Set forth below is the text of a comment that I recently posted to another blog entry at this site:
How do you feel about people you meet who make such enormously boastful (and in this case easily disprovable) statements? Are you attracted to those people? Do such antisocial behaviors earn them many friends?
People don’t like boasting. That’s certainly so.
But those words are required by the job I am doing here, Anonymous.
The Buy-and-Holders are in a trap. When the peer-reviewed research showing they were wrong was published, they were shocked. They found it hard to accept that they were wrong.
Given those circumstances, the best reaction would have been to present their ideas in a more humble way. They could have said: “This is what we think, but there is another school of thought in which good and smart people come to very different conclusions.”
They didn’t play it that way. They elected to double down on the arrogance. So now they are in a fix. The evidence that valuations matter is no so great that they want to acknowledge it and to open the internet to honest discussions and to let people find their way to the truth through the normal means of testing different ideas and determining over time which make the most sense. But they feel that to do that would mean huge legal liabilities given how long the cover-up has gone on. They can see that the cover-up cannot be sustained much longer. But they cannot bear the thought of taking on trillions in legal liabilities or going to prison. They cannot move!
While the Buy-and-Holders are frozen in place, knowledge of the error they made continues to spread. Shiller’s book was a best-seller. It is in most public libraries. It was in the news that he won the Nobel prize. People have heard about the economic crisis and they sense on some level of consciousness that the insane bull market must have had something to do with it.
So it is getting harder and harder to maintain the cover-up. The Buy-and-Holders have had to become more and more brutal in their intimidation tactics to keep everything from falling apart. This general dynamic (not as strong) was in place when I came on the scene on the morning of May 13, 2002.
I never went to investing school. I never managed a big fund. I am not a dummy. I possess at least average intelligence, but not a great deal more. I should not be able to do the things that I have done. I should not be able to revolutionize this field (Shiller was responsible for the revolutionary theory but I am the one who showed what that theory says about day-to-day investing decisions). I shouldn’t have been the one to point out the errors in the Old School SWR studies. Without the massive cover-up, someone else would have done that long before I came on the scene. I should not have been able to serve as co-author of the most important piece of peer-reviewed research published in this field in 30 years. All of that stuff is crazy stuff that in ordinary circumstances never could have happened.
I wasn’t responsible for the crazy circumstances into which I was thrust, Anonymous. It wasn’t like I woke up one day and said to myself: “I know what I’ll do, why don’t I go revolutionize the field of stock investing>?”
I was the lead poster at an exciting discussion board at Motley Fool. We had an insanely abusive individual posting at that board. He shoved his discredited SWR study down our throats on a daily basis. I had responsibilities re that board community. I didn’t go looking for trouble. I was backed into a corner and left with no other option but to bring this fellow down or see the entire community go down. So I posted what I knew about safe withdrawal rates (which I learned not because I am a super-genius but because I read things that most people don’t read in the course of planning my own early retirement). That’s what set everything off.
I didn’t expect a 12-year saga. I knew that Greaney would respond in an abusive manner. But we were talking about the calculation of a number. And this was a board filled with people re which the accurate calculation of that number was a matter of great significance. So I figured that I would be in for two days worth of heat, three at the most. I figured that I could handle that if it meant getting the board back on the right track. So I pushed the “Submit” button.
I obviously discovered something that I didn’t expect. I discovered two things, actually. I discovered that a large percentage of the population possesses doubts about the conventional investing advice and a desire to learn about new ideas in this field. Nothing could be more clear from the shower of praise that I saw from hundreds of my fellow community members. And I discovered that the Buy-and-Holders are in great emotional pain because they too feel these doubts but cannot bear to given them serious consideration or even to see others give them serious consideration if they are within hearing distance.
No one ever talks about the intense emotional pain of the Buy-and-Holders. I don’t think there is one article in the literature about it. Nothing in the peer-reviewed journals. No blogs explore the phenomenon. Nothing in the magazines or newspapers. But here it was. I was seeing it with my own eyes. And it obviously was a very important reality. Buy-and-Hold is marketed as a research-based strategy. If it is research-based, it should be lessening investor emotion. But it is doing the opposite. Investors have become MORE emotional in the Buy-and-Hold Era. This got my attention.
It REALLY got my attention on the evening of August 27, 2002. That’s the night that Greaney put forward his first death threats. There were about 50 community members who gave voice to negative feelings about this (that’s roughly the number that endorsed a post by FoolMeOnce saying that the board has become something that no longer merited the support of people with self-respect). But there was another post by Greaney that won 200 endorsements a short time later. So the MAJORITY of the board was fine with death threats if that is what it took to stop people from challenging the Buy-and-Hold dogmas. Yikes!
Forget Shiller! You don’t need data to show that Buy-and-Hold is a big pile of smelly garbage if you have 200 votes for death threats. That was the night that I stopped thinking of myself as a Buy-and-Holder. Buy-and-Hold CANNOT be research-based if it generates that sort of reaction in that many people. It HAS to be emotion-based.
Ever since, I have devoted myself to developing and promoting the Valuation-Informed Indexing concept. Shiller has never even bothered to give a name to his model. It must have a name if it is going to grow. So I gave it a name. And I went about the business of developing it, adding insight upon insight by doing new research or encouraging others to do new research or by thinking through implications on long walks or by talking things over with both experts and ordinary investors on discussion boards or whatever. I learned a lot by recording the 200 RobCasts that I recorded. I would push the “Record” button and, as I talked about one topic, I would find my thoughts wandering to another topic and the next thing you know, I would have a new insight and an idea for a new RobCast! It has been an exciting process.
It shouldn’t have been possible for me to have earned all those accolades. But it WAS possible because I have been exploring The Great Unexplored Continent of Investing Insights. Most people in this field work on the numbers side. The idea is that that is the hard side and so that is what earns you respect. But the numbers stuff has been done to death. It is on the emotions side where all the action is. People trying to advance in this field don’t work that side because it is treated either with contempt or indifference by most of the people who focus on numbers. Because so few have been working it, there are THOUSANDS of low-hanging insights to be picked from the Investor Emotion Trees. I just keep picking them, one after another after another. Why shouldn’t I?
LOTS of people want to get in on the action. My sense is that just about everybody does, including my good friend Jack Bogle. It’s only the brutal intimidation tactics of the Buy-and-Hold Mafia that stop them. People want to mine the insights because they know it will make them rich and famous to do so. But they hold back because the Buy-and-Hold Mafia will destroy their careers if they come up with anything too good. All of the truly good stuff shows how dangerous Buy-and-Hold is. So it’s the good stuff that the Buy-and-Holders hate with a burning hate.
EVERYONE wants to make the transition to Valuation-Informed Indexing. But no one can figure out how to pin the bell on the cat. That’s the state of play in the investing advice field in 2014.
I’m like everyone else. I cannot figure out how to pin the bell on the cat either. But I get it loud and clear that we all must pull together to do so or else go over a cliff. So I am not about to waste my time working a model that has been discredited for 33 years now. If as a society we come to our senses and elect to bring the economic crisis to an end, I have 12 years of work that will help us bring on the greatest period of economic growth in our history. If we elect to go over the cliff, that’s just the way it is. It makes me sad to think that that might happen. But there’s not a thing that I can do about it that I haven’t already tried to do. So it’s one of those things that I just have to accept.
Given that background, it is essential that I quote the amazing outpouring of praise that my work has generated. There is no other blogger on the internet who has won for himself even a fraction of the praise that I have won. Why? Because all those people praising me want to see us get to the other side of the river. They want to come clean. They want to do productive work. They want to help people. They want to join in an effort to bury Buy-and-Hold 30 feet in the ground, where it can do no further harm to humans and other living things.
When I quote the praise that my work has won, I am not bragging about my own accomplishments. I am bragging about the government system under which we live, which permits and encourages such huge breakthroughs. I am bragging about the thousands of fine people who have helped me out every step of the way. I am bragging about the Buy-and-Hold Pioneers, who started out with a wonderful idea and who made hugely positive contributions before their false pride caused them to fall off the right track.
I am bragging about human nature itself! We are NOT doomed to fall into Get Rich Quick thinking over and over and over again. I hear that all the time. People say “why do you fight Rob, don’t you see that people are just weak?” No! People LOVE hearing about true research-based strategies! The only problem today is that they want to hear recognized experts confirm all that I have come up with. Once Bogle gives his “I Was Wrong” speech, my site will be the most popular site on the internet. We have seen huge interest in these ideas at every board and blog at which I have posted for 12 years until you Goons entered the picture to poison things. People WANT to overcome their Get Rich Quick impulse. Once the experts acknowledge their responsibility to help them do so, it’s over. Get Rich Quick/Buy-and-Hold investing is a thing of the past once Bogle gives his speech.
So it is right for me to cite the amazing amounts of praise that my work has won for itself. I am part of a community. Praise for my work is not praise for me along. It is praise for all who have made positive contributions. That’s thousands and thousands of people.
Our story is a positive one. The transition from Buy-and-Hold to Valuation-Informed Indexing is the biggest advance in the history of personal finance. There is nothing else in even a remotely close second place. It wasn’t Rob Bennett alone who made that happen. Robert Shiller played a huge role. John Walter Russell played a huge role. Wade Pfau played a huge role. Jack Bogle played a huge role. Bill Bernstein played a huge role. Andrew Smithers played a huge role. Ed Easterling played a huge role. And on and on and on.
Praise for Rob Bennett’s work is praise for all those people. And praise for Rob Bennett’s work is praise for every middle-class investor who ever expressed a desire for a truly smart and safe and simple way to invest in stocks that works. It’s my desire to give those people what they want and need that drives me. I never would have made it this far without the thousands of kind and warm and generous posts that those people put up in support of my efforts in the face of the most brutal intimidation tactics imaginable from you Goons.
So I will soldier on, Anonynous. And, yes, I will tell the positive side of the tale. You live in hate. But millions of your fellow community members live in love. And love will triumph over hate on the final page of this saga.
How do I know? I know because it always does. The first time hate triumphs is the time we all go down to a dark, dark place.
Not this boy!
No can do!
I can’t go for that!
My best wishes to you, my old Goon friend.