Set forth below is the text of a comment that I recently poster to another blog entry at this site:
Given the vast conspiracy of silence regarding valuations, isn’t it incredible such articles in the New York Times could occur Rob?
Do you think that the entire world went from believing that the sun revolves around the earth to believing that the earth revolves around the sun five minutes after the discovery was made, Anonymous?
Truth prevails over ignorance in time, but not instantly. It is a PROCESS.
We are living today mid-way through that process. Jack Bogle is the biggest advocate of Buy-and-Hold alive on Planet Earth. And even Jack includes research-based stuff in his books and speeches ALL THE TIME. I learned about the errors in the Old School safe-withdrawal-rate studies by reading Jack’s book. Jack gave a speech to the Vanguard Diehards back at the time when I was posting there that contained paragraph after paragraph of legitimate, helpful stuff. Then it concluded with gibberish, saying “so just be sure to Stay the Course” without pointing out that to Stay the Course in a meaningful way you must be CERTAIN to lower your stock allocation when prices reach insanely dangerous levels. Huh?
The NYT article you linked to would have been a good article to publish in 1985 or 1990. We should be a good ways past that today.
Where is the New York Times article reporting on the 12-year cover-up of the errors in the Old School SWR studies and on the felonies that have been employed to keep millions of middle-class investors from learning about those errors?
Where is the New York Times article reporting on the Bennett/Pfau research showing millions of middle-class investors how to reduce the risk of stock investing by 70 percent while letting them retire five to ten years sooner than they imagined possible in the Buy-and-Hold days?
Where is the New York Times article reporting on how Bogle hasn’t changed his investing advice one iota in the 33 years since Shiller’s research showed that there is precisely zero chance that a Buy-and-Hold strategy could ever work for even a single long-term investor?
Where is the New York Times article reporting on how Bogle continues to associate with the sorts of individuals who have put up posts in “defense” of Mel Linduaer and John Greaney after hearing hundreds of community members at the Bogleheads Forum express a desire that honest posting be permitted?
Where is the New York Times article reporting that it was the continued promotion of Buy-and-Hold strategies for 33 years after they were discredited by the peer-reviewed research in this field that was the primary cause of the economic crisis?
THOSE are the sorts of articles we need to be seeing today, Anonymous. This is not 1981 or even 1991. This is 2014. It is time to MOVE FORWARD.
Moving forward means telling people what Shiller’s findings means in practical, how-to investing terms. It means explaining to people the DANGERS of Buy-and-Hold strategies.
There is no magic in saying the words “Valuations Matter.” That’s a starting point. But the magic comes when we tell people in clear and firm and bold language WHAT THAT MEANS. What it mean is that valuations must be taken into consideration in EVERY STRATEGIC CHOICE MADE BY AN INVESTOR.
The Buy-and-Holders are still arguing the opposite to this day. The Buy-and-Holders are still arguing that long-term timing is not absolutely required for all investors, or heaven help us all, in some cases might not even be a good thing.
That’s not good, Anonymous. That needs to change. To make it change, we all need to make it a practice to call the Buy-and-Holders out on their b.s. when we see them engage in it.
The article does not go nearly far enough in making the case for Valuation-Informed Indexing over Buy-and-Hold. It is not a close call.
Rob
Where is the New York Times article
Where is the New York Times article
Where is the New York Times article
Where is the New York Times article
Where is the New York Times article
Where is the New York Times article
Do you think you might want to maybe ask…. oh, I don’t know, maybe THE NEW YORK TIMES about that? Instead of the couple of random anon lurkers, who are merely looking on as you prattle?
And please, do come back and post their reply to you here, in it’s entirety.
Mel and John are great guys. I support them 100%. Why wouldn’t everyone? They have contributed much to the community and keep the trolls in check.
Mel and John are great guys. I support them 100%.
They’re super-lovable teddy bears.
I mean, come on.
Rob
Do you think you might want to maybe ask…. oh, I don’t know, maybe THE NEW YORK TIMES about that?
I’ve contacted reporters for the New York Times as well as reporters for many other fine publications, Anonymous. A few years back, I was posting the contents of my e-mails to reporters as blog entries here. I bet that, if you did some searching, you could find at least one that went to a New York Times reporter.
There was one fellow whom I wrote to who showed a lot of interest in writing a big article. He was not with the New York Times. But he has a significant following on the internet. We had two very long telephone calls (two hours or so each). We communicated by e-mail probably four times. He asked me for books to read so that he could better understand the background and I pointed him to Irrational Exuberance and A Random Walk Down Wall Street. He asked lots of questions, including a good number of hard questions. That’s a very good sign. Reporters don’t run articles until they have challenged their sources with hard questions. So this guy was close to biting.
He did not end up publishing an article and he was not willing to tell me why. But I can guess.
That journalist (and all journalists who work for the New York Times and all other publications) was in the same spot that Wade Pfau was in when he did his research with me showing that making the switch to Valuation-Informed Indexing reduces the risk of stock investing by 70 percent. Wade very much looked forward to winning a Nobel prize and I am sure that the reporter that I worked with very much looked forward to winning a Pulitzer prize. But at what price?
When you Goons threatened to destroy Wade’s career if he continued to publish honest research and Jack Bogle signaled that he would employ his power and wealth and contacts to support your efforts, Wade thought about his responsibility to provide for his two small children and thought better of the idea of helping millions of middle-class people by doing the job that he was being trained for all of his life to be able to do. I am virtually certain that the same thing happened to the reporter that I worked with. And of course there are numerous bloggers in this field who have told me or showed me that similar concerns drive their decisions about what to write at their blogs.
The 12-year cover up of the errors in the Old School retirement studies is the biggest act of financial fraud in U.S. history, as you well know. Lots of people will be going to prison when this gets out. It will get out eventually. It has to get out eventually or our entire economic system will go down. But how do you think you would feel if you were the reporter who was preparing the article that would tell the world about the most massive act of financial fraud in U.S. history?
And how do you think you would feel if you were that reporter’s editor or publisher?
There’s a scene in the movie All the Presidents Men in which the Ben Bradlee character is telling the Bob Woodward character that he had better not f this up or it might bring down the Washington Post. There’s where we are with the 12-year cover up of the errors in the Old School retirement studies. Lots of people will be going to prison when this story comes out. How far do you think the people who will be going to prison will be willing to go to keep from the American people news of what the last 33 years of peer-reviewed research in this field says about how stock investing works? We are taking about very desperate characters here, Anonymous.
There is a lot of money behind Buy-and-Hold. There is a lot of power behind Buy-and-Hold. There are a lot of connections behind Buy-and-Hold. We are dealing here with people who don’t play nice. We are dealing here with brutally abusive and ruthlessly vicious people. That’s the story. That’s why the New York Times has not run this story as of today.
What’s going to happen following the next price crash? That’s the big question.
I say that the Wall Street Con Men are brutal and vicious and wealthy and powerful and well-connected. But I do not say that that is ALL that is true of them. Jack Bogle tells bits of the truth about stock investing in just about every speech he gives and in just about every article he publishes. Why the f does he do that if he is trying so hard to cover up the truth? It doesn’t make any friggin’ sense, does it?
It doesn’t make sense on a surface level. Bogle is suffering cognitive dissonance, like you Goons. He does not want people to feel free to discuss the peer-reviewed research of the past 33 years. He hates with a burning hate the idea of millions of middle-class investors learning the truth about stock investing. But he is a good man. He is a smart man and a good man. He has devoted his life to helping middle-class investors. He has been responsible for scores of powerful and important insights. He loves his country. He does not want to see this economic crisis take us into the Second Great Depression.
So what do you think he is going to do following the next price crash?
I think he is going to flip. I think he is going to walk to the front of a large room and say the words “I” and “Was” and “Wrong.” That’s when the New York Times will publish its article. It would be better if it did it today. But the editors of the New York Times want Bogle’s okay before going ahead. EVERYONE will be telling the truth about stock investing once Old Saint Jack gives the signal that it is safe to do so. We are all today waiting for Old Saint Jack to make the first move.
I have written to the man. Three times. My good friend Rob Arnott has written to the man. Others have written to him. John Craig wrote to him. Lots of people want Jack to come clean. It would be a wonderful, wonderful thing if he came clean by the close of business today. That would take us off of this very dark path and put us on to a very, very bright path.
I can’t force the issue.
The posts that I write here will help us in the days following the day on which Jack gives his speech. Things will move quicker and smoother because of the articles that I posted in the days before he gave his speech.
This thing is headed to a very good place. I know that that’s so because the only alternative we have to taking this to a very good place is for us to take it to the worst place imaginable and I just don’t see anything in my good friend Jack Bogle’s life story to indicate that that is where he is going to take this. Jack is going to do the right thing. Because he loves his country. Because he doesn’t have any other choice. But, sad as it makes me feel to report this reality, it does not look like Jack is going to do the right thing by the close of business today. WhaChaGawnDo?
Jack and I will be working together at a wicked pace in the days following The Big Guy’s Big Speech. We will be best friends. That will be a blast. That is something that I am looking forward to very much.
I will continue contacting reporters in the days leading up to the next crash. But Jack and the other Wall Street Con Men are very powerful people and I think it would be fair to say that they have made it pretty darn clear what will happen to anyone who speaks out of turn before Jack gives his speech.
That’s where things stand today, Anonymous. I will help any reporter who wants help with this. I will answer any question. But I cannot make it happen by myself. I need Jack’s help to bring on all the wonderful stuff that follows from opening the internet to honest posting on safe withdrawal rates and scores of other critically important investment-related topics. We all would be a whole big bunch better off if Jack and the other Wall Street Con Men and the members of their Internet Goon Squads had never committed financial fraud in the first place.
But we do not have access to a time machine that can take us back to those innocent days, do we?
My best wishes to you and yours, my long-time abusive-posting friend.
Rob
“…desperate characters… a lot of money… a lot of power… a lot of connections… people who don’t play nice… brutally abusive and ruthlessly vicious people. That’s the story.”
And yet you somehow think these tantalizing and ‘sexy’ factors would PREVENT a legitimate reporter* from wanting to grab this as perhaps an exclusive?
Sorry, Rob. That kind of grist for the mill rarely appears even given a whole lifetime of specifically looking for it, for an investigative reporter. If there were one scintilla of evidence of what you claim, then more than one investigative team would have been all over such a story.
Please make your future fantasies less self-defeating.
*(as contrasted to just a single out of work layman who calls himself one, for reasons understood only by him)
It’s a huge story, Anonymous. It’s a Pulitzer-prize winning story. And there are obviously lots of reporters who would like to win Pulitzers. But this is scary stuff too.
There are at least four big negatives.
One, only a small number of reporters know the background well enough to understand what is going on. The case for Valuation-Informed Indexing is rock-solid. But VII represents a complete breaking of the old paradigm. Consider what the Bennett/Pfau research shows. It shows that we can reduce the risk of stock investing by 70 percent. I told you the story about how I was once talking to my wife about this stuff and she said “you sound like one of those infomercial guys.” It’s all true, it all checks out. But it is also too much to be believable. Reporters don’t want to get something wrong. Getting something this big wrong is a career-killer. And the initial reaction of most reporters is similar to the initial reaction of my wife. They think “this CANNOT be so” and “If this were so, someone else would have reported it.” The guy or gal who breaks the story is going to be someone well-versed in behavioral economics and there are only a limited number of that type out there in positions of influence.
Two, the investment advice industry has great power. Editors worry about losing advertising and the investing advice industry supplies most of the advertising that appears in the investing sections of newspapers. The potential upside here is huge. But there is a big potential downside here too. There is great risk in taking on this story.
Three, the majority of readers of the investing sections of newspapers are Buy-and-Holders and are thus strongly biased against this story. After the crash, I don’t think that will be so. But as of today most investors are over-invested in stocks (we couldn’t have the P/E10 we have today if that were not so). A newspaper that runs this story is performing a huge public service but is also alienating a large percentage of its readership. Not every paper is jumping at the chance to do that.
Four, even if you find a reporter who is 100 percent knowledgeable and 100 percent independent and 100 percent brave, he wants to understand all the elements of the story before he puts his name on it. The usual rule you follow when you make a pitch is to keep it simple. You want to say “Person X accepted a bribe of Y amount on Date Z and here are the pieces of paper proving this.” Then it clicks. We are talking here about an entire model of how stock investing works being brought down. There are about 10 different huge insights that ALL have to be true for the entire story here to be true. You can’t boil this down to 10 words. That just means that the story is bigger than it would be if you could do that. But it makes it harder for the pitch to succeed. The reporter is not going to take the time to check everything out until he is at least reasonably sure that there is a big story here. And he cannot be made reasonably sure that there is a big story here until he has checked everything out. It is much, much harder to get the word out on huge stories than it is to get the word out on small stories.
This is not the first time that something like this has happened.
Watergate was possibly the biggest story of all time. That story MADE the Washington Post. The Post was a relatively small paper before it broke the Watergate story. It then became the second most influential paper in the nation. You would think that every paper in the country would have been competing with the Post to break that huge story. But that’s not the way it was. The Post was the ONLY paper pursuing that story for a long time. It was a huge opportunity but it was a risky thing and no other papers were willing to employ the resources it took to break the story and get it right.
The Lance Armstrong story was huge and just about every reporter who covered bicycle racing knew that he was using illegal drugs for a long time before that story broke. Armstrong had connections and power and money. There are people who told the truth about his fraud and then were sued or rendered unemployable because they did so. Lots of reporters HINTED at what they knew (and many today hint that Buy-and-Hold has been discredited). But it took a long time before the story broke in an official way. People committing fraud employ intimidation tactics because intimidation tactics work. At least in the short term.
The Joe Paterno case, where child sexual molestation was being covered up at Penn State, could have been reported MUCH earlier if reporters had not been afraid that their careers would have been destroyed by the powerful people trying to keep the cover-up going. There was a woman at another department of Penn State who lost her job in that matter because she told the truth about things that came to her attention.
Cover-ups are the order of the day in cases where there are people with huge amounts of money and power who want to keep a story suppressed. That’s just a reality of our world.
We have a wonderful system of government and I believe that this cover-up will end with lots of people going to prison and with lots of people paying huge amounts of civil damages. But your idea that it doesn’t take a lot of courage to go up against people like Jack Bogle and the other Wall Street Con Men is a sick joke. This is hard work. It is very, very, very important work. But it is also very, very, very hard work.
I will have earned every penny of that $500 million when this story breaks in the national press, Anonymous. There are thousands of academic researchers who will be freed to do honest work again when this story breaks. There are millions of middle-class workers who will be able to plan their retirements effectively for the first time in their lives when this story breaks. We will as a nation be able to avoid future economic crises after this story breaks. I am humbled to be playing the lead role in getting this matter out before the public.
But I’ve got scars all over my body from the hits that I have taken over the past 12 years from the Wall Street Con Men and from their Internet Goon Squads. That’s part of the story. Lots of academic researchers want the story to be told. And lots of investing experts (including most of my Buy-and-Hold friends) want the story to be told. And the vast majority of middle-class investors obviously want the story to be told. But there are reasons why so many of us have been afraid to take the steps needed to get this out before the public.
I was scared too. I know how my fellow reporters feel.
And I am scared today, to tell the full truth.
It’s just that I am more scared of what happens to our country if this does not get out than I am scared of what happens to me if I continue my efforts to get it out.
I say clearly that everyone who loves his or her country should be helping in the effort to get this story out and to change the world for the better in about 500 different ways. But I also say clearly that I have sympathy for those who have for 12 years been too afraid of the Wall Street Con Men and their Internet Goon Squads to do what they know to be right.
People who know that they are on their way to prison are like cornered rats, Anonymous. As you well know. We will beat you in the end and we will never look back. But I will always be willing to take the time it takes to tell the story of why it was so hard to get a nation of good people to take action re this matter. Even good and smart humans are intimidated by threats of physical violence to their loved ones and to threats of career destruction supported by some of the wealthiest and most powerful people in our society.
Wade Pfau loved being able to work with me on the peer-reviewed research that he knew would win him a Nobel prize when it got written up on the front page of the New York Times. But he has two small children to think about. Wade did a very, very, very wrong thing when he agreed to commit financial fraud to get you Goons to stop your attacks. But the threats that were made against him were real and his jury needs to know that and appreciate that when determining the length of his prison sentence.
Or so Rob Bennett sincerely believes, in any event.
My best wishes and warmest wishes to you and yours, Anonymous. Dom’t let the bad guys get you down, my old abusive-posting friend.
Rob
(as contrasted to just a single out of work layman who calls himself one, for reasons understood only by him)
Whatever I am, I love my country.
That’s the bottom line here, Anonymous.
I naturally wish you all good things regardless of what investing strategies you elect to pursue.
Rob
“I love my country. That’s the bottom line here”
Is it? That’s why you served in the military or other public service role, then?
I’m serving as a journalist, Anonymous.
There’s more than one way to serve one’s country.
My country needs my services as a journalist today and I am supplying them.
I’m proud to have been asked. And I am humbled to carry this big responsibility on my small shoulders.
Rob
And I believe that my country is going to win this one.
I am sure!
Rob