Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Maybe a better question is this: Which specific financial experts will NOT be going to prison in your opinion?
There’s a concept that is referred to in the law books as “industry practice” or “industry standard” or something like that. The idea is that one indicator of fraud is engaging in behavior outside the norm of the field in which you work.
That concept won’t do the job in the investing advice field. The entire industry is corrupt. We have known for 33 years that there is zero chance that a Buy-and-Hold strategy can ever work for even a single long-term investor. But people in the field noticed that the pure Get Rich Quick approach brings in the bucks just fine, peer-reviewed research be danged.
The standard here has to be broader. We certainly don’t permit 12-year cover-ups of errors in studies that people use for an important purpose in any other field. And we obviously adopted the laws against financial fraud for a reason. If we are going to send Bernie Madoff to prison, it’s more than a little hard to justify not doing the same for the sorts of individuals who have put forward posts in “defense” of Mel Linduaer and John Greaney, who obviously have caused 500 times the human misery.
We can’t send everyone in the field to prison. It’s not practical.
But I think it’s fair to say that the millions of people whose lives have been destroyed are not going to be in a terribly forgiving mood when they learn about the 12-year cover-up. So we are going to need to see action that insures beyond any doubt whatsoever that a message will be sent strong enough to insure that nothing like this will ever happen again.
My guess is that, soon after the next price crash, a number of people will come forward. They will say that their consciences just will not permit them to keep quiet any longer. Then there will be a deluge of truth-telling. . Lots of people will be hoping that by coming forward early, they will either be able to avoid prison or limit their sentences significantly. And It Will Be Clear That the Buy-and-Hold Mafia Just Does Not Have the Power to Maintain the Cover-Up Any Longer.
We will see a media frenzy. That will lead to congressional hearings.
My guess is that there will be responsible people who will come forward with the aim of bringing the nasty side of things to a quick end so that we can all get about the business of taking advantage of the wonderful research findings that the Buy-and-Hold Mafia has been denying us for 33 years now. It wouldn’t surprise me if Congress adopted some form of amnesty for advisors who recommended Buy-and-Hold strategies but who did not show any evidence of bad intent.
I believe that the prison sentences will largely be limited to those who advanced threats of physical violence or who made demands for unjustified board bannings or who advanced hundreds of acts of defamation or who participated in or covered up threats of physical violence against academic researchers. I don’t think that we will be hearing any objections to long prison sentences for those sorts of individuals. It might be that there are other sorts of insanely abusive behavior that has been going on behind the scenes and that that will come out when people are coming forward with honest accounts in an effort to save their skins. But it would be the same general sort of behavior we would be talking about. People don’t care about people making mistakes. People get angry when people are dishonest and when they engage in a cover-up. It’s the people who have engaged in clear acts of dishonesty or cover-ups who should be most concerned about their futures, in my assessment. That means you, Anonymous!
Once the first prison sentences are announced, I believe that all the ugly stuff will come to a quick end. We will see a total reversal. We live in the most exciting time to be an investor in the history of the planet. There are billions of dollars to be made providing millions of middle-class investors with tools that are consistent with what we have learned from the peer-reviewed research over the past three decades. Once there is an announcement of ANY prison sentences, we will be seeing good stuff piled on top of good stuff piled on top of good stuff.
It may take decades for all the criminal and civil cases to work their way through the system. Does it really matter all that much? The good stuff here is 50 times more good than the bad stuff is bad. I think that will be the focus for all except those personally involved in the criminal and civil cases. I obviously cannot say how each case will be resolved. It is going to depend on the behavior of the individuals involved. There will be testimony taken at trials. That’s how the system works, no?
I ain’t going to prison! I know that much! There is no one else alive who has done as much to rein in you Goons as I have. There is no one in a close second place.
Fair enough, Anonymous?
Take care, man.
Rob
1. Soon After the Next Crash, A Number of People Will Say That Their Consciences Will Just Not Permit Them to Keep Quiet Any Longer.
2. Then There Will Be a Deluge of Truth-Telling.
3. Lots of People Will Be Hoping That By Coming Forward Early, They Will Be Able to Avoid Prison.
4. We Will See a Media Frenzy.
5. That Will Lead to Congressional Hearings.
5 sentences.
Each one containing a prediction about the future.
Your track record with predictions is terrible.
You will most likely go 0 for 5 with this lot.
I said on the morning of May 13, 2002, that the numbers in the Old School safe-withdrawal-rate studies were wildly wrong.
You Goons said that I must have forgotten to take my meds.
Ten years later, the Wall Street Journal published an article saying that the numbers in the Old School safe-withdrawal-rate studies were wildly wrong.
I think that my record on “predictions” is pretty darn good.
The reason why my record is so good is that the only things that I “predict” are things that have already happened. There was no prediction needed to see that Greaney’s retirement study did not contain an adjustment for the valuation level that applied on the day the retirement began.
The only reason why millions of others did not notice the lack of a valuation adjustment in the Old School retirement studies is that millions of others want to believe those numbers on the bottom of their retirement statements so badly that they lie to themselves about what the peer-reviewed research in this field tells us. That’s the entire story here, Evidence.
Us humans are prone to self-deception. Self-deception is what makes stock investing risky. We learned that intellectually in 1981. But we have permitted our emotions to dominate our intellects for 33 years now. Not because we are bad or stupid. Because we are humans. Humans have been known to do that sort of thing from time to time.
My job is to free the humans to enjoy their good fortune in happening to be the luckiest generation of investors who ever walked Planet Earth.
If my prediction track-record were so poor, you wouldn’t be here today, If you hadn’t noticed how many people were impressed with my work, you would have been long gone by no.
I had a big-shot financial advisor call me on the telephone yesterday and talk to me for over an hour about this stuff. I had the same thing happen with a different big-shot financial advisor last week. Both are changing their business models because of what they learned from this site and because of what they learned in their conversations with me. That sort of thing does not happen to people who have a track-record of always getting their predictions wrong.
You’re a liar, Evidence. You have the power and the wealth of the Wall Street Con Men backing you up. So you have been able to get away with your lies for a longer time than I would have thought possible. But I do not believe that you will get away with those lies indefinitely. I think that when the human misery that you are causing grows so great that people will feel that they have no choice but to work up the courage to stand up to the Wall Street Con Men, you will find yourself in a prison cell. At that time I will be able to turn to these words and reassure myself that I did everything in my power to help my friend.
Do what you want, you know?
You are scared or you wouldn’t be here. I know that. You know that. But you are a Goon and you are incapable of taking a constructive and positive and life-affirming step. You and I both know that too.
So it is what it is.
I don’t like it. But I accept it.
If you ever come to accept it, you will stop posting here. You will just wait to see how it plays out.
You are welcome to continue posting here. I will continue to delete a good number of your posts. But I don’t believe in this business of banning people. I believe that even the worst of you Goons can come up with good stuff on occasion and what I have seen here for 12 years now confirms that belief. So you are free to continue.
But I am not going to lie to you and say that I am persuaded that you are not afraid of going to prison. Not this boy.
You have my best and warmest wishes, in any event.
Rob
We all didn’t get it before, but now that you have repeated it for the 1,256,779th time, we finally get it. We will go ahead and contact the press and make sure your face is on the front page of the New York times tomorrow. We are setting up a stage in Times Square so that we can have all the leading financial experts come forward and tell the world that they were wrong and you were right. Each us are bringing checks to hand to you. Not sure if the total will hit $500 million, but we are trying. Can you meet us at 9 am tomorrow in times square?
Thanks, Entire World. That sounds groovy.
I’ve noticed that it’s often the 1,256,779th iteration of a point that does the trick.
I knew that you would come around in the end!
Rob
I said on the morning of May 13, 2002, that the numbers in the Old School safe-withdrawal-rate studies were wildly wrong.
You Goons said that I must have forgotten to take my meds.
Here is a link to the thread in question.
http://boards.fool.com/price-adjusted-safe-withdrawal-rates-17209214.aspx?sort=whole
and a juicy excerpt or two
” As I read the data, it appeared to me that had I made an 80 percent stock allocation in 1969, I would now (31 years later) have lost all of my investment and be bankrupt. Is that true? It’s possible that I don’t understand how the calculator works, but that result was disturbing to me. The actual portflio figure that the calculator gave was that I would now have a negative $31,035. I don’t understand the concept of a negative portfolio value. That’s what makes me a little uncertain as to whether I am reading the results correctly.”
and
“I was wrong and intercst was right. Please read my apology to him and to the board in general at this link:
http://boards.fool.com/Message.asp?mid=17225279 “
And yet the Wall Street Journal and the Economist magazine and Smart Money magazine and the Financial Mentor site and even Vanguard said 10 years later that I was right afterall.
Doesn’t that tell the entire story, Evidence?
I really was right in my May 13, 2002, post in saying that Greaney’s study (and in fact all of the Old School studies) lacked a valuation adjustment. That was a big deal. That was a big advance.
But I am human like all the others and social pressure caused me to doubt myself.
Just as Bogle has doubted himself when his common sense has told me that Buy-and-Hold is a big pile of smelly garbage. And as Bernstein has doubted himself. And as Piper has doubted himself. And as Pfau has doubted himself. And as Shiller has doubted himself.
We achieved the greatest intellectual breakthrough in the history of investing analysis 33 years ago.
And we have spent 33 years doubting whether what we learned was really so and therefore denying ourselves the ability to explore all of the many wonderful implications of what we learned by denying ourselves the freedom to talk about what we learned and thereby THINK THROUGH TOGETHER what we learned.
Well, it stops here and it stops now and it stops with me.
No offense.
But we need to get this right.
I am not going to settle for anything less.
Following the next crash, there are going to be a lot of good and smart people who are going to work up the courage to stand with me.
That’s that.
You can bet against us if you want, Evidence. That’s betting against your country. That’s betting against science. That’s betting against the future.
Given that you have committed felonies as part of your effort to make sure that we don’t learn what we need to learn, that choice will be putting you in prison following the next crash.
I ain’t betting against us.
No way, no how.
I am leading the charge forward.
That’s where things stand.
I naturally wish you all good things.
Rob
“I had a big-shot financial advisor call me on the telephone yesterday and talk to me for over an hour about this stuff. I had the same thing happen with a different big-shot financial advisor last week. Both are changing their business models because of what they learned from this site and because of what they learned in their conversations with me.”
When can we expect to see you make a post listing their names and a description of your conversation? We always like to hear what these big shot financial people think.
I agreed not to write a post about what the guy I spoke to this week said to me, Anonymous.
I didn’t say those words to the guy I spoke to last week. But all whom I speak to about these matters is afraid of what the Buy-and-Hold Mafia will do to them if they speak openly about this massive act of financial fraud.
People shouldn’t be afraid. There’s certainly nothing to be ashamed about. People should be proud that they are helping people rather than destroying their lives. It’s the Buy-and-Holders who should be ashamed of what they have done to our country.
But that’s not the way it is. It is the Valuation-Informed Indexers who are afraid to speak out. That’s what needs to change. The reason why it remains that way today is that we have not yet reached the inflection point where the Buy-and-Holders realize that their case is so weak that they no longer have any choice but to acknowledge that it is possible that they are wrong. We are close to reaching that point. We are on the one-yard line. But we are not there yet.
The way that a new idea spreads is that one person hears about it and he spreads the word to two others and those two each spread the idea to two others and then you look up one day and the new idea has millions of followers and is now the dominant idea. If Bogle had given his “I Was Wrong” speech back in 1981, we all would have been Valuation-Informed Indexers by 1990. The bad news is that we have lost lots of years of progress and millions of lives have been destroyed because of the delay. The good news is that we can make 33 years of progress in six months by opening the internet to honest posting now.
These two guys are afraid. But they see from their dealings with their clients and from their reading of the literature that Buy-and-Hold has failed. So they are going to try to quietly make the switch. But they will not be as effective doing this in a quiet way as they would if they were more outspoken. Their clients will have a hard time accepting all they are told because they are not hearing the message from other places. If someone is trying to quit smoking, it does not help if he hears hour-long commercials paid for by the tobacco companies each time he turns on his television. The clients of these two guys hear commercials financed by the Wall Street Con Men each time they go to a web site or read a financial magazine. That needs to change.
People respond to incentives. Right now the Buy-and-Holders feel that they can never be held accountable no matter how outrageous their behavior because the Wall Street Con Men are powerful and wealthy and ruthless in their corruption. Each time a new advisor gives up on the smelly Get Rich Quick garbage, it gets harder for the Buy-and-Holders to continue their con. Do you think these guys are going to stay quiet after the next crash, Anonymous? I don’t. They are going to be bragging about how they helped their clients by steering them away from Buy-and-Hold. Word will spread. Then people will start demanding that those who continued to push Buy-and-Hold be sent to prison. Then the entire con collapses.
I will help anyone who contacts me. I want everyone telling the truth. The more people who abandon the Buy-and-Hold garbage, the better off we all are.
So I answered all the substantive questions they posed. I also made reference to the fraud stuff. I didn’t focus on that side of things. I don’t think that side of things should be our focus. But I don’t think we should be ignoring that side of things either. The longer we ignore the corruption, the longer the corruptions remains in place. So I definitely mentioned the corruption to both of these guys. They were scared to talk about that aspect of the question, as everyone is (as even I was at one time). But they didn’t hang up the phone when I brought that side of things up. They listened to what I had to say and in some cases asked a question or two.
As the economic crisis worsens, more people will listen. And those who have already been listening for some time will become more emboldened to speak out about the corruption. People feel funny going there. But they feel less funny as they see that there is no other way to explain to people why they didn’t start hearing the straight story 33 years ago, when the peer-reviewed research first revealed to us how stock investing works in the real world.
It’s a step-by-step process. It takes time.
I wish it wasn’t so. I wish we could all come clean in 24 hours and that we could all pull together to bring this economic crisis to a quick end.
That’s not where things stand today, Anonymous. So we have to go about things this other way instead.
I try hard never to hold back from talking about the financial fraud and the felonies and the prison sentences. People need to know about that stuff to know who to sue and to know who will be going to prison. There need to be consequences for those who advocate Buy-and-Hold strategies. And there need to be rewards for those who stand up to them.
Not everyone is 100 percent aboard today. Obviously. But more and more are asking questions all the time. The knowledge of those people deepens over time. Eventually it deepens enough that they are demanding prison sentences. Not just for the good of the millions of middle-class people whose lives are in the process of being destroyed but also for the good of the Buy-and-Hold advocates who would be directing their live energies to more constructive ends if they fully appreciated how much harm this smelly Get Rich Quick garbage has done to the country that we all love.
I hope that helps a bit.
The short answer to your question is that big shot financial people are like everyone else. They love their country. And they want to do right by their clients. They are naturally frightened by the Wall Street Con Men because they have seen how ruthless they are. But they are in the process of working up their courage. When things get a bit worse, your prison sentence will be announced. That will do it. From that point forward, things will start getting a lot better for all of us very quickly.
That’s Rob Bennett’s sincere take re all this, in any event. If Buy-and-Hold were anything but a con, we never would have seen a single death threat or a single threat to destroy a single career.
My best wishes to you and yours.
Rob
“I agreed not to write a post about what the guy I spoke to this week said to me, Anonymous.”
I am confused, Rob. There have been people, like Wade Pfau, who have asked you not to post things, yet you disregarded previous requests. What is different this time?
The 12-year cover-up of the errors in the Old School safe-withdrawal-rate studies is the biggest act of financial fraud in U.S. history, Anonymous. The threats to get Wade Pfau fired from his job if he continued publishing honest research was obviously a key element of the cover-up. If I were to fail to report on the threats made to get Wade fired, I would be participating in the massive cover-up and I would be going to prison following the next price crash along with you Goons. Um — No, thank you.
I am not committing a felony by holding back from reporting in detail on my conversation with the financial planner. So I don’t feel bound to give a complete report.
I do think that the fellow’s worry about what would be done to him if it gets out that he is giving honest investing advice illustrates the problem facing us all as a result of the criminal acts of the Buy-and-Hold Mafia. So I reported that reality. I don’t see a need to take it further than that.
LOTS of people in this field have told me that they would like to feel safe to do honest work. I believe that the announcement of your prison sentence is going to open the floodgates. I think it would be fair to say that, once your prison sentence is announced, news of it will go viral and Buy-and-Hold will be an obscene phrase all over the internet. Good for the millions of middle-class investors whose lives are in the process of being destroyed.
I am not ashamed to have told the truth about safe withdrawal rates. I am proud of it. I will be happy when I am famous all over the internet for having done so. Every time I tell the truth about one more aspect of this story, I feel cleaner and better about myself and more optimistic about the future of my country. My intent is to tell more and more and more of the truth to more and more and more middle-class investors.
I hope that’s okay by you, Anonymous.
But I am of course going to do it whether it is okay by you or not. I love my country.
I naturally wish you all the best that this life has to offer a person regardless of what investing strategies you elect to pursue.
Rob
“If we are going to send Bernie Madoff to prison, it’s more than a little hard to justify not doing the same for the sorts of individuals who have put forward posts in “defense” of Mel Linduaer and John Greaney, who obviously have caused 500 times the human misery.”
What you are saying is that if people agree with Mel and John for having you banned on various chat boards, you think that is breaking some kind of law? How is that different from you deleting posts? How is that different from the thousands of comment sections all over the internet that are moderated and delete/block various posters? How is it unique in your particular case?
Bernie Madoff went to prison for financial fraud. The strongest piecees of evidence against him were fake transaction statements he created. These were statements that showed trades that in fact were never completed. They prove that he was engaged in an attempt to DECEIVE investors.
If a novelist included a fake transaction statement in a novel he published, that would not be financial fraud. It is only financial fraud if the PURPOSE is to deceive people re a financial matter.
I am not deceiving anyone re any financial matter when I delete a comment that contains a death threat against someone who posts at this site. It is my job to delete that sort of post.
You ARE engaging in financial fraud when you threaten to get an academic researcher fired from his job by sending defamatory e-mails to his employer because he published honest research that uncovered your 12-year cover-up of the errors in the Old School safe-withdrawal-rate studies. That 12-year cover-up is the biggest act of financial fraud in U.S. history.
There is no internet exception to the laws making financial fraud a felony, Anonymous.
Your jury will decide on the length of your prison sentence. That’s not my job. I will tell the story. I will testify honestly. That’s all.
If you don’t like the idea of going to prison, you shouldn’t commit financial fraud. You shouldn’t cover up errors in retirement studies. I didn’t tell you to do that. I told you NOT to do that. There is no one on Planet Earth who has worked harder to keep you out of prison than I have. But I am not a miracle worker.
You obviously knew all this before you put up your post. Your jury will obviously be able to figure out that you knew it when they see that you post here every day. You wouldn’t do that if you weren’t worried about going to prison. So this is a case where you KNOWINGLY committed financial fraud and then covered it up for YEARS. Good luck trying to win the jury’s sympathy re that one.
I intend to try to help you out. I intend to try to make a case that you were suffering cognitive dissonance and that you were embarrassed over getting the numbers wrong and then panicked and found yourself getting more and more entangled in your web of lies. I can’t say that you shouldn’t go to prison. But I feel comfortable arguing for a sentence somewhat reduced from what it would be if the unique circumstances that apply in this case were not present.
That story might fly to some extent today. I doubt that it is going to help much following the next price crash. People are going to be too angry then to be willing to take such subtle distinctions into consideration. They are going to be looking for someone to hang from a tree and I think it would be fair to say that you are a pretty darn obvious candidate for the honor. But we will find out for sure soon enough, right?
Is there anything else?
Rob