“If You Post Claims About Retirement Planning at Your Blog That You Know To Be False and Millions of People Experience Failed Retirements As a Result, That’s Obviously Financial Fraud. Are You Excused If the Most Abusive Poster in the History of the Internet Threatens to Destroy Your Business If You Post Honestly? WHO THE HECK KNOWS?”

Set forth below is the text of a comment that I recently put to another blog entry at this site:

Out of curiosity — I know you say that those who support Greaney or Lindaur, or Pfau, or Bogle, or Burns, etc are all felons, who will be going to prison. Super.But, putting aside those that are just supporters of the GRQ terrorists, how many people have actually made death threats related to their defense of the corrupt evil of buy and hold investing?I think I’ve seen you name at least four or five, is that right? But, is it more like a dozen? Even more? Could you please list them? And provide links to the actual threats? Do you think these horrible criminals will get more prison time than those whose crime is just read Bogleheads casually, or to have bought a book on Passive Investing, or merely quietly practice the dark art of non-Lucky Seven investing in secret on their own? Or is everyone who ever even toyed with buying and holding indexes without using PE10 going down, Rob? Curious to hear your take on these specific matters.

There are millions of good and smart people who follow and believe in Buy-and-Hold strategies. I was of course one of them and I don’t see that these people have anything whatsoever to worry about. I think they are mistaken. But their mistake is understandable. There really is academic research showing that short-term timing doesn’t work. We really did not have available to us the research needed to come to an understanding of how things really work until 1981. Shiller’s research findings were truly “revolutionary.” So it is not hard to see why it would take some time for people to come to see the implications that follow from his work.I believe that it is the people who have in some way participated in the 11-year cover-up of the errors in the Old School safe withdrawal rate studies who are in danger of going to prison.

There are four categories of people that I believe are in danger: (1) those who advanced death threats or other threats of physical violence; (2) those who demanded unjustified board bannings or who agreed to such bannings; (3) those who engaged in tens of thousands of acts of defamation; and (4) those who threatened academic researchers or who were aware of threats made to academic researchers and who failed to do anything about it.

The number of people at risk is in the hundreds or perhaps in the thousands. I do not feel able to give a list of who will be sent to prison and who will not be sent to prison. That’s something we have to decide as a society. I am confident that my role will be to argue for fewer prison sentences and for shorter prison sentences that what most others are calling for.

The issue is just too big and too novel for me to feel up to giving any kind of a precise count.The best way to understand it is to look at a particular case. I think Mike Piper is a good case to look at. Mike is a fine blogger. He is smart. He is hard-working. He is helpful. He HATED the idea of banning honest posting at his blog. He directed a lot of energy to finding some other means of dealing with the situation. All that obviously counts AGAINST a prison sentence.

The other side of the story is that we will be seeing millions of people’s financial futures ruined because of the 11-year cover-up and Mike played an important role in keeping that cover-up going. He obviously knows that the Old School SWR studies don’t contain a valuations adjustment. He knows that Mel Linduaer is one of the leaders of the cover-up. He has acknowledged thinking that Mel is a jerk and has said that he doesn’t speak up against Mel only because he is afraid of him. All indications are that that is indeed so.

If you post claims about retirement planning at your blog that you know to be false and millions of people experience failed retirements as a result, that’s obviously financial fraud. In ordinary circumstances, you obviously risk going to jail by doing that. Are you excused if the most abusive poster in the history of the internet threatens to destroy your business and if you know from personal experience that this individual is capable of going through with his threat and if big names in the field indicate that they are going to side with the abusive poster? WHO THE HECK KNOWS?

No one has ever seen a case of financial fraud as big as this one, Anonymous. Perhaps Mike is going to prison, perhaps he is not. Perhaps it will be a short prison term, perhaps it will be a long one. No one knows.

I’ll tell you what I think. We are the luckiest generation of investors who ever walked Planet Earth. The peer-reviewed research that I co-authored with Wade Pfau shows us how to reduce the risk of stock investing by 70 percent. We shouldn’t be talking about how long Mike Piper’s prison sentence is going to be. We all should be working together to tap into the benefits of the amazing research findings of the past 32 years. We should all be working to bring the economic crisis to an immediate stop and to bring on the greatest period of economic growth in U.S. history. What’s the downside?

If Mike is not sent to prison, I expect to be working with him for many years to come. That one is easy. If Mike IS sent to prison, I obviously won’t be able to work with him. But I am going to feel bad about him being sent to prison despite being such a nice guy and such a smart guy. So I want there to be lots of posts in the record when Mike’s prison sentence is announced showing that I did everything in my power to bring his potential prison sentence to the attention of Mike and his friends and to implore them to do everything they could to see either that there is no prison sentence for Mike or that his prison sentence is as short as it can possibly be given today’s circumstances.

We all are going to have to live with ourselves following the next crash, Anonymous. I don’t think it is even a tiny bit responsible to hold off on talking about the prison sentences until the events that lock them into place have already taken place. I think the responsible thing to do is to talk about those prison sentences NOW and to do what can be done to get them reduced a bit NOW. So that’s what I do.

The only way to answer the questions you are posing is to look at history and see how things have gone down in the past. We know that Bernie Madoff is in prison. We know that with the 11-year cover-up of the errors in the Old School safe withdrawal rate studies we are looking at an act of financial fraud that makes what Madoff did look like a drop of water in the Atlantic ocean. So there is clearly a problem here.The other side of the story is that we have never seen a case of financial fraud as big as this. So we just cannot give details of what is going to happen with a high degree of confidence. We are in 100 percent uncharted waters.

I hope that helps a bit.

My best wishes.



  1. Anonymous says

    Will you invite Jack to ride on the float with you when they give you a ticker tape parade in New York City?

  2. Rob says

    In two seconds, Anonymous.

    That would be the fulfillment of a dream.

    That’s exactly how I would like to see this saga come to an end.


  3. Rob says

    Time will tell the tale, Anonymous.

    John Walter Russell certainly should be riding on that float.

    Wade Pfau will certainly be invited. I am highly confident that, when Wade hears that Jack is going to be there, Wade will feel safe accepting the invitation. So Wade will be there.

    Robert Shiller should be there. Valuation-Informed Indexing is the reformation of the ideas of Jack Bogle by the “revolutionary” (Shiller’s word) additions of Robert Shiller. So Shiller merits a place on the float.

    We don’t know today who is going to flip this. There’s going to be some blogger or journalist or economist or venture capitalist or policymaker or investing advisor who works up the courage to take on you Goons and who is going to flip the entire thing so that we all feel safe posting honestly on investment-related topics from that day forward. That person is going to be on the float.

    Everyone who has ever cared about giving accurate investing advice and about enriching people’s lives by doing so will be there in spirit.

    An argument could be made for having a representative of you Goons on the float. You Goons didn’t add to our knowledge in a direct way. But you showed us with your hate and anger and shame and envy what makes stock investing risky. The peer-reviewed research that I co-authored with Wade Pfau shows that it is by becoming aware of the role played by those ugly emotions that we transform stock investing into a virtually risk-free asset class. On first impression it seems impossible that we could reduce risk by 70 percent just by being willing to abandon Buy-and-Hold strategies and instead begin exercising price discipline when buying stocks. The behavior of you Goons shows why that truth has eluded so many of us for so long and why making that one change makes such an amazing difference. So why not have your goonishness reflected in the public display of our victory over our lower selves?

    We’re all in this together, Anonymous. We all have no choice but to give recognition to the findings of the last 33 years of peer-reviewed academic research. And we all have played different roles in taking us from the investing strategy of the past (Buy-and-Hold) to the investing strategy of the future (Valuation-Informed Indexing).

    My job is to see that the transition takes place as quickly and as smoothly and as lovingly as possible. You see yours as seeing that the transition takes place as slowly and as wretchedly and as painfully as possible. But love beats hate in the end. Every time. So I (that is, all of us) will win in the end.

    You’ll be represented on the float. But the representation provided will be an honest one. So, for as long as you act only out of hate, that is what the representation provided will need to show. The representation of your behavior can improve only when your behavior improves. We all have been wishing for that for a long time. But we need to act with more forcefulness and love to make what we have all long wished for a reality.

    The next price crash will melt Jack Bogle’s heart. In all likelihood, that’s how the ugly side of this will be brought to an end. At that point, you won’t have any options remaining to you. Those who care for you ask you once again today not to let it come to that before doing what the good part of you has longed to do for a long, long time now.

    My best wishes, Goon friend.


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