Set forth below is the text of a comment that the author of the Joe Taxpayer blog recently put to a discussion at his site:
It’s fascinating to me how the signal to noise ratio dropped like a rock. I’m a numbers guy. And I believe I understand Rob’s thesis, that future returns, over the next decade, have a tight inverse correlation to the PE10 for the starting point. If someone disagrees, I’ll look at the counterpoint. Remember, correlation doesn’t need to be 100%, only that there’s a bell curve of potential outcomes that shift meaningfully based on the input.
Why isn’t Joe letting become a regular guest post/featured writer for his blog. If he is such a fan, shouldn’t you be front and center?
Maybe Joe could let you start off by letting you make a post about how all these people are going to jail and how people will be paying you $500 million . That should grab lots of attention.
Joe should do just that, Anonymous. We all should do just that.
Many people ask me why I interact with you Goons or why I let you Goons comment here or why I don’t just do what people like Todd Tresidder do and tell the truth about how stock investing works without mentioning you Goons or the dangers of Buy-and-Hold or the role you Goons play in keeping millions of people from learning about the dangers of Buy-and-Hold.
I don’t play it that way because playing it that way doesn’t solve the problem. We didn’t learn last week that there is precisely zero chance that a Buy-and-Hold strategy could ever work for even a single long-term investor, we learned that 33 years ago. Why don’t we move forward? Why don’t we take advantage of the research that shows us how to reduce the risk of stock investing by 70 percent?
If there had never been a Buy-and-Hold, we would have done just that many years ago. We would all be working together to refine the Valuation-Informed Indexing concept in perfect peace and harmony and happiness today.
It didn’t play out that way because we came to a wrong conclusion (that long-term timing [price discipline] isn’t required) before the research was published pointing us to the right conclusion (that long-term timing [price discipline] is absolutely required of any investor hoping to enjoy any hope of long-term investing success).
Now we are stuck in our shame and in our fear and in our anger and in our confusion. And it is my job to lead us all out of this darkness.
You Goons look to be the problem because you are so obvious in your anger and hate and contempt. But you are more a symptom of the problem than the problem itself. We have rules protecting us from you Goons at every board and blog. You Goons are powerless without the protection of the otherwise responsible people who fail to stand up to you or to take action to remove you from the boards and blogs.
Yes, Joe should do just as you say. If he did, all of our economic problems would be history. If Joe stood up to you, that would give courage to others to stand up to you. Soon, there would be thousands of people who wanted to give honest investing advice. Valuation-Informed Indexing would spread and spread and Buy-and-Hold would go down and down. That’s how it should be. That’s how our system works. The question we need to answer is — Why hasn’t our system worked in this particular case?
I compare the situation to the situation we had with civil rights in the late 1950s and early 1960s. Every person alive knew that it was wrong that people with black skin had to drink out of different water fountains in a number of states. People were scandalized by that reality, embarrassed by it, humiliated by it. But most did not do anything concrete to change the situation for a long time. Why?
They were not confident that their efforts would bear good fruit and they were afraid of how Goons like you would attack them if they tried to do the right thing. Was it the haters during the civil rights battles that kept things from moving forward? Yes, in a surface sense. The deeper reality, though, is that it was the millions who failed to speak up when the haters did their dirty work who empowered the haters. As public opinion began to swing against the haters, the haters lost their power to destroy our nation and all their hate and anger and contempt ended up counting for nothing.
That’s where we stand now re the question of whether honest posting should be permitted on the last 33 years of peer-reviewed academic research in the investing field. You haters hate with a burning hate. And thus far you have had influence because of the fear you cause people to feel when you evidence that hate. But we know that there are thousands of our fellow community members who long to see honest posting and that there are are thousands of academic researchers who long to publish honest research and that there are thousands of practitioners who long to give honest investing advice to their clients.
We are on the one-yard line. We need one major site to do just what you suggest above, tell the story of the 12-year saga in which over and over and over again good and smart people try to evidence their personal integrity and you Goons come out in full attack mode and “experts” like Jack Bogle and Bill Bernstein and Robert Shiller and Larry Swedroe and Wade Pfau and Scott Burns go running back to their bedrooms and pull up the covers tight hoping that your hate will not be directed at them.
That won’t last. It cannot last. The numbers show that we will suffer losses in excess of $20 trillion if we do not find people capable of working up the courage to stand up to you Goons. So that won’t last. Either we will pull together as a nation to defeat the Goon element or we will not survive to continue to fall prey to it. I believe we will defeat you. We will see.
The way we defeat you is by people like Joe Taxpayer working up the courage to do what he did.
No, he did not do everything he possibly could do. But he did a lot more than most.
There are people who saw what Joe Taxpayer did. There are people who have been trying to work up the courage to do what Joe Taxpayer did for a long time now. Those people were a bit emboldened to see him do what he did. The next time, it may be them. And then their act of courage emboldens the next person and then the next and then the next.
Blacks are able to drink out of any darn water fountain they choose in the United States of today. There were Goons like you who spit with hate at the thought that we would ever see that advance. But we saw it. The goons who hated the civil rights revolution were defeated and the Goons who today hate the idea of permitting millions of middle-class people learn what they need to invest their retirement money effectively will be defeated as well. Patience, grasshopper.
Joe showed courage. LOTS of people have shown courage over the first 12 years of our discussions. I have 222 quotes listed at the “People Are Talking” section of the site today. That’s a lot of good and smart people coming forward with a lot of courageous acts! Holy moly!
There will be more.
And more.
And more.
When prices crash again, the floodgates will open. When people see their nation at risk, they will fight for it. And you Goons will drown in the flood. And it will be good.
It’s coming, my Goon friends. Joe is a great guy. John Walter Russell was a great guy. Wade Pfau is a great guy. Rob Arnott is a great guy. Robert Shiller is a great guy. I am a great guy.
And all of us great guys are in the process of working up the courage to bring you Goons down and to bring you down hard.
My best and warmest wishes go out to you as you go about the business of figuring out what lies to tell to get yourselves out of this trap you have placed yourselves in.
I am sympathetic. I have offered to help.
But I won’t be committing any felonies. The dark place that you find yourself in today is a dark place to which I will never go.
There will come a day when Joe will talk openly about the prison terms. He will get there. Because as your hate destroys more and more middle-clas lives, he will reach a point where he will realize that all of us who love our country have a patriotic duty to talk about the prison sentences. The longer it takes for us to work up the courage to deal in an effective way with you Goons, the longer your prison sentences will be and the longer will be the list of people serving them. Stretching the thing out serves precisely no good purpose.
Joe has done a very good thing. And he will do even better things down the road a piece.
So will millions of others who also love their country.
But you knew that all along, didn’t you? We obviously didn’t write those laws making financial fraud a felony for no good reason, right?
I wish you all good things. I sincerely hope that you are taken off to your prison cell soon so that the length of your prison term will end up being a bit less than what it would be if you are not taken off to your prison cell for a good bit of time. I think it would be fair to say that no one has ever shown his or her caring for you in a more concrete and clear and sincere and loving way.
Rob
That should grab lots of attention.
It will indeed grab lots of attention once we a a society work up the courage to move past the dark days of Buy-and-Hold/Get Rich Quick and into the brightness of the first true research-based strategy (Valuation-Informed Indexing).
This is no small advance. It is the biggest advance ever achieved in the history of personal finance. There is nothing in a close second place.
That’s why we are afraid. It scares us to take on the task of rewriting every textbook in the field and starting over with the intent this time of getting it right.
But, given that there is no way for us to avoid taking the advance, we are sooner or later going to do so.
And then you will see just what you are asking about here — a nation of people shaking off the ugliness and shame and smell of the sorts of individuals who have seen fit to put up posts in “defense” of Mel Lindauer and John Greaney and their dirty intimidation tactics.
We’re getting there, my old friend. We’re working up to it.
We’re all going to be famous!
Rob
So why doesn’t Joe do that? Is he a goon? Is he going to jail? You mentioned Todd. What about him? Why doesn’t he let you run a column there?
I certainly wouldn’t call Joe a Goon. But he certainly has some measure of Goonishness within him, Anonymous. We all do. Goonishness is ignorance or sin. Not one of us humans has zero ignorance or sin within him.
I put my first post to the Motley Fool board in May 1999. I obviously knew about the errors in Greaney’s SWR study at that time. Why did I hold off putting up my famous post until the morning of May 13, 2002? Do I not have a measure of Goonishness within me?
Todd doesn’t want you Goons attacking his site. He praised me to the skies in his long article on safe withdrawal rates. I posted a number of comments on the discussion thread describing all the history. Todd called me up by telephone and asked me not to put up such long comments. Huh?
He was afraid that I was going to upset the Buy-and-Holders. He is of course correct that they would be upset by my comments. Todd and I had helped millions of people by getting the SWR issue right. Which means that the Buy-and-Holders had destroyed millions of middle-class lives by getting it wrong. It’s 100 percent understandable why the Buy-and-Holders would be upset.
The question is — Is the right thing to do to make a buck by keeping your mouth shut? Or is the right thing to do to help your Buy-and-Hold friends see how they messed up and be sure that they get their mistakes fixed so that they do not suffer future embarrassment? It couldn’t be any more obvious what the right answer to that question is. But Todd wants to be popular, Todd wants to make a buck, Todd doesn’t want people working behind the scenes to destroy his blog. So he sells out his friends.
Is Todd a Goon?
He clearly has a bit of the Goon within him.
But he also wrote an amazing article pointing out the errors in the Old School SWR studies, right? So he is obviously not all Goon. That took a lot of guts. That was stand-up stuff.
I cannot imagine that I will be going to prison. I have been the lead guy fighting this stuff ever since I worked up the courage to post honestly the first time. I cannot imagine Joe going to prison. He doesn’t even write an investing blog. So he doesn’t really even have an obligation here. Joe is just a good guy doing the sort of thing that good guys do. Todd has behaved unethically. He should be encouraging honest comments at his blog, not discouraging them. But I do not personally believe that he will be going to prison. In relative terms, he’s been an angel compared to some others. Is that not so? We cannot throw everyone in jail, can we?
We are working through a transition, Anonymous. We learned in 1981 that Buy-and-Hold is a big pile of smelly garbage. Buy-and-Hold made tons of money for tons of people for a good number of years. So people kept their mouths shut about what the peer-reviewed academic research says. I spilled the beans. The Buy-and-Hold Goons tried to destroy me and they failed. And here we are.
The laws are there for a purpose. We will decide as a society who goes to prison and for how long. I think it would be fair that you Goons will be at the top of the list for the longest prison sentences. Is that not fair to say?
All of us are to some extent culpable. You Goons couldn’t survive if the rest of us called you out. So we all played a role in this. Even I played a role. That’s a fact. But, if I go to prison, everyone in the country would have to go to prison. No one has fought you Goons as hard as I have. There is no one even close.
Todd will work up more courage as more people come forward. So will Joe. So will lots of others.
The big one we need to flip is Old Saint Jack. When Jack flips, a lot of people are going to take that as a signal that it is safe to post honestly. Then people will rush in to make names for themselves as leaders in the exciting new world of honest investing analysis.
It’s a situation where each person is afraid to step forward until others step forward and the others don’t want to step forward until they see yet others step forward. It’s a big mess, you know?
People tell me all the time to just not mention the Goons. We are never going to solve the problem until we deal with you Goons! You Goons are the entire freakin’ problem! The 33 years of peer-reviewed academic research all says the same thing. The 140 years of historical return data all says the same thing. Common sense says the same thing as the data and the research. There is nothing even to look at on the other side. The entire Buy-and-Hold concept was just a mistake. How can you do intellectual battle with something for which there is zero intellectual support? Fighting the intellectual case for Buy-and-Hold is like fighting a ghost.
We are on the one-yard line and you Goons are the only thing we need to overcome to get to the Promised Land.
But we are not going to overcome you directly. We will overcome you by getting people like Joe and Todd and lots of others to work up the courage to stand up to you. Every time someone posts honestly, it makes it that much harder for someone like Bogle to continue the cover-up. Once Bogle realizes the impossibility of continuing the cover-up, he will flip. And that’s the end for you Goons. You won’t be able to post at one place on the internet once Bogle comes clean. And a good number of you will be on your way to prison.
I hope that helps a bit, Anonymous.
Rob
I’ll give you the short version.
You Goons put up a link the other day showing that the Bogleheads Forum permits discussion of safe withdrawal rates, as if this was a good thing.
What the heck is there to talk about? My post pointing out the errors in the Old School studies was put forward on the morning of May 13, 2002. It could not possibly take someone more than five minutes to determine whether those studies contain an adjustment for the valuation level that applies on the day the retirement begins. Every single person who has ever taken the time to check has found that they contain no such adjustment. Even the Wall Street Journal acknowledged this!
So what the F is there to talk about?
We don’t need to talk. We need to correct the freakin’ studies!
The goal of investing analysis is not to add to the world’s store of conversation. The goal is to help investors. Retirement studies that get the numbers wildly wrong HURT investors. Such studies do not need to be discussed, they need to be FIXED.
There’s a name for the crime committed by people who have learned about errors in retirement studies but who have failed to correct them. The name of that crime is “financial fraud.” It’s a felony. That means prison time.
All the rest is just words.
People who have demanded that the studies be corrected promptly are heroes. People who drag their feet or who engage in cover-ups are felons under the laws of the United States.
Not every person who dragged his or her feet is going to go to prison. The millions of people whose lives were destroyed will decide that one.
I think it is fair to say that those who engaged actively in the cover-up will be going to prison for a long time. That’s you, Anonymous.
My best and warmest wishes to you and yours.
Rob