Set forth below is the text of a comment that the owner of the Joe Taxpayer blog put to a recent blog entry at that site:
Rob is not using my site for anything. I mentioned that we met, and I respect him and his analysis. No more, no less. In person, he’s bright, energetic, and passionate. He talks about his son with the same love as I speak about my daughter. The rest of this back and forth [Joe is referring here to the intimidation posts put forward by the Lindaueheads and the Greaney Goons] is really nonsense.
There are those who swear by gold. I think it’s an ancient relic (only for the fact that Milton Freedman used those words, else, I’d just think it a pretty metal.) There are day traders. I think that’s a losing proposition. It goes on. Some debate these issues like religion. I enjoy a thought provoking conversation with people I respect.
Back and forth means it goes both ways. He is talking about you there, Rob.
No.
You Goons generate ugliness and I object to the ugliness you generate. Those two are not the same thing. To suggest that they are the same thing is to suggest that a policeman is doing unjustified harm to a killer when he places him in handcuffs. It is the policeman’s JOB to protect us from killers.
Joe obviously gets all that. Nothing could be more clear.
The one point I can give you here is that Joe should be speaking out more clearly about which side is causing the problem. You are right to that extent.
That’s of course not true only of Joe. It is true of just about everyone. It is true of Jack Bogle. It is true of Robert Shiller. It was true of Wade Pfau during the 16 months we worked together (and is more true of him today). Heck, it was true of Rob Bennett up until the morning of May 13, 2002.
How do you propose that we solve this problem, Anonymous?
Rob Arnott told me that I need to be less “strident.” He has been addressing this problem in his less strident way for years now. Has the problem been solved? Have the Old School SWR studies been corrected? Have we launched a national debate on Valuation-Informed Indexing? Have we overcome this economic crisis?
What gets the job done? That’s the question here.
PeteyPerson described me as a “teddy bear”-type poster in the days before May 13, 2002. That’s my natural personality. But it didn’t get the job done to be a teddy-bear type poster re the safe-withdrawal-rate issue, did it? So I moved on to something else. No one refers to me as a teddy-bear type poster today.
It takes a tough man to make a tender chicken, Anonymous. That’s the bottom line, whether I like playing the role or not.
We need to fix our broken economy. There are no two sides re that one. We ALL need that. Jack Bogle needs it as much as Rob Bennett. Bill Bernstein needs it as much as Robert Shiller. Larry Swedroe needs it as much as Wade Pfau.
When we are all working together to learn how stock investing really works and to share what we learn with million of middle-class investors, I will be a teddy-bear-type poster once again. Until that happens, I will be Frank Perdue.
Because I have it in for my Buy-and-Hold friends? No. Nothing could be farther from the truth.
My Buy-and-Hold friends are killing themselves. They are killing all the rest of us while they do it, that much is certainly so. But one of most important realities here is that my Buy-and-Hold friends are killing themselves. If they understood what the research says, they would be behaving in a very different way. And the only way they can ever come to understand what the research says is for there to be a free and open discussion, with thousands of people participating.
My job is to get that discussion started. It could have been done on May 13, 2002, without anyone getting hurt in any serious way. Today, getting that discussion started means huge financial liabilities and in some cases even prison sentences for my Buy-and-Hold friends. Following the next price crash, the penalty to be paid will be 20 times higher.
Joe understands this. He is scared, like lots and lots and lots of other good and smart people. He has not been perfect in his behavior. He loves his country and a person who loves his country should be speaking out more firmly and more clearly and more powerfully than Joe has spoken out. All that is fair enough.
But Joe has put his neck on the line to an extent that few others have put their necks on the line. So I feel that I can cut him some slack re his imperfections. And I have a funny feeling that the millions of middle-class people whose lives are in the process of being destroyed will be cutting Joe some slack following the next price crash.
Will those millions of people be in a mood following the next price crash to cut Anonymous any slack? I have my doubts. Very, very grave doubts.
And so it goes, Anonymous. I wish you all good things.
Rob
Once again, your response indicates that you are oblivious to what anyone else says.
Your lack of results are a product of your activities. You would think you would have finally gotten a clue by now.
I wish you the best of luck in all your future endeavors, Anonymous.
Rob
“He has not been perfect in his behavior. He loves his country and a person who loves his country should be speaking out more firmly and more clearly and more powerfully than Joe has spoken out.”
So, since Joe is not doing enough for you, does that mean he is going to prison as well?
Joe has stuck his neck out to save his country. Joe is the last person who will be going to prison.
But he should be doing more.
Say that Joe does not go to prison. But that his country enters the Second Great Depression. Is Joe sitting pretty? He is not.
If we go into the Second Great Depression, we are going to see political unrest. We have already seen a lessening of confidence in our system of government on the right (The Tea Party movement) and on the left (The Occupy Wall Street movement). We will see the political frictions increase ten-fold if we go into the Second Great Depression. Our political system may fall. So Joe may end up not going to prison but not doing at all well either.
Joe tells himself that this is not going to happen. He tells himself “Rob should be able to post at every investing board and blog on the internet, but we will work things out somehow whether he is able to do so or not.” No. That’s not so. If Rob does not feel free to post honestly, Shiller does not feel free to post honestly. If Shiller does not feel free to post honestly, Pfau does not feel free to post honesty. If Pfau does not feel free to post honestly, Bogle does not feel free to post honestly. And on and on and on.
The Ban on Honest Posting is costing us the insights of THOUSANDS of good and smart people. We are as a nation paying a very big price for this nonsense.
Buy-and-Hold caused three economic crises before this one. People look at that and they say “Oh, we’ll survive this one too.” Perhaps. But it was a close call with the Great Depression. We survived. But there was no guaranty. And we are looking this time at a Great Depression that will go twice as deep and last twice as long as the first one. It was a P/E10 value of 33 that caused the Great Depression. We went to 44 this time. We are in entirely uncharted territory.
It’s not a game, Anonymous. There are responsibilities that go with touring yourself as an “expert” on stock investing. One of those responsibilities is that you report numbers accurately. Another is that you acknowledge errors you have made when they are brought to your attention.
I have a patriotic duty to do everything I am able to do to break the Buy-and-Hold Mafia. I have already done just about everything I can think of. I will continue to send 50 e-mails every day. I will continue to write the VII column. I will write guest blog entries from time to time. I will talk to people at FinCon14. I will do all that I can do.
But I am not Superman and this is not a one-man job. If about 10 people join together to bring down the Buy-and-Hold Mafia, we will all live better lives for many years to come. If I don’t find 10 to join together to save their country, then we all go down. I don’t want to see it. It makes me want to cry to think about it. But it is what it is, you know? There are lines I cannot cross without becoming a Goon myself. I cam not going to cross those lines. So I will continue doing what I have done for 12 years now, probably not too much more and certainly not any less.
That’s the story.
Joe is not going to prison. But Joe may see an economic and political system that he loves collapse. Millions of others may see that happen. And all this is taking place at a time when we have finally put all the pieces together and discovered how stock investing really works. We are the luckiest generation of investors who ever walked Planet Earth. My good friend Jack Bogle has available to him today the research he needs to make those of his ideas that are not rooted in error (which are most of them) work in the real world. We all have the ability to reduce the risk of stock investing by 70 percent just by insisting on the reasonable enforcement of the posting rules that apply at every board and blog that any of us has ever posted at.
Beat that!
It is what it is, Anonymous. I care for you. I show that in every post I write. I want good things to happen to you. It is not in my power to make good stuff happen for you without your cooperation. So things continue to drift in the other direction, despite my best efforts.
If I see opportunities to change things around, I will jump on them.
If no opportunities present themselves, I am going to have to accept that. I don’t exactly have any other options available to me.
As always, my best and warmest wishes go out to you, my old friend.
Rob
Rob,
I also want to just make sure I am clear on the totality of your message. As I understand it, you believe that the entire financial well-being of our country (and possibly the world) has been put in jeopardy because a dozen or so financial boards have decided to ban you from posting and that all of this can be saved if the ban is removed and you can post whatever you want at any time.
Did I get that right?
It is not just me who cannot post honestly. Bogle cannot post honestly today. Bernstein cannot post honestly today. Shiller cannot post honestly today. Pfau cannot post honestly today.
We need ALL of these people posting honestly at every investing board and blog.
When Rob Bennett is permitted to post honestly, then obviously all of these other people are going to be permitted to post honestly. So that solves the problem.
But I of course have no problem with you doing it some other way. You could permit Bogle to post honestly and then all the rest of us will join in. You could permit Pfau to post honestly and then all the rest of us can join in. I’m fine if it is me who goes first and I am fine if someone else goes first.
There are four fears that are keeping people from posting honestly.
One, people are afraid that the Wall Street Con Men will use their considerable power and money and connections to crush them with lawsuits.
Two, people are afraid that you Goons will destroy their web sites and their reputations.
Three, people are afraid that their readers and clients will become angry with them if they point out that they have been taken.
Four, people are afraid of how their own opinions of themselves will change if they acknowledge to themselves that they have caused millions of their friends and neighbors and co-workers and fellow community members to suffer failed retirements.
We are stuck in a Catch-22. People don’t tell the truth because they will be hated if they do. So we need to do something about the hate. But the reason why people feel so much hate when they hear what the research says is that they do not fully understand how stock investing works. And people cannot learn until we have a national discussion of the implications of the last 33 years of peer-reviewed academic research. Which cannot take place until people work up the courage to tell the truth!
Do you see any way out of this Catch-22 other than having Bogle stand at the front of a room and say the words “I” and “Was” and “Wrong”? (or at the very bare minimum “I’m” and “Not” and “Sure.”).
When Bogle gives that speech, it will be written up on the front page of the New York Times. No one is going to be afraid that the Wall Street Con Men are going to sue them once Bogle gives that speech. You Goons are going to drop the funny business once Bogle gives that speech. Lots of readers and clients are still going to be skeptical of Valuation-Informed Indexing after Bogle gives the speech but that is a healthy thing; we can still enjoy a learning experience even if lots of people remain skeptical — in fact, it is arguably a good thing that lots of people are skeptical, it makes for a better debate. And people will still experience feelings of self-disgust after Bogle gives the speech — but the discussion that follows will begin a healing process that will in time solve this problem. No one intended to get it wrong, and we will be entering the greatest period of economic growth in our history. Experiencing huge financial gains tends to make people feel better about this sort of thing.
If you have a better idea, I’d like to hear it, Anonymous.
We ALL should be permitted to post honestly, Rob Bennett and everyone else. That’s how our system works. There’s a good reason why the smart people who came before us chose that system. We made a terrible, terrible, terrible mistake when we stopped following the dictates of that system in this one area of investing analysis. We need to return to operating under the rules that made our country great. We need to allow each and every one of us to have his or her say. That’s how we all enjoy a great learning experience together.
Don’t let the bad guys get you down, man.
Rob
So you are the only one posting honestly, Rob and you are the one that hold the key to rescuing our entire economy. Interesting.
I am the one leading the effort, Anonymous.
Who would you say put up the famous post of May 13, 2002, pointing out the errors in the Old School safe-withdrawal-rate studies?
Was it John Bogle?
Was it Larry Swedroe?
Was it Bill Berntein?
These people put forward bits and pieces of honest stuff buried in a lot of Buy-and-Hold garbage.
Who would you say is the most severe critic of Buy-and-Hold alive today if not me?
Rob
I guess that makes you the financial messiah.
Bogle cannot post honestly today. Bernstein cannot post honestly today. Shiller cannot post honestly today. Pfau cannot post honestly today.
None of those guys has any need to “post” at all. They publish. When they feel like it. And nobody stops them.
What you cannot comprehend and will never accept is that they exist on a vastly higher level than you. Quite simply, they are somebody, you are nobody. Constantly dropping their names will never make you their peer.
No, really.
I guess that makes you the financial messiah.
It’s a tough job but somebody’s got to do it, Anonymous.
When did Jack Bogle first come out with a demand that the Old School safe-withdrawal-rate studies be corrected within 24 hours?
When did Larry Swedroe do that?
When did Bill Bernstein do that?
I did that on the morning of May 13, 2002.
There are two possibilities.
One, these people understand the realities and fail to warn people following these discredited retirement studies solely because it is an easy way to make a buck. That’s 20 times worse than anything I have every said about any of the Wall Street Con Men.
Two, these people are suffering cognitive dissonance. They want to be viewed as experts but they made a mistake and are embarrassed to acknowledge it. So they have convinced themselves that getting the numbers right in retirement studies isn’t such a big deal.
In that case, I clearly am years ahead of them in my knowledge of how stock investing works, no? I am not suffering from cognitive dissonance. I put up the post pointing out the errors in the Old School studies on the morning of May 13, 2002, and have been arguing that they should be corrected ever since.
Please name me one person who has argued as forcefully and as frequently that the errors in the Old School SWR studies should be corrected as I have.
There are Post Archives.
Rob
What you cannot comprehend and will never accept is that they exist on a vastly higher level than you.
They just “forgot” to point out the errors in the Old School SWR studies.
That makes perfect sense, Bizarro.
Truly outstanding!
Rob
Rob, have you ever met your “good friend” John Bogle? Ever corresponded with him? Do you have any indication that he, or any of the others whose names you drop, have ever heard of you or your quixotic campaign?
I’ve “met” Jack in lots of different way, Curious.
I’ve “met” him by reading his books. Do you know what it takes to write a book? I do. It takes sweating blood if you do it right. When I read Jack’s book, I could see the blood on the pages where he did the sort of work you have to do to connect with people. I learned important things from reading Jack’s book. And, yes, you can bet your last dollar that that’s a form of “meeting.” Jack put in the effort needed to connect with me in his book and he succeeded and I learned something and that’s magic. Yes, we met when I read his book. We met and we spent a good amount of quality time together. And it was magic. And I won’t ever forget that.
And of course we had other “meetings.” I saw his happiness and I saw his pain in my “interactions” with him on the boards and in our e-mail “correspondence.” You don’t think that the joy that Jack takes in the good work he has done doesn’t come through in his interactions on the Boglehead Forum and on the Vanguard Diehards forum before that? It comes through loud and clear to me, Curious. You don’t think I can detect the pain he is going through when Rob Bennett shows up and he has to break all the normal rules he follows because this Rob Bennett fellow is a younger version of himself and this Rob Bennett fellow is a young whippersnapper that is upsetting all the old apple-carts (“How did I get so old?” Jack ask himelf) and Jack feels that he now needs to play the role of the old gray fart that he used to do battle with back in the days when he had a bit more spring in his step?
I have a chapter in my book titled “Jack Bogle Started Out As a Little Boy.” That’s the story here, Curious. Jack is not a big building that kids visit on field trips. He is not a dusty photograph. He is not an image or an idea. Heaven help us all, he is not a Goon (perhaps in part, but certainly not in whole). Jack Bogle is a freakin’ human being. You do him a great disservice when you treat him as something other than that, as this weird presence that is the first being on Planet Earth that is not capable of Making a Mistake, this Severe Authority who speaks to us from Mount Olympus and Who Must Never Be Questioned and Who Knows All and who speaks with much authority and pomposity and who possesses no sense of humor at all. Jack Bogle is not Mel Lindauer!
He’s a freakin’ human being, one of the mistake makers, Curious. Just as you are when you remember what it was like to be a little boy with dreams and worries and hopes and love in your heart and not this Powerful Goon Presence. Jack is a mistake maker. He is a mistake maker who went to the big city and who had a big impact and who got talked into getting on the bad path and who knows in his heart today that he needs to find his way back to the good place but who doesn’t have too many true friends anymore, who are the only kind who care about you enough to help you back to the good place and not quite so much about how many coins they can trick out of you with their flattery.
Jack knows who I am. Jack wouldn’t have went running to Linduaer is he didn’t know who I was. Jack wouldn’t have been afraid to stand on a stage with me if he didnt know who I was. Jack wouldn’t have been afraid to respond to Rob Arnott’s e-mail if he didn’t know who I was. Jack wouldn’t have risked huge financial liabilities and a long prison sentence if he didn’t know who I was. Give me a friggin’ break.
I am Jack’s worst nightmare. I am his younger self. I am the honest Jack, the loving Jack, the smart Jack, the Jack who Jack wishes he could be today. You are the Goon who whispers in Jack’s ear: “You can never be that young Jack again! You are corrupted. You are old. You smell. I own you today, bad Jack. You will do what I say and you won’t ask questions. Mel will tell you to jump and you will ask Mel how high and you will humiliate yourself, Old Jack. You are a Goon’s plaything today, Old Jack, and don’t ever forget if you don’t want another whipping!”
Jack knows who I am because I am the Young Jack trying to take him back to a world that he worries is lost to him forever, the world of Young Jack and the world of honestly and the world of caring for your readers and the world of intelligence and the world of learning and the world of growth and the world of disassociating yourself from Goons because of your repulsion to the smell of them.
He pines for Old Jack. And he feels that he is not up to being Young Jack ever again. And he is wrong about that. But who could blame him for his confusion when he has slobbering Goons like you whispering in his ear?
Bill Bernstein is the same. Larry Swedroe is the same. Rick Ferri is the same. Wade Pfau is the same.
They ALL want to be clean again, Curious.
That’s my secret edge here.
It’s not really a fair game, is it?
Good luck going up against all my fine human friends, smelly Goon!
Does Jack know Jack? That’s the real question here. Does old, smelly Jack remember the young, smart loving Jack? He signals me even in his most fearful acts that he does.
We’ll see.
Rob
Rob,
Do you think you and your new buddy Joe will ever be as successful as Mike Piper? Here is the latest interview with Mike:
https://personal.vanguard.com/us/insights/article/piper-oblivious-investor-022014
Yes.
Buy-and-Hold is the past, Valuation-Informed Indexing is the future.
Mike is a talented guy and a hard-working guy and a smart guy and a nice guy and a fun guy.
But how the heck is he going to explain all the Buy-and-Hold stuff on his site after the next crash?
He gets these endorsements from Buy-and-Holders today. But there is a record of all that stuff on the internet. How does he explain it?
I want to get all those endorsements. I am 100 percent in favor of the idea.
But at what price?
On the evening of August 27, 2002, I knew that Buy-and-Hold was a big pile of smelly garbage. That was the night that Greaney put forward his first death threat. 200 of my fellow community members endorsed his post. That was the end for me. Buy-and-Hold causes too much emotionalism. I want no part of it.
Would I like my blog to be as successful as Mike’s? Absolutely.
ButI want my blog to be successful not just for a week or a month or a year or ten years. I want it to be successful permanently. To have permanent success, you have to be real, you have to be research-based, you have to be honest.
I like Mike and I will always be happy to work with him. But I am always going to be honest about how he has promoted Buy-and-Hold strategies for a long time. So long as he accepts that, I certainly want to be friends with him.
I would never choose his path in a million years. I don’t want to pay that price for success. It’s degrading to do it that way. It’s not for me.
I hope that helps a bit, Anonymous. I WANT the success. 100 percent. But not that way. I want it honestly. I’d rather not have it at all than have it dishonestly.
That’s the story here.
Rob
So I take it from that reply that you have never met Jack, nor received any sort of communication or correspondence from him. Many might find it odd to characterize someone as a good friend despite having never met or corresponded with that person in any form.
Even odder is that you pretend to know him — what he thinks, what motivates him, what his concerns are.
And even oddest is that you consider yourself a “young Jack.” I suggest you familiarize yourself with Jack’s bio a bit. By the time he was your age (late-40s, early 50s?) he had accomplished a great deal and was a widely acknowledged leader of one of the nation’s largest financial services firms.
On the other hand, you (as far as I can tell) operate a thinly-read blog which seems to be used primarily to correspond with a handful of people who like to goad you into producing thousands of words about your wild persecution complex.
Jack was known and read and respected by hundreds of thousands of people. You? Not so much.
You can dismiss me as a Goon, but I’m just someone who happened to stumble upon this dark little corner of the internet and (naively) thought that a bit of common sense might help cure you from some of the misconceptions you hold. Lesson learned.
P.S. I do know quite a bit about writing books, Rob. Even better, writing books that are widely read and well-acclaimed.
There would be no Valuation-Informed Indexing without the fine work that was done by my good friend Jack Bogle in earlier days, Curious. I will always love and respect and admire the man for those accomplishments, which are genuine and which can never be canceled by subsequent behavior.
I have advised Jack to disassociate himself from you Goons in every way, shape and form possible. He has elected not to follow the advice of a true friend. That’s as far as I can go with it without becoming a kind of Goon myself.
I look forward to working closely with Jack in coming days to rebuild the economy that was brought to its knees through the reckless and relentless and ruthless promotion of Buy-and-Hold “strategies.” I remain confident that the man who I think it would be fair to say I know 20 times better than you do will experience a change of heart following the next price crash, which may well send the country that he loves into its Second Great Depression.
I naturally wish you all the best that this life has to offer a person.
Rob
(via Bogleheads)
John Bogle’s Biography:
Education:
1952–1959 University of Pennsylvania, Evening School of Business and Finance
May 1951 Graduated from Princeton University, magna cum laude in Economics
May 1947 Graduated from Blair Academy, cum laude
Employment Positions:
2000–present Founder, The Vanguard Group and President of the Bogle Financial Markets Research Center
1996–2000 Senior Chairman, Vanguard
1974–1996 Chairman and Chief Executive Officer, Vanguard
September 1974 Created The Vanguard Group
1970–1996 Chairman, Wellington Fund and associated funds
1967–January 1974 President, Wellington Management Company
1965–1967 Executive Vice President, Wellington
1962–1965 Administrative Vice President, Wellington
1955–1962 Assistant to the President, Wellington
June 1951 Hired by Walter L. Morgan, Founder and Chairman, Wellington Management Company
Directorships and Trusteeships:
1999–2007 National Constitution Center, Chairman of the Board
2000–2005 Instinet Corporation, Director
1996–2002 American Indian College Fund, Trustee
1996–2000 Chris-Craft Industries, Director
1989 Princeton University Investment Company, Director
1981–1987 The American College, Trustee
1978–1999 Mead Corporation, Director & Chairman of Finance Committee
1975–2001 The General Accident Group of Insurance Companies, (later Commercial Union) Director
1974–1999 Vanguard Group, Director, Chairman, 1974–1996
1971–present Blair Academy, Trustee, Chairman, 1986–2001
1971–1991 Meritor Financial Group, Director
1971–1991 Bryn Mawr Hospital, Director and Chairman, Finance Committee
Memberships and Committees:
2009–present Financial Crisis Advisory Group
2007–present Adirondack Roundtable Committee
2007–present Lake Placid Shore Owners Association
2006–present Dow Jones Wilshire Advisory Board
2004–present American Philosophical Society
2004–present American Academy of Arts and Sciences
2003–present Journal of Investment Management, Advisory Board
2003–present Financial Analysts Journal, Advisory Council
2002–2003 Conference Board Commission on Public Trust and Private Enterprise
2002–present Phi Beta Kappa Society, Investment Committee
1997–2000 U.S. Independence Standards Board
1972–1976 National Association of Securities Dealers, Chairman, Investment Companies Committee
1972–1978 Princeton University, Economics Department Advisory Council (Chairman 1978)
1969–1974 Investment Company Institute, Board of Governors (Chairman 1969–70)
Honorary Degrees:
May 15, 2011 Villanova University, Doctor of Commercial Science
May 23, 2010 Trinity College, Doctor of Humane Letters
May 18, 2007 Georgetown University, Doctor of Humane Letters
May 31, 2005 Princeton University, Doctor of Laws
May 15, 2004 Pennsylvania State University, Doctor of Humane Letters
June 14, 2003 Drexel University, Doctor of Business Administration
May 23, 2001 New School University, Doctor of Laws
May 13, 2001 Susquehanna University, Doctor of Laws
December 15, 2000 Eastern University, Doctor of Humane Letters
June 11, 2000 University of Rochester, Doctor of Laws
October 22, 1999 University of Delaware, Doctor of Laws
October 15, 1999 Albright College, Doctor of Humanities
May 17, 1997 Widener University, Doctor of Humane Letters
Publications: Books
2013 The Man in the Arena (Written by Knut Rostad, Wiley)
2012 The Clash of the Cultures, Investment vs. Speculation(Wiley)
2011 The House that Bogle Built (Written by Lewis Braham, McGraw-Hill)
2010 Don’t Count On It (Wiley)
2009 Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition (Wiley)
2008 Enough. True Measures of Money, Business & Life (Wiley)
2007 The Little Book of Common Sense Investing (Wiley)
2005 The Battle for the Soul of Capitalism, (Yale University Press)
2002 Character Counts: The Creation and Building of The Vanguard Group (McGraw-Hill)
2000 John Bogle on Investing: The First 50 Years (McGraw-Hill)
1999 Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor(Wiley)
1996 John Bogle and the Vanguard Experiment: One Man’s Quest to Transform the Mutual Fund Industry (Written by Robert Slater, Irwin)
1993 Bogle on Mutual Funds: New Perspectives for the Intelligent Investor (Irwin)
Publications: Articles
2011 The Journal of Portfolio Management, The Clash of the Cultures
2009 The Journal of Portfolio Management, The Fiduciary Principle: No Man Can Serve Two Masters
2008 Financial Analysts Journal, Black Monday and Black Swans
2008 The Journal of Portfolio Management, A Question So Important That It Should Be Hard To Think About Anything Else
2005 Bold Thinking on Investment Management: The FAJ 60th Anniversary Anthology
2004 Financial Analysts Journal, The Mutual Fund Industry Sixty Years Later: For Better or Worse?
2003 CFA Magazine, Whether Markets are more Efficient or less Effective, Costs Matter
2003 Journal of Investment Management, Don’t Count on it The Perils of Numeracy
2002 The Journal of Portfolio Management, An Index Fund Fundamentalist
2002 The Corporate Board, Has Corporate Governance Let Us Down?
1998 The Journal of Portfolio Management, The Implications of Style Analysis for Mutual Fund Performance Evaluation
1995 The Journal of Portfolio Management, The 1990s at the Halfway Mark
1992 The Journal of Portfolio Management, Selecting Equity Mutual Funds
1991 The Journal of Portfolio Management, Investing in the 1990s: Remembrance of Things Past, and Things Yet to Come.
1997–2004 The Wall Street Journal, numerous op-eds
1999–2003 The New York Times, numerous op-eds
Awards:
2012 RIIA Consumer Advocate Award
2011 Salvation Army “Others” Award
2011 Tiburon Strategic Advisors CEO Summit XX Award
2010 FUSE Research Network Award for Lifetime Impact and Commitment to Investors
2010 Investment Management Consultants Assoc. Richard J. Davis Ethics Award
2009 Graham & Dodd Best Perspectives Award for “Markets in Crisis”
2009 Graham & Dodd Perspective Article Award for “Back Monday & Black Swans”
2009 Tenth Annual Bernstein Fabozzi/Jacobs Levy Award for Outstanding Article – A Question So Important
2008 The Bonnell Award, Community College of Philadelphia
2007 Heritage Award, The Historical Society of Pennsylvania
2007 Union League Business Leadership Award
2007 National Council on Economic Education Visionary Award
2007 CFA of San Francisco Distinguished Speakers Award
2006 Center for Corporate Excellence Exemplary Leader Award
2006 Chester County Economic Development Council Hall of Fame Award
2005 Friend of the Delaware Investor Award from the Delaware Dept. of Justice
2004 Committee of Seventy, Philadelphia Good Citizenship Award
2004 Marketing Expo, Lifetime Achievement Award
2004 Institutional Investor Lifetime Achievement Award
2003 National Foundation for Teaching Entrepreneurship, Entrepreneur of the Year
2003 Yale School of Management, Legends of Leadership
2003 Better Business Bureau, Certificate of Commendation,
2002 Union League of Philadelphia, Founders Award for Business Leadership
2002 Franklin Celebration in Philadelphia, Benjamin Franklin Founders Award
2000 Pennsylvania Chamber of Commerce, Pennsylvania’s Business Leader of the Year
1999 Princeton University, Woodrow Wilson Award for distinguished achievement in the Nation’s service
1999 Fixed Income Analysts Society, Inc., Hall of Fame
1999 PA Partnership for Economic Education, Adam Smith Distinguished Leadership Award
1999 National Association of Personal Financial Advisers, Special Achievement Award
1999 National Investment Company Service Association, Robert L. Gould Award
1998 Temple University, Musser Excellence in Leadership Award
1997 Assoc. for Investment Management and Research, Award for Professional Excellence
1997 Leadership in Financial Services (Macmillan Press Ltd), one of the Financial Leaders of the 20th Century
1995 Advancement for Delaware Valley Independent Schools, Award for Philanthropy to Independent Education,
1993 Financial Analysts of Philadelphia, Lifetime Award of Distinction
1992 Newcomen Society, Honor for innovation
Public Recognition:
2005 FINANCIAL PLANNING Magazine, Hall of Fame
2005 TIME Magazine, “Ten Questions for John Bogle”
2004 TIME magazine, The Time 100—the world’s 100 most powerful and influential people
2002–2004 Weekly program with Tyler Mathisen on CNBC
2001 Louis Rukeyser’s Wall Street Week, Hall of Fame
1999 FORTUNE magazine, One of the investment industry’s four Giants of the 20th Century.
1999 Barron’s—Investment Hall of Fame
1996 Fund Action Magazine, Fund Leader of the Year
Other Achievements:
1999–2000 Henry Kaufmann Visiting Professor of Business, New York University
1999 Leadership Speakers Series, Fox School of Business Management, Temple University
Distinguished Lectures:
2009 Columbia Business School Stanley R. Klion Forum
2008 George Washington Manual Cohen Lecture Series
2007 Princeton University, The Maclean House 2007 Lecture Series
2005 Vanderbilt University, Distinguished Speaker Series
2005 Duke University’s Fuqua School of Business, Distinguished Speakers Series
2004 Washington State University, The Gary M. Brinson Distinguished Lecture
2004 University of Mississippi, Otho Smith Fellows Program Distinguished Lecture
2003 Vanderbilt University, The Owen School of Management—Distinguished Speaker Series
2003 Wake Forest University, Joseph A. Jones Lecture
2003 Bryn Mawr Presbyterian Church, Community Forum Distinguished Speaker Series
2002 Cornell University, Park Distinguished Lecture Series
2002 Princeton University, Center for Economic Policy Studies
2002 Neeley School of Business, Executive Speaker Series
2002 Blair Academy, Hollerith Lecture Series
2000 New York University, Executive Lecture Series
2000 New York University, Seymour Jones Distinguished Lecture
1999 Massachusetts Institute of Technology (Lincoln Laboratories), Distinguished Lecture Series
1998 Houston Club, Distinguished Speaker Series
And yet Rob Bennett, some fool whose only claim to expertise in this field is that he figured out how to get his words posted to the internet, called for correction of the errors in the Old School safe-withdrawal-rate studies at least 12 years sooner than Old Saint Jack.
I wonder why.
Rob
Here’s a scary chart, showing stock prices around the ’29 crash, and stock prices now, on one chart. Pretty eerie looking!
http://globalfinance.zenfs.com/en_us/Finance/US_AFTP_SILICONALLEY_H_LIVE/Here%27s_The_Truth_About_That-56f56097141ee346dac325fc8aaacb79
Yeah, yeah.
I view that sort of thing as “Doom and Gloom.” I’ve written articles arguing that the only thing worse than Buy-and-Hold is Doom and Gloom. It’s the same sort of emotionalism coming from a different direction.
I’ve been following this stuff for a long time. You know when I recall seeing charts like that before? In the late 1990s. People were producing charts like that all the time in those days.
Was it true? I think it was true that stocks were insanely overpriced and that bad things always follow when we permit stocks to become insanely overpriced. To that extent it was true.
But did we see that sort of pattern in the chart starting in 1996? We did not. So why bring that stuff up?
I have said that we are headed for a 65 percent price drop sometime over the next year or two or three. That statement is rooted in the peer-reviewed academic research of the past 33 years. So I feel comfortable saying it. I don’t say that I am God. I don’t say that I am all-knowing. I just say “this is what the research says” and leave it at that.
So long as the people creating those charts are only saying “this is one possibility,” I don’t suppose there’s much harm in it. People can freak out based on the chart or people can elect not to freak out, it’s up to them.
I don’t see the chart as science. There are hundreds of ways to manipulate charts to make them say what you want them to say. That chart doesn’t persuade me one way or another.
What persuades me is peer-reviewed academic research. The research does indeed tell us that there is a big price drop coming. So to that extent I am on board with the message of that chart. But the research doesn’t tell us when it is coming. And the research doesn’t tell us how big the price drop is going to be (the 65 percent number is the most likely scenario, it could be 50 percent and it could be 80 percent). And the research does not suggest that these things play out the same way each time. Yes, there are usually similarities. So it does make some sense to look at what happened in 1929. But we always have to keep in mind that there is no Stock Price Controller in the Sky that forces identical patterns to play out over and over again.
If the chart gets some people shook up, it might serve a good purpose to that extent. But it’s important that we distinguish things the research tells us from things the research does not tell us. The research tells us that long-term returns are highly predictable. So we should all let that in and we should all be interested in exploring the implications of that powerful insight. But we also have to respect the limits of what the research tells us. The suggestion planted in people’s minds by that chart goes too far, in my assessment.
I view the chart as being as much the product of voodoo as I see it being the product of science. My take is that Buy-and-Hold is really the product of science but it is now an old and discredited form of science. I would describe this chart as being more the product of voodoo, although in this particular case there are important realities that are the product of science that the chart is pointing to in its unscientific way.
What I don’t like about the chart is that I feel that the result of promoting it may be to scare people. Fear is emotion and my aim (an aim I share with my Buy-and-Hold friends, at least in theory) is to REDUCE the extent to which emotionalism directs decision-making in the investing field. So I don’t feel comfortable using charts like that to persuade people of the dangers of going with a high stock allocation today.
I DO feel comfortable pointing to the 33 years of peer-reviewed academic research showing that we are on a path leading to a 65 percent price crash. That stuff really is science. One of the articles that I am working on is a collection of graphics that make the Valuation-Informed Indexing point. I certainly will be including some form of the graphic in the early pages of Shiller’s book, which makes a point somewhat along the same lines of the point being made with that graphic in a different way. I doubt that I will be including the 1929 comparison graphic.
My guess is that it is the product of manipulation. For me to have trust in it, I would need to see it replicated in peer-reviewed academic research. Does the market always follow patterns such as the one being suggested here? Why or why not? What is the theory behind the idea that the same patterns would repeat over and over again? Has that theory been tested? Have the tests been examined by serious people? It is those sorts of questions that are behind my skepticism.
I do believe that prices are headed down hard. But I don’t believe that because of what I see when I look at this chart. I don’t believe that stock prices follow historical patterns precisely. They DO follow patterns. I believe in what the book “Stock Cycles” reports. But I also believe that there is always much that is unknown about the return sequences that will be playing out in the future.
We may end up in a Second Great Depression, just as 1929 took us to a First Great Depression. But I believe we will get there via a different sort of experience and a different sort of returns sequence. In a big-picture sense, we are indeed in a 1929-like scenario (1929 and 2000 produced the two highest P/E10 levels in U.S. history). But I doubt very much that we are going to see the 1929 experience play out just as it did before (in fact, it’s already too late in the game for that to happen — our trip down from the top to the bottom has already taken longer to play out than it took in the 1929 experience). So I am uncomfortable placing too much confidence in the message of the chart.
If the chart causes people to stop and think, it is serving a good purpose. But I would prefer that people be caused to stop and think through more legitimate arguments than the argument offered by that graphic. I mean no insult to the people who created the graphic. I personally just do not buy into that particular way of making the point. The graphic does not pass the intellectual test for me, based on what I know about all this stuff today.
Rob
What exactly is it that you see is wrong with the chart, Rob? No narrative was provided along with it, so any inferences you made seem to be the product of your own biases, is that right? Perhaps you think the data used to make the chart was ‘cooked’ – i.e., that it is an outright fraud and a lie? I am very curious into getting a take on your own reasoning behind apparently rejecting the thing out of hand.
The chart makes a comparison that it would only make sense to make if short-term timing worked. There’s 49 years of peer-reviewed academic research showing that short-term timing doesn’t work.
I don’t say that it is “an outright fraud and a lie.” If people want to look at specious comparisons, it is their business. But for the comparison to persuade me, I would need to see some peer-reviewed academic research showing that short-term timing works.
Say that someone wrote an article saying that the sun revolves around the earth and that you can tell because the sun rises every morning and then sets every night. My reaction would be to find that silly. I find this chart silly. All the evidence that I have seen tells me that markets don’t work that way, that we don’t see short-term patterns that applied in the past applying again in the future. Except as a result of pure coincidence. In which case, there’s no significance to the chart.
People are allowed to look at what people want to look at. But I am intellectually offended by this sort of thing. Our knowledge of how stock investing works is today in the process of moving from the Dark Ages to something more scientific. I want to see that process continue. This sort of thing takes us backward. I see it as voodoo. I don’t see any scientific validity to it. Even Buy-and-Hold had scientific validity once upon a time. I don’t see that chart-reading to predict short-term results ever had any scientific validity.
Perhaps I will be proven wrong. Perhaps there will be a day when we will all learn that short-term timing really does work. If that happens, that happens. But I am not able to say today that I believe in this mumbo jumbo. I do not. I personally find it embarrassing. I see no validity to it.
If you believe that short-term timing works, can you please point me to the peer-reviewed academic research showing this? If you cannot, I am going to remain unimpressed. If there is no peer-reviewed academic research supporting this kind of thing, how is this any better than Buy-and-Hold? Arguably, it’s worse. Buy-and-Hold at least at one time was thought to have peer-reviewed academic research supporting it.
The more attention people pay to voodoo, the less attention people are paying to the real stuff. There’s 33 years of peer-reviewed academic research telling us that we will be seeing a price crash of 65 percent sometime within the next few years. Why not focus on that instead of this voodoo?
Like it or not, that’s my sincere take, Anonymous.
Rob