Set forth below is the text of a comment that I recently put to another blog entry at this site:
Your only regular interaction on this subject is with the “goons” and therefore a large percentage of your output is designed to provoke a reaction from the “goons”.
You’re wrong, Evidence.
The stuff I write today is written to show millions of middle-class people how their financial futures were destroyed. We need as a society to make peace with what has happened. That’s the first step. All the other stuff (the substantive stuff) follows easily once we come to terms with the massive act of financial fraud.
People don’t like to talk about the financial fraud. We all have participated in it in at least some small way (for example, I was afraid to post about the errors in Greaney’s study for the first three years in which I posted at Motley Fool). We are ashamed of ourselves and of our institutions. So we try to pretend that Shiller’s research was never published or doesn’t matter or doesn’t say what it says or doesn’t imply what it implies or whatever.
I don’t even put the primary blame on you Goons. I obviously don’t approve of your behavior. But Goon posters are a common reality on the internet. The usual way to deal with them is to ban them. Had Motley Fool banned Greaney when he made his first death threat, none of us would have travelled this dark road. Motley Fool screwed up. Big time. Motley Fool does not employ Goons. But Motley Fool voted for Get Rich Quick when they failed to ban the fellow putting forward the death threats and instead banned the fellow who discovered the errors in the Old School retirement studies. The site administrator at Motley Fool is more to blame for what has happened than any of you Goons, in my assessment.
I have had people say to me: “Rob, every thing that you say about investing makes perfect sense. But I just cannot follow your advice because my retirement is important to me and what you say is the opposite of what the experts in this field say.” That’s a pretty darn sensible statement, is it not?
The problem here is not that there is anything that I am saying that is wrong or that anything that I am saying is not supported by 33 years of peer-reviewed research or that anything that I am saying is not easy to understand. The problem is that every expert in the field is not saying what I am saying. Shiller published his research in 1981. He won a Noble prize for it. What the heck is going on?
The problem is that this stuff is TOO important for people to feel good about saying something unless they are absolutely sure. Shiller’s stuff was such a breakthrough that people were properly skeptical about it. They held back, waiting for more information.
Then they started to feel funny about reporting on it because there had been such a long delay in discussing all the amazing implications of what Shiller found. In 2002, it had been 21 years since the peer-reviewed research has shown that there was zero chance that a retirement study containing no adjustment for valuations could get the numbers even remotely right. What are you going to say at that point? “Oopsi! Sorry we destroyed your hopes for a decent retirement by giving you wildly wrong numbers all these years!”
Everyone in the field wants to see the Ban on Honest Posting lifted. Bogle wants that or he wouldn’t have included the language in his book showing that the Old School studies get the numbers wildly wrong. Bernstein wants that or he wouldn’t have included Chapter Two in his book; Chapter Two is the best short description of Valuation-Informed Indexing that has been published. Larry Swedroe wants that or he wouldn’t have put forward the honest posts that got him banned at the Bogleheads Forum until he promised Linduaer that he would go back to posting dishonestly. Wade Pfau wants that or he wouldn’t have put so much effort into the research he co-authored with me in the days before he learned that his career would be destroyed if he dared to “cross” the Buy-and-Holders by posting honestly. And on and on and on and on.
The trouble is that lots of Buy-and-Holders will be going to prison if the truth about what the last 33 years of peer-reviewed research says gets out. And lots more will be getting sued by billions and billions and billions of dollars.
So the Buy-and-Holders stick together and respond in a ruthlessly abusive way when they find someone like me posting honestly about the last 33 years of peer-reviewed research.
If our economic system is going to survive, we are going to have to find some means of getting accurate and honest information about how stock investing works out to millions of middle-class people, Evidence. The posts that I put to this site are aimed at helping people come to terms with what we were up against all these years, with why it took so long to get these wonderful advances out to all the people who need to learn about them.
I am anti-Goon. Very, very, very much so.
But the deeper reality is that being anti-Goon shouldn’t cause me any problems. We ALL are anti-Goon. That’s why we have laws against financial fraud in the first place.
The question here is — Why as a society have we made an exception to our usual ant-Goon policies to permit the Buy-and-Holders to continue to shove their smelly Get Rich Quick garbage down our throats and cause us all even more economic ruin that we have already suffered?
When we answer that one, we are on our way to enjoying all the wonderful advances we have achieved in recent decades. The articles at this site aim to help us all come to understand the answer to that one.
Take care, man.
Rob
Anonymous says
People don’t like to talk about the financial fraud. We all have participated in it in at least some small way (for example, I was afraid to post about the errors in Greaney’s study for the first three years in which I posted at Motley Fool). We are ashamed of ourselves and of our institutions. So we try to pretend that Shiller’s research was never published
As opposed to a world where Shiller wins a Nobel prize, and financial frauds or all types as well as valuations are discussed daily in the media and all over the internet? Good news Rob, that’s the reality sane people are living in!
Rob says
No, it’s not, Anonymous.
Shiller was awarded the Nobel prize. That’s a good thing. That makes me happy. That should make everyone happy.
But the question of whether Shiller or Fama is right re how stock investing works has not been resolved. There were scores and scores of reports on the awarding of the Nobel prize to Shiller that noted how strange it was that Fama was awarded the Nobel prize on the same day even though the two say opposite things about how stock investing works. It’s not possible that both are right and, given how important it is that we all finance our retirements effectively, it is very important as a society that we determine who it is that is right.
The only way to do that is to have a national debate on these matters.
And the Buy-and-Holders don’t want that. The thought of us having a debate re whether their investing advice is valid or not causes them great pain.
The awarding of the Nobel prize to Shiller is an important step. I certainly don’t say different. It shows that there are economists who want the truth to come out. And of course even many Buy-and-Holders have acknowledged the importance of Shiller’s work. So there are a lot of Buy-and-Holders who on some level of consciousness want the truth to come out. That’s encouraging to know.
But we haven’t had that national debate. The big thing that is holding us back is that the Buy-and-Holders have engaged in criminal acts to keep people from learning about the mistake that Fama made way back in 1965. Most people don’t like the idea of going to prison. So the Buy-and-Holders are highly reluctant to participate in a debate that is going to lead to prison sentences either for them or for their friends.
How do we address that problem, Anonymous?
We address it by proceeding under a rule where we insist on both honesty and love. We have to try as hard as we can to understand the Buy-and-Holders and to sympathize with the Buy-and-Holders and to forgive the Buy-and-Holders. But we must also insist on honesty. When people get the numbers wrong in retirement studies, they hurt people in very serious ways. We adopted laws against financial fraud to protect ourselves from those sorts of hurts. We need to enforce those laws.
That’s my sincere take re these terribly important matters, in any event.
Rob
Anonymous says
But the question of whether Shiller or Fama is right re how stock investing works has not been resolved.
Sounds like two academics, both far smarter and more qualified than you are to hold economic views, differ on some point. And the Nobel committee (more people smarter and more qualified than you) deemed both views worthy of prizes. So probably better to respect both views, or if you do favor one over the other, to do so in a humble way, knowing far smarter people disagree with you.
Rob says
Backatcha, Anonymous.
There are plenty of smart people on both sides. So all on both sides should speak in a humble way and show respect to those who offer the other viewpoint.
The Wall Street Con Men and their Internet Goon Squads (this means you!) have not done this.
Should we not enforce our laws when individuals commit the felony of financial fraud by putting up posts in “defense” of Mel Linduaer and John Greaney and Jack Bogle? It sure seems so to me.
Are you able to imagine any possible downside?
Rob
Anonymous says
“Should we not enforce our laws when individuals commit the felony of financial fraud by putting up posts in “defense” of Mel Linduaer and John Greaney and Jack Bogle?”
There is NO FRAUD in supporting Mel, John, Jack, Rick, Larry, Wade, etc. Stop acting like child that is having a school yard spat.
Rob says
There are millions of middle-class investors who are in the process of suffering failed retirements as a result of the 12-year cover-up of the errors in the Old School retirement studies, Anonymous.
Who should pay for those losses? The people who were taken in by this massive act of financial fraud? Or the people who participated in the massive act of financial fraud? You know what I think. The people who have been conned will be speaking out on this question following the next price crash. Those are the people who will be sitting on your jury.
If you didn’t think that financial fraud was a crime, there never would have been a single death threat or a single demand for an unjustified board banning or a single act of defamation or a single threat to get a single academic researcher fired from a single job. People do not engage in behavior of that sort for no reason.
I want no part of it. I have hopes of becoming known all across the internet as the lead voice speaking out in OPPOSITION to the 12-year cover-up. If there is anything that you could do to spread the word, I would be grateful. Every little bit helps.
No financial fraud for this boy. Please try to find someone else.
I can”t for go that. No can do.
It’s just not my particular cup of tea.
Rob
Anonymous says
Backatcha, Anonymous.
Oh, don’t worry! I never said I knew the extent to which valuations might affect future stock prices. Correlation data suggests historically they may have to some extent, some of the time, though correlation doesn’t always mean causation. I’ll be the first to admit that the future’s a very uncertain place. No boorish hocomania here. I focus on the things I can control, like gainful employment and a high savings rate.
Rob says
If I were in your shoes, I would focus on doing what I could do at this point to see that my prison sentence was shortened a bit.
It is up to each investor to decide for himself or herself to what extent valuations affect long-term returns. Using death threats to block people from learning what they need to learn is out. It’s the same with demands for unjustified board bannings. It’s the same with tens of thousands of acts of defamation. It’s the same with threats to get academic researchers fired from their jobs.
The future is not a terribly uncertain place for the sorts of individuals who have put up posts in “defense” of Mel Linduaer and John Greaney and Jack Bogle. They are headed to prison following the next price crash.
Going to prison is not on my bucket list, Anonymous. Please try to find someone else.
No can do.
I can’t go for that.
Rob