prepared to go there just yet.
So I have to choose my spots for discussion of that particular matter.
I wish it were not so. But the evidence that it IS so is very, very, very compelling.
We are all trying to break through a wall of emotional resistance. We are making slow progress. That is the bottom line here.
I hope that helps a bit, my future prison-dwelling friend.
Rob
“people hate to hear about that stuff” “not a winning issue for me”
Those are craven political cop-outs. Withholding vital truth when you fear a negative response is dishonest. It makes you complicit in the fraud.
Naturally I wish you well in etc etc
I agree with you to a point, X.
It IS cowardly. We all should be telling complete truth re these matters to the extent we are aware of them.
That said, the circumstances that apply are HIGHLY unusual.
I push on this stuff more than anyone else alive. There is no one in a close second place.
That reality helps me to sleep at night.
I always look for openings. When I see opportunities to tell more truths and to tell them in clearer and bolder and simpler language, I take advantage of them.
I aim to push to the limit of what people can take. And then I ease up a bit, for good or for ill.
My warmest wishes to you and yours.
Rob
Rob,
I onced recommend a buy and hold strategy to my brother-in-law after he asked me for financial advice. We had both had quite a bit to drink that evening. How much prison time am I facing in your estimates?
You’re going to be clapping erasers after the bell rings for a long, long time, Tron.
At least that’s my sincere take re this important matter.
Rob
I hope whatever pleasure you got out of those “few drinks” was worth it to you, Tron!
Rob
Unlike Tron, I’ve recommended buy and hold when completely sober. Market timing is simply a bad approach for the vast majority of individual investors.
There are million of good and smart and hard-working people who believe as you do, Sensible.
I was once one of them.
Don’t let the bad guys get you down, man.
Rob