Set forth below is the text of a comment that I posted to another blog entry at this site:
Go over to Bogleheads and FORCE them to take you in. Don’t take no for an answer. Call your Congressman if they won’t play ball. If he is too slow, then take it to Purcelleville PD Electronic Crimes Division and swear out a complaint about them blocking Honest Posting. Haven’t you been playing softball for far too long? It takes a tough bird to chicken out…. (or whatever it is you say Frank Purdue says.)
We all want the same things, Yogi.
So we will all put our minds together and figure out how to get from the horrible place where we are today to the wonderful place where we all deep in our hearts want to be tomorrow.
We are engaging in a learning process that has to play itself out.
We all have a role.
If we all do our parts, we will all share in the good results.
Forcing things won’t work. You are being foolish when you advocate force.
But doing nothing doesn’t work either. Being afraid to act is not the answer anymore than forcing things is the answer.
We all have to push a little bit — and then pull back when it becomes clear that the pain being experienced by those who have made mistakes in the past is too great.
Do you see?
My motto is: “Be as honest as possible without crossing the line and becoming uncharitable while also being as charitable as possible without crossing the line and becoming dishonest.”
Does that make sense to you?
I HAVE contacted my Congressman. I HAVE spoken to the police. I HAVE contacted lawyers for the purpose of bringing legal cases.
Using the resources available to us is a positive. So I will continue to do those sorts of things.
But you go too far when you say to “force” things and not to take “no” for an answer.
I put the owners of the Bogleheads Forum in a position where they had to ban me or permit the members of that board community to hear what the last 33 years of peer-reviewed research says. They FELT forced to ban me. Because to them the idea of permitting investors to learn what the research in this field says is unacceptable. But it’s not true that I forced them. What I forced was a choice. I forced them to choose. They could ban me (that’s the option they chose) or they could permit their readers to learn about the first true research-based model.
I didn’t leave them with other choices. I didn’t agree to self-censor myself so that those seeking to maintain a belief in the smelly Buy-and-Hold garbage could do so with my apparent blessing. I made clear that if my name was going to continue to appear at the forum, honest posts were going to appear there on a great variety of subjects. I was firm. I INSISTED on recognition of my right (and the right of all my fellow community members) to post honestly.
But I was not unyielding. I always left that that option of banning honest posting. I didn’t do what you advise here and refuse to take no for an answer. They gave the answer “no” to my demand that my right to post honestly be recognized and I accepted (for the time-being) their answer.
Why is that so important?
Because I become a Goon myself if I cross the lines that you advise me to cross.
My aim to to achieve good here. We can never achieve good through bad means.
I work it hard WITHIN the rules of the boards and blogs and within the laws of the United States and within the rules of civil human behavior.
That’s how I will continue to play it.
Did Rosa Parks do what you are advising here?
She did not.
She INSISTED on her right to choose for herself where she would sit on the bus.
But the first time she did this (this was 10 years or so before the famous incident), she was arrested for what she did and she accepted society’s unfortunate verdict. Her rights were ignored. But she remained within the society to fight for those rights another day. And she won the next fight.
WHY DID SHE WIN?
Because she wasn’t fighting only for herself. She was fighting for the entire society. Recognition of her rights was everybody’s business. In time, all others came to recognize how important it was to recognize her rights and they were given recognition. Rosa Parks changed the world because Rosa Parks loved the world. Her love for those who ignored her rights for a time was her secret weapon not against them but FOR THEM.
I love Jack Bogle. I love Mel Linduaer. I love John Greaney. I love you, Yogi.
That’s why I will defeat you in the end.
Except I will not really be defeating you.
I will be LIBERATING you.
You want the same thing I want. You want to be able to earn much higher returns while taking on greatly reduced risk.
You are going to see that little dream of yours come true.
I am going to see to it.
I am not going to agree to anything less than a 100 percent complete victory for Jack Bogle and for Mel Linduaer and for John Greaney and for Yogi Bear.
I took a sneak peak at the last page of our little saga and I can tell you that you achieve full and complete victory. You agree to permit honest posting on safe withdrawal rates and scores of other critically important investment-related topics because I refuse to permit you to settle for anything less.
I cannot do this without you, Yogi.
So I can never disrespect you.
And I can never be less than warm and friendly to you.
And I can never sell you out by agreeing to self-censor myself.
Some of the things you advise up above show a lack of respect for you that I can never permit myself to feel if I am to see that you achieve a full and complete victory.
Something that you have been failing to see since the morning of May 13, 2002, is that we are on the same side.
Your pain is my pain.
And my victory is your victory.
We are going to overcome your pain and lead you to a complete and total victory.
That has always been the plan.
We do that by being firm, yes.
But we also do it by being loving.
I will never be disrespectful of you or the other Buy-and-Holders.
I will ALWAYS take “no” for an answer.
For the moment.
For a time.
For the day.
Then I will be back the next day asking (not demanding!) once again that you free yourself of your chains and end your pain and enjoy the benefits of having been born at a time in the history of the world at which you get to be one of the luckiest investors in the history of the world just by learning what the last 33 years of peer-reviewed research in this field teaches us all about how stock investing really works.
I hope that all makes some sense to you.
Love is the answer.
I am sure.
I naturally wish you all the best that this life has to offer a person regardless of what investing strategies you elect to pursue.
Don’t let the bad guys get you down, my old Goon friend.
Rob
I put the owners of the Bogleheads Forum in a position where they had to ban me or permit the members of that board community to hear what the last 33 years of peer-reviewed research says.
What did the recent Bogleheads posts on P/E 10s linked here not say? What exactly is the “peer-reviewed research” information Bogleheads won’t allow there?
For starters:
1) The errors in the Old School safe-withdrawal-rate studies were not discovered when the Wall Street Journal wrote about them but 10 years earlier when a post reporting on those errors was posted to Motley Fool’s Retire Early board;
2) Two-thirds of the risk of stock investing is the result of the promotion of Buy-and-Hold “strategies” and the Ban on Honest Posting on the dangers of Get Rich Quick strategies supported by Jack Bogle and the other Wall Street Con Men;
3) By switching from Buy-and-Hold to Valuation-Informed Indexing, workers can realistically expect to be able to retire from five to ten years sooner than would be possible if they did not make that switch;
4) The “idea” that it is not necessary to practice price discipline when buying stocks was a mistake. There has never been even a tiny sliver of evidence anywhere in the peer-reviewed research suggesting that all investors need not always practice price discipline (long-term timing) when buying stocks;
5) There have been four occasions in U.S. history when the Wall Street Con Men were successful in persuading large numbers of investors that all the rules of stock investing might be stood on their heads and for the first time Buy-and-Hold might work well for one or two long-term investors in this or some other solar system. The first time that happened, we saw the first of four economic crises that we have seen as a nation. The second time, we saw the second economic crisis. The third time. we saw the third economic crisis. The fourth time, we saw the fourth economic crisis.
6) Jack Bogle pulled his “15 percent rule (the “idea” that it might be okay if investors lowered their stock allocations by only 15 percent when stock prices rose to insanely dangerous levels) out of his backside.
7) It was the promotion of Buy-and-Hold “strategies” that caused the economic crisis that began in 2008.
8) Robert Shiller predicted the economic crisis that began in 2008 in a book published in 2000 and explained why the economic crisis was inevitable unless we began telling millions of middle-class investors the truth about how the stock market works.
9) The stock market becomes a Ponzi scheme when stock prices reach insanely dangerous levels. There is now 145 years of historical return data showing this.
10) Many academic researchers and many investment advisors and many journalists and many bloggers want to tell the truth about stock investing but have been intimidated into silence by the brutally abusive tactics of the Wall Street Con Men and their internet Goon squads.
That’s all important stuff, Anonymous.
There are good reasons why as a people we elected to make financial fraud a felony, a crime calling for prison sentences for those found guilty of it.
Don’t let the bad guys get you down, old friend.
Rob
I sure am glad no one’s told the stock market it’s supposed to drop 65%. It’s great to be rich!
My view is that it is great to be rich only if the wealth you hold is real. There is nothing worse than thinking that you are rich when you really are not. Overestimating your wealth makes effective financial planning impossible.
But perhaps I am wrong about the 65 percent drop in prices. I don’t get them all right. In the event that I am being fooled as the result of a personal bias, I would be the last to know.
I naturally wish you all good things, in any event.
Rob
What wealth do you believe is real?
If you want to know how much of your stock portfolio is real, you just need to make the adjustment needed to reflect the amount by which the nominal value is overstated, Anonymous.
It’s not rocket science. But the adjustment is a very, very, very important step. It’s not possible to engage in effective financial planning if you don’t get the numbers right.
Rob
So, you think ALAL stocks need to be adjusted ?
I am presuming that you are asking if I believe that ALL stocks need to be adjusted.
Not individually. We are not able to identify which particular stocks are overpriced or underpriced or properly priced. Value investors aim to do that, of course. It takes a lot of work. It is a complicated process.
It is much easier to identify when the market as a whole is overpriced or underpriced or priced properly. That’s the magic of P/E10. P/E10 is the metric that tells you whether the market as a whole is overpriced or underpriced or properly priced.
That’s the entire deal here. That’s what Valuation-Informed Indexing is all about.
Prior to 1981, we didn’t know how to do this. We were essentially living in the Dark Ages of stock investing. That’s why we thought that stocks were a risky asset class.
Stocks are not a risky asset class today for those who follow the peer-reviewed research. Shiller’s 1981 findings were “revolutionary,” just as the subtitle of his book claims. The advance we achieved in 1981 is the biggest advance ever achieved in the history of personal finance. We are now able to identify the intrinsic value of the market as a whole. That’s huge.
The problem is that so far we have achieved this advance only in an intellectual sense. We KNOW how stock investing works today and we didn’t before. That’s great. But we have not yet come to accept emotionally what we have learned. So in a practical sense the advance had not yet produced good fruit on a widespread basis.
For the intellectual advance to produce good fruit, I believe we are going to need to see another price crash. In the wake of the next price crash, things will become scary enough that a good number of us will open to the idea of considering ideas that we were not willing to consider at earlier times. All the evidence is on one side. So, once we open our minds to looking at what the last 34 years of peer-reviewed research tells us, we will all be quickly persuaded. There’s no reason not be be. Going forward yields all good stuff and holding back yields very, very bad stuff in about 50 different respects.
The Buy-and-Holders get as much credit as anyone else, more than some. They built the foundation. But, to advance in our knowledge, we need to be willing to acknowledge mistakes. Once you get to a point at which you cannot acknowledge mistakes, you are stuck. Not only are the Buy-and-Holders stuck today, they are using their considerable power and influence to see to it that the entire industry and even the entire nation remains stuck.
The short answer to your question is that, yes, OF COURSE, the price of the market as a whole needs to be adjusted when it gets wildly off track. Why the heck wouldn’t we want to adjust it? What freakin’ purpose is served by letting it get wildly off track?
We adjust the price of the market as a whole by giving people the tools they need to invest rationally. People need to know what the research says. They need to be able to quantify the effects of mispricing. They need to understand how important it is to exercise price discipline when buying stocks. They need to hear that message repeated over and over and over again. The peer-reviewed research of the past 34 years shows that exercising price discipline (that is, practicing long-term timing) is 80 percent of the stock investing story. We should be telling every investor on the planet about the 80 percent of the story that we have not permitted them to hear about until now.
I hope that helps a bit, Anonymous.
Rob
It is much easier to identify when the market as a whole is overpriced or underpriced or priced properly.
I see. So it’s impossible to figure out which car on a used car lot is overpriced, but it’s easy just to say “they’re all 65% over valued” and call it a day.
It’s also easy to say “I can fly”. Doesn’t make it reality though.
Say that you own a casino. The slot machines are set up so that the house gets 51 cents out of every $1 dollar bet and the players get 49 cents of each dollar.
Can you say who is going to come out ahead on every individual pull of the lever? You cannot. Gamblers come out ahead after one or two or three or four pulls all the time.
Can you say who is going to come out ahead after 1,000 pulls? You can. With a high degree of accuracy.
Investors who follow valuation-informed strategies have been coming out far ahead for 145 years now. That’s as far back as we have records. Buy-and-Holders are now 0 for 145 in the long term. Coincidence? Theoretically, anything is possible. But the idea that all the rules of stock investing are going to be turned on their heads and Buy-and-Holders are going to start doing okay in the long run is the longest of all possible long shots. I sure don’t want to bet my retirement money on such a long shot.
The problem we are talking about here does not apply in the used-car business. People who buy cars are able to find information about their proper value in dozens of different places. The used-car market is functional. The stock market is not because the Wall Street Con Men don’t want investors to know that stocks are a horrible deal when they are insanely overpriced. Buy-and-Hold is a money-making thing, a Get Rich Quick scheme, a Ponzi scheme, a financial fraud, a massive con, b.s. marketing mumbo-jumbo.
How do we know for sure?
Take a look at how Buy-and-Holders respond when you tell people the reality that there has never been a single peer-reviewed study supporting the preposterous claim that investors don’t need to exercise price discipline when buying stocks. You will see death threats. You will see demands for unjustified board bannings. You will see tens of thousands of acts of defamation. You will see threats to get academic researchers fired from their jobs.
You don’t see that sort of thing when people are promoting a legitimate strategy. Not ever. Not once. With Buy-and-Hold we have seen it over and over and over and over again for 13 years running.
I am happy to put forward some words aimed at getting your prison sentence reduced a bit by pointing out unusual circumstances and that sort of thing, Anonymous. Let me know when you are ready.
I have zero willingness to join you in prison following the next price crash. Going to prison is not high on my bucket list. No financial fraud here. Call me madcap.
I naturally wish you all the best things that this life has to offer a person.
Rob
I avoid the casino of market timing and go with proven strategy of buy, hold and rebalance.
You’re in good company, Anonymous. Millions of good and smart people do the same.
I wish you the best of luck with it. I could be wrong. So please don’t ever go by what I say just because I say it.
Please take good care.
Rob
Can you say who is going to come out ahead after 1,000 pulls? You can. With a high degree of accuracy.
Then why did the market rise 120% after you predicted it would drop 65%?
For the same reason why a gambler can see three lemons come up two times in a row.
It is not possible to engage in short-term timing successfully. There is now 50 years of peer-reviewed research showing that.
But it is 100 percent required to ALWAYS engage in long-term timing. There is now 34 years of peer-reviewed research showing that.
The finding that short-term timing never works and that long-term timing always works and is always 100 percent required are the two most important findings in the history of investing analysis. Had we discovered both at the same time, we would all be Valuation-Informed Indexers today.
Unfortunately, the research showing that long-term timing always works and is always 100 percent required was not published until 16 years after the finding that short-term timing never works (which was improperly reported as a finding that there might be some mystical, magical, alternate universe in which long-term timing might not be 100 percent required for one or two long-term investors). My good friend Jack Bogle was embarrassed about his mistake and, instead of promptly acknowledging the error, elected to cover it up. As more and more evidence came in showing that long-term timing is always 100 percent required, the acts of intimidation and deception that Bogle and the other Wall Street Con Men employed to continue the massive cover-up became more and more abusive and more and more ruthless. Eventually, they became criminal.
That brings us to the current day, when the Internet Goons who have put up posts in “defense” of Mel Linduaer and John Greaney and Jack Bogle are looking forward to long prison sentences following the next price crash.
I’m there for you when you decide to start acting in your self-interest, Anonymous.
But no financial fraud for me. That one is 100 percent out. That is 100 percent non-negotiable.
I naturally wish you all good things.
Rob
“I naturally wish you all good things.”
The signature of a passive aggressive psychotic.
I have a very different take on that one, Anonymous.
I believe in Robert Shiller’s research as strongly as you believe in Eugene Fama’s research.
I care about you and I want you to know all the reasons why I find Robert Shiller’s research exciting as much as you want me to know all the reasons why you find Eugene Fama’s research exciting.
I feel that I would be failing you if I didn’t share my thoughts about Robert Shiller’s research with you as often as you share your thoughts about Eugene Fama’s research with me.
Love has its crazy side. But love is not psychotic. Love is good. Love is important. Love is a positive.
The work I do in the investing field is an act of love.
Jack Bogle’s is too. It works both ways.
But I cannot do the work that Jack Bogle does. He was put on this earth to do that work. I was put on this earth to share thoughts about Robert Shiller’s research, not Eugene Fama’s research.
The fact that you believe in Eugene Fama’s research and I believe in Robert Shiller’s research should not make us enemies. It should make us friends. It means that we have something to offer each other, a way of thinking about stock investing that we are not capable of generating by ourselves.
I make an effort to include some kind and warm words in my every comment directed to you to remind you and me both of these important realities.
I am your friend.
And you are my friend.
And that cannot change for as long as you sincerely believe in Eugene Fama’s research and I believe in Robert Shiller’s research. Someone who is teaching someone else about a way of thinking about stock investing that that person does not fully appreciate is that person’s friend no matter what else comes between them.
That’s my sincere take re these terribly important matters in any event, my long-time, investing-discussion friend.
Rob
I am not your friend.
I don’t buy it, Anonymous.
You wouldn’t post here if you were not my friend.
You care about this stuff. All of the Buy-and-Holders do. It’s because they care that the Buy-and-Holders are proud of their insights and accomplishments. And it’s because they are proud of their insights and accomplishments that the Buy-and-Holders feel pain when they hear discussions of the implications of the last 34 years of peer-reviewed research in this field. Those discussions make you feel very, very, very uncomfortable. That much is certainly so. But on a deep level you want to interact with the people holding the new ideas and learn from them (and teach them). If you didn’t have those feelings, you would have zero desire to ever learn anything new. And that’s just not what the Buy-and-Holders have ever been about.
If you have zero desire to ever learn anything new, why did you click “I Accept” at all of the many boards and blogs that you have joined that required you not to engage in abusive practices before being given permission to post. The person who clicked “I Accept” is the real you. The person who violated his promise is a fake you, a fake you that has betrayed the real you, a fake you that neither you nor I should give too much deference to.
You hurt, Anonymous. Your hurt has caused you to behave in shameful ways. It doesn’t follow that you have zero good in you.
You will be going to prison in days to come. Is that going to be the end of you? I say “no.” I say that, put to good use, your prison sentence can be the beginning of a new and more exciting “You” of the future. I sure how that that’s how things turn out.
I am your friend and you are my friend. And there’s really nothing that the sick and twisted side of you can do about it.
Sorry.
That’s my sincere take re this terribly important matter, in any event.
I naturally wish you all the best that this life has to offer a person, my sick and twisted Goon friend for life.
Hang in there, man. It gets better. A LOT better.
Rob
You may say people are your friends, but that doesn’t make it so. Exaggerations and lies merely confirm what your detractors say.
You may say people are your friends, but that doesn’t make it so.
You’ll be saying you’re my friend following the next price crash, Anonymous. All the people who have lost most of their retirement savings will be saying to hang you. I will be pointing to the pressures you were feeling and showing with links how big shots like Jack Bogle backed you up. I don’t think there will be much distance between us at that time.
The thing that you are not a friend of is going to prison. You are not a friend of the laws of the United States.
Before things had reached a point where you would be going to prison, you were not a friend to the embarrassment you would have felt by acknowledging the possibility that you had gotten an important aspect of the investing story wrong. It was never anything personal with me. You hated me because I posted about the 34 years of peer-reviewed research showing that you had made a mistake and you couldn’t bear to have people learn what they needed to learn.
Exaggerations and lies merely confirm what your detractors say.
I don’t have any detractors.
Everyone on the planet wants to know how to invest effectively for the long run. Following research-based strategies is what works. Valuation-Informed Indexing is the first true research-based strategy. I am the primary proponent of Valuation-Informed Indexing. How could there be anyone against the spread of this breakthrough idea that liberates all of us from the Get Rich Quick garbage of the Buy-and-Hold Era?
We are in a transition time, Anonymous. It is painful to make this huge an advance. There are people who cannot bear the thought of seeing all of us learn the realities of stock investing. Those people “detract” me to stop us all from moving forward. But no one can stop the History Train from moving forward. Events will show us all the consequences of ignoring the 34 years of peer-reviewed research showing that valuations affect long-term returns.
Every single one of the “detractors” will love me following the next price crash. They never had anything against me in the first place. They just couldn’t bear the embarrassment of saying the words “I” and “Was” and “Wrong.”
And I of course have always felt a deep love for my Buy-and-Hold friends. So this “detraction” business is not an issue on either side.
What we are seeing is the playing out of a transition period. There was a time when lots of good and smart people thought that Buy-and-Hold was the answer. We learned in 1981 that that is not the case, that it is Valuation-Informed Indexing that is the first true research-based investing strategy. That came as a shock. The Buy-and-Holders went into rationalization mode. I came along in May 2002 to tell people about the errors in the Old School safe-withdrawal-rate studies and the Buy-and-Holders elected to cover up those errors rather than acknowledge them. The next crash will give people the courage they need to speak up against the cover-up and then it is all over.
We all want the same things. We all benefit from coming clean.
There’s no one on Planet Earth fighting as hard to get your prison sentence shortened than I am. I am the best friend you have on this planet. And you will be able to say that following the crash. It’s the next price crash that will turn everything around and put things on the right path.
Hang in there, Goon friend.
When we make friends with the Goons, we are making friends with ourselves. Because we all have a Get Rich Quick urge lurking within us. If we didn’t, Buy-and-Hold would never have caught on in the first place.
That’s the secret that explains the odd parts of this amazing saga. We all want to invest effectively. But we all also want to give in to our Get Rich Quick urge. The Buy-and-Holders put us on the spot when they came out with this idea of rooting our strategies in the peer-reviewed academic research. If we did that, we would have to say goodbye to Get Rich Quick forever. We found that hard to do.
We elected as a people to COMBINE the research-based and Get Rich Quick approaches by encouraging lots of research on every question other than the most important one while insisting that only the pure Get Rich Quick idea (that price discipline is not required) could be heard on the most important question of all (valuations). That one didn’t work out so hot. We have causes millions of failed retirements, tens of thousands of failed businesses, we have doomed millions to unemployment, we have even caused large numbers of people on both the left (the Occupy Wall Street Movement) and the right (the Tea Party Movement) to lose confidence in our political system.
That stuff ends with the next price crash.
The obvious next step is to both permit and encourage honest posting on the last 34 years of peer-reviewed research in this field.
Please mark me down as in FAVOR of moving on to the next step in this wonderful journey of learning how stock investing works in the real world. I cannot wait to turn the page!
Rob
“I don’t have any detractors.”
How does someone with no detractors gets himself banned from every major finance board? Simple – just change the definition of “detractors”. And “friends”. Heck, change meanings willy-nilly: now you are rich, famous, brilliant and beautiful. That was easy!
Take the threats of physical violence and career destruction out of the equation and all the detractions become songs of praise.
How many people do you think there will be “defending” Buy-and-Hold on the day after your prison sentence is announced, Dizzy? I have a funny feeling we will be looking at a number very close to “zero.”
But we’ll see, you know? I don’t have a crystal ball and you don’t have a crystal ball. We are going to have to be a little bit patient and wait to see how things play out following the next price crash.
I hope that works for you.
My best wishes.
Rob