Set forth below is the text of a comment that I recently posted to another blog entry at this site:
“Extraordinary claims require extraordinary evidence.”
Is your problem that you don’t understand what that means, or that you simply don’t agree with it? Either way, it explains in one sentence your laughingstock status in the online community. Wild claims, supported by no evidence at all.
When Wade Pfau was working with me, he spent a long time searching through the peer-reviewed research in this field trying to find a single study that supported the key Buy-and-Hold claim that it is not necessary to exercise price discipline when buying stocks. He never found one. He went to the Bogleheads Forum and asked if anyone there knew of a single study lending even a tiny bit of support to the key Buy-and-Hold claim. Jack Bogle did not know of a single study. Bill Bernstein did not know of a single study. Larry Swedroe did not know of a single study. Rich Ferri did not now of a single study. Mel Lindauer obviously did not know of a single study.
It’s all a big lie, X.
It wasn’t a lie in the early days. In the early days, it was a mistake. Eugene Fama discovered something of huge importance when he found that short-term timing never works. But Fama did not even test long-term timing. Robert Shiller was the first researcher to do that. Shiller found that long-term timing ALWAYS works and is ALWAYS 100 percent required. If Bogle had walked to the front of a big room within a week of publication of Shiller’s “revolutionary” (his word) research, we would not be in an economic crisis today. But he didn’t do that, did he? And a mistake that is covered up for 33 years is no longer properly termed a mistake but a lie.
I didn’t get Jack Bogle in this situation. He is the one who made the mistake. And he is the one who covered up the mistake for so long that it was transformed into a lie.
I have been Jack’s best friend in the world for the past 12 years. Jack didn’t mean to make the mistake. And he didn’t mean to tell the lie. By the time the mistake was discovered, he had built his entire career around promotion of the mistake-based strategy and the pain was so great that he came to suffer cognitive dissonance over the matter. He lied to everyone who ever asked him a question about what the peer-reviewed research in this field says. But he lied to himself first. When you lie to yourself, it becomes pretty darn hard to tell the truth to others.
Bogle is a flawed human, like all the rest of us. When he is suffering from cognitive dissonance, it becomes the job of all his friends to help him out. Many, many, many others have been too afraid to show their friendship, given the circumstances. Bogle has a lot of money and a lot of power and a lot of connections and he has shown a ruthlessness in making use of them to destroy the career of anyone who dares to “cross” him by telling the truth about what the last 33 years of peer-reviewed research says. I am as afraid of the man’s power and ruthlessness as everyone else. But I worked p the courage to “cross” him by insisting (not asking!) that he behave according to the norms that apply in every field of human endeavor other than the investing advice field. I have shown a love for Old Saint Jack that Old Saint Jack has never once in the past 33 years shown for himself.
I will continue to show that love for him. I will continue to praise him to the skies for his many genuine contributions, contributions that place him second only to Robert Shiller in my list of the true giants in this field. And I will continue to give him a good, swift kick in the butt when he puts forwards words in “defense” of the sorts of individuals who have posted in support of Mel Linduaer and John Greaney.
The same standards of ethical behavior that apply in all fields other than stock investing apply in the investing advice field too. Perhaps not today. But following the next price crash they will. Or else we will not make it. We cannot make millions of middle-class people responsible for their own retirements and then deny them access to accurate and informed and honest reports of what the last 33 years of peer-reviewed research tells us about what works for the long-term investor. I do my good friend Jack no favors by suggesting to him that it is somehow “okay” to post at the boards at which the sorts of individuals who have put up posts in “defense” of Mel Linduaer and John Greaney also participate. That is financial fraud. Financial fraud is a felony under the laws of the United States. That means prison time. I will not bow to the intimidation tactics of my good friend Jack and behave in a manner that would in all likelihood increase the length of the prison sentence that will be handed out to him following the next price crash.
The 12-year cover-up is an extraordinary event. It is the biggest case of financial fraud in U.S. history. I give you that one, X.
My site presents the extraordinary evidence needed to make the case. I put forward a post to the Motley Fool board on the morning of May 13, 2002, pointing out the errors in the Old School retirement studies. Not one of those studies has been corrected to this day. That tells the tale. There are thousands of articles at this site showing how the 12-year cover-up was carried out and maintained. Anyone who wants to know why we are in an economic crisis today has the material he or she needs to come to a full understanding of the matter available for his or her consideration. It is my job as a journalist to provide that material and I have done so.
Money and power and influence corrupt human beings. That story is as old as the human race.
The Wall Street Con Men pushing their smelly Buy-and-Hold “strategies” have a LOT of money and power and influence at their disposal. They have spread a LOT of corruption. And there are now millions of people suffering very, very serious consequences as a result.
Following the next price crash, enough of us will work up the courage to stand up to them and to get the Old School SWR studies corrected. From that point forward, it will be easy sailing. We will bring the economic crisis to an end and bring on the greatest period of economic growth in U.S. history.
Or we won’t.
If we don’t, we will all go down together. That would make me very, very, very sad.
But if that sad turn of events plays out before us I will at least have the small consolation of being able to say that I gave this thing my best possible shot despite the mountain of resistance that I faced from you Goons and from the Wall Street Con Men who support and encourage you.
I can do no more and I can do no less.
I naturally wish you all the best things that this life has to offer a person regardless of what investing strategies you elect to pursue.
Rob
Anonymous says
Rob,
Replace Jack’s name with your name in the headline and then I think you got it 100% right.
Dizzy says
Since, in your mind, ignoring you constitutes lies and illegal corruption, it’s understandable why you see corruption everywhere.
Rob says
Replace Jack’s name with your name in the headline and then I think you got it 100% right.
It’s possible that I am lying to myself, Anonymous. All of us humans are flawed in that respect.
But I follow the laws of the United States. I don’t advance death threats. I don’t demand unjustified board bannings. I don’t put forward tens of thousands of acts of defamation. I don’t threaten to get academic researchers fired from their jobs. And I don’t encourage others to do so or associate with others who do so or tolerate others who do so or fail to speak out when others do so. That’s a big difference between me and my good friend Jack Bogle.
The laws of the United States are there to protect us all and to keep us all on a good path. That’s my sincere take re this terribly important matter, in any event.
I wish you the best of luck in all your future life endeavors.
Rob
Rob says
Since, in your mind, ignoring you constitutes lies and illegal corruption, it’s understandable why you see corruption everywhere.
You have a right under the laws of the United States to ignore me, Dizzy. You don’t have a right to engage in financial fraud. You don’t have a right to advance death threats or to demand unjustified board bannings or to put forward tens of thousands of acts of defamation or to threaten to get academic researchers fired from their jobs.
That’s my sincere take re these terribly important matters, in any event.
My best and warmest wishes to you and yours.
Rob
Anonymous says
Market up like 120% since you called for a 65% drop. Nailed it…
Rob says
Any gains that take place after the market is already overpriced disappear in the long run, Anonymous. Do you see that?
The market could go up 1,000 percent and all it would mean is that the losses you would experience at later times would be that much bigger.
All that count are real gains. The real gain for the U.S. market has been 6.5 percent real per year going back for as far back as we have records. If you are thinking that you are going to see something significantly more than that, you are living in a fantasy world.
And, no, it is not mean of me to tell you that. It is your friends who tell you the realities. The first step to becoming able to invest effectively for the long run is learning the realities.
The Wall Street Con Men would tell you the same if there weren’t a buck to be made in encouraging your fantasy.
Or so Rob Bennett sincerely believes, in any event.
My best and warmest wishes to you and yours.
Rob
Anonymous says
Any gains that take place after the market is already overpriced disappear in the long run, Anonymous. Do you see that?
No, I’m looking at where the S&P 500 is trading today, and I most certainly do not see that.
Rob says
You are describing the difference between Buy-and-Hold and Valuation-Informed Indexing. BH takes a short-term (where the S&P 500 is trading today) perspective and VII takes a long-term (where the S&P 500 will be trading 10 years from today) perspective.
It’s okay if you want to take the short-term perspective with your money.
It’s NOT okay when you try to force that short-term perspective on others. That’s when prison sentences enter the picture.
My best wishes.
Rob
Evidence Based Investing says
VII takes a long-term (where the S&P 500 will be trading 10 years from today) perspective.
What did VII say about the S&P500 on May 1, 2005 ?
Rob says
You can look it up yourself, Evidence.
I am sure you can find out on the internet what the P/E10 level was on May 1, 2005.
Plug that number into The Stock-Return Predictor and you will know the most likely annualized return for that 10-year period.
But of course you knew that when you asked the question. I wonder why you played dumb.
Rob
Hello says
VII takes into account where you like to think the SP500 will be in the future, not where it will be. You are like a doomsday cult that keeps predicting the end of the world and changes their predictions when the don’t happen.
Rob says
No. None of that is so, Hello.
Valuation-Informed Indexers use the last 34 years of peer-reviewed research in this field (based on the 145 years of historical return data to identify where stocks WILL be priced in 10 years, assuming that stocks continue to perform in the future at least somewhat as they always have in the past. We recognize that it is at least theoretically possible that stocks might for the first time in history begin behaving as the Buy-and-Holders say the do. But we believe that the smart thing is to go by what the peer-reviewed research says.
And there is nothing even a tiny bit doomy about it. If stocks continue in the future to behave somewhat as they always have in the past, we are going to see another price crash sometime within the next few years. That will bring prices DOWN. All rational investors WANT to see prices come down. Most of us will be buying stocks for many years to come. Why wouldn’t we want prices to be as low as possible.
It’s true that Buy-and-Holders don’t like to see lower prices. That’s because they are following an EMOTIONAL strategy. They are trying to persuade themselves that today’s prices represent something real. Another crash will make it impossible for them to maintain confidence in that fantasy.
There’s nothing bad about being able to buy stocks at good prices. It only SEEMS like something bad to Buy-and-Holders because it brings on the shattering of an illusion. I see it as the job of all investing analysts to help people AVOID falling prey to illusions in the first place. If we all were doing our jobs, no one would still believe in Buy-and-Hold today and no one would be unhappy to have an opportunity to buy stocks are reasonable prices again.
That’s my sincere take re these terribly important matters, in any event.
Rob
Anonymous says
We recognize that it is at least theoretically possible that stocks might for the first time in history begin behaving as the Buy-and-Holders say the do.
So at least in theory, when the Lucky VII timing system says stocks should drop 65%, they can instead rise 120%? Theoretically, of course.
Rob says
Yes.
Theoretically, anything can happen. I don’t have a crystal ball, Anonymous.
Rob