Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Nothing will happen for you following the next price crash Rob. You might actually get into the market this time around same as everyone else who is using buy, hold, and rebalance. But who knows maybe you will be too scared or not follow your own system again. I can’t imagine you have much of a nest egg left after 18 years of 3% returns and no income unless you got an inheritance of some sort.
Meanwhile, the rest of us, who have experienced triple digit returns in the last few years will continue locking in large portions of that run up by rebalancing and making our portfolios more conservative as we age. After all you have been calling for a crash for years and it hasn’t happened so who’s to say we won’t experience a few more years of great returns and locked in profit via rebalancing before the inevitable crash.
What makes you think this time around will be any different from the last crash? Your position as nothing more than a complete laughing stock in the realm of the financial world will remain. There are plenty of other people calling for a crash without your conspiracy theory lunacy.
Why are other people calling for a crash if the “science” of Buy-and-Hold is settled, Anonymous?
Buy-and-Hold says that price changes are random. If price changes are random, you can’t predict crashes. Are these people you refer to who are saying these things doing so in defiance of the “science”?
The Buy-and-Holders had a wonderful idea of rooting investing advice in peer-reviewed research. That’s what I love about them. That’s why I was a Buy-and-Holder myself until Greaney threatened to kill my wife and children and 200 people who had long considered themselves friends of mine endorsed his post. A strategy that causes people to do things like that ain’t science. So I gave it up on that day and the rest is history.
The Buy-and-Holders were right in the early days when they were serious about the idea of using research to support their advice. They betrayed their own vision when Shiller published his “revolutionary” (his word) research and they failed to incorporate his findings into their model (That’s what Valuation-Informed Indexing is — Buy-and-Hold updated to reflect the peer-reviewed research of the past 33 years as well as what came before it). I have just taken the vision of the Buy-and-Holders to the next step. Valuation-Informed Indexing is an updated version of Buy-and-Hold, one that actually works in the real world.
There are two reasons why the Wall Street Con Men have not adopted the necessary changes. One is a phony pride. They are Big Shots and they don’t like the idea of saying the words “I” and “Was” and “Wrong.” The other is money. Al of us humans possess a weak human nature that is drawn to Get Rich Quick strategies. Buy-and-Hold is (inadvertently, not intentionally — but still) the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind. So it is possesses an amazing short-term appeal and has brought in billions of dollars of profits to the Wall Street Con Men while destroying the lives of millions of middle-class investors and taking us down a path that ends with our economic system reduced to a smoking ruin.
I want no part of any of that. No part whatsoever. My dream is to become known all over the internet as the most severe critic of Buy-and-Hold who ever walked Planet Earth. I think I’ve got a pretty darn good start on success re that particular project. No?
That makes me unpopular today. So be it, you know? A field in which honesty about what the peer-reviewed research says is banned as the first order of business is a field re which I prefer to be on the outside looking in for the time being.
People lose interest in Get Rich Quick schemes when they lose most of their accumulated life savings as a result off being tricked into following them. Look at what happened with investors in the Madoff fund. They sang the guy’s praises until they lost all their money. Then they demanded that he be imprisoned for his acts of financial fraud. I think it would be fair to say that our mutual friend Jack Bogle is Bernie Madoff times 5,000 when you consider the number of human lives he has destroyed with his support for Mel Lindauer and John Greany and the individuals who have seen fit to post in “defense” of these two.
There will be hundreds of thousands of lawsuits filed following the next price crash when people learn about the trickery that was employed to separate them from their money. There will be thousands of people being led off to prison cells. I will put in a word for you. I will point out the pressures that people like Wade Pfau and Bill Bernstein and my good friend Jack Bogle faced. I will make every effort in the world to be fair and then something even a bit more than just fair.
But I ain’t interested in going to prison along with you. No friggin’ way. Find someone else, you know? It’s not on my bucket list.
I’ll help the people bringing lawsuits against you and I’ll help you too. I have sympathies on both sides and so I will put forward what words I can to help both sides. That’s how I have been playing it for 12 years now and that’s how I will continue to play it for the next 12 billion. That’s me. But I would have to change my entire personality to be able to join you in this massive act of financial fraud. That’s a change that I am not capable of considering much less implementing. Please count me out re that smelly pile of garbage, old friend.
If you really were confident that you were not going to land in a prison cell, you would not be posting here on a daily basis. You know that, I know that, and anyone with half a grain of sense in his or her head who reads these pages now or at some later date knows that or will know that.
Keep posting if you like.
Or stop if you like.
Do whatever works for you.
Please just know that I don’t do financial fraud. One of my aims today is to have thousands and thousands of posts in the files making that point so that there is precisely zero confusion re this point in the minds of every single person who comes here to check the matter out.
I wish you well, man. But that’s where things stand.
Why will the next crash be worse than the last? Because people had excess funds when the last one hit. They felt that they could get through it by tightening their belts. Now people are fatigued by the economic crisis and they feel that they have already taken all the financial pain that they can take. This one will hurt much more. That’s why the P/E10 level will drop so much lower. That’s why you and all the other Buy-and-Holders will be selling this time. It’s only when the Buy-and-Hold zealots sell that a secular bear market hits bottom and that we finally gain the ability to start turning things in a positive direction.
It’s about psychology, man. The psychology and the economics go together. Bad psychology brings a bad economy and bad economics brings a bad psychology. It all feeds on itself. In the background is the Buy-and-Hold/Get Rich Quick garbage, which starts off all the bad stuff by persuading people to believe in fantasy worlds for which there are zero support in the peer-reviewed research of the past 33 years. When a society borrows trillions of dollars from its future, it causes a big heap of pain for a big bunch of people. All of the debt taken out on all the credit cards owned in this country doesn’t match the debt we incurred as a result of the lies about the peer-reviewed research told to us by the “experts” touting the Buy-and-Hold garbage.
Please let it be noted that I do not say that you INTENDED to cause this economic crisis. I don’t believe that. I believe that on one level of consciousness you really believe in Buy-and-Hold. But you have doubts. You lack confidence. That’s why my reports of what the last 33 years of peer-reviewed research says drive you crazy.
And the same is of course true of Bogle and Burns and Bernstein and all the others. I don’t believe that Bogle is the Frank Underwood of Personal Finance. That’s why I believe so strongly that his heart will melt following the next crash. Once Jack’s heart melts, I will be working with him to set things right. And you have my pledge that I will do everything in my power to get your (and his!) prison sentence reduced to the extent possible even then.
That’s the best offer that I can make to you, my old friend. The financial fraud stuff is just not my particular cup of tea.
I hope that all helps at least a tiny bit.
My best wishes to you and yours.
Rob
Anonymous says
On the contrary. Anyone that actually thought your silly prison nonsense had any merit would be avoiding this website like the plague. I know that, you know that and anyone with a grain of sense that happens to read these pages, knows that. People have a tendency to run from trouble.
Rob says
I certainly agree that people have a tendency to run from trouble, Anonymous.
You Goons are in a spot. You don’t know what to do.
Many of you HAVE run. The number of Goons who show up here is greatly reduced from earlier days. Greaney used to be able to put together an army. Now it’s two or three people. My guess is that you wouldn’t be able to get a ban at Motley Fool or Early Retirement Forum or Bogleheads if you were starting today.
You’re not just worried about the prison sentences. You’re worried about me taking over the Bogleheads board. You’re worried about civil cases for damages. You’re worried about bloggers writing about VII on an in-depth basis. You’re worried about all sorts of things.
I cannot state a reason why you still post here that makes logical sense. There is none.
If you want to work something out, I have made very generous offers. You never bite on those offers. So it is hard to believe that that’s it.
I suppose that you hope to intimidate me into agreeing to the sort of arrangement that you have with Wade Pfau. It’s hard for me to believe that you hold out much hope for something like that anymore. But that’s the only thing that I am able to come up with.
I don’t think that you believe that you are with certainty going to prison. Even I don’t say that it is a 100 percent certainty. I think that the odds are high. But I believe that you think the odds are less high than I think they are.
However, I am confident that you are worried. You are worried about prison and about other things. You want to be off the hook and the only way you can see that happening is if I agreed to some sort of Wade Pfau-like deal. That’s the only thing that makes any sense at all.
We’ll see what people say following the crash. I believe that at that time we will have lots of people trying to figure out what you were up to today. We’ll see if any people have better ideas.
For now, it doesn’t matter much in any event. I’m going to go by what I believe, which is that you have some fear about the prison sentences. But I can’t prove it beyond any shadow of a doubt. I’ll say that I believe and people can decide for themselves what they believe.
I wish you all good things.
Rob
Anonymous says
he number of Goons who show up here is greatly reduced from earlier days.
The hocomania routine does get old after a while for some. But don’t worry Rob, your core Goon fans will stay with you to the end!
Rob says
And I’ll continue doing what I can to get your prison sentence reduced a bit until the end, Anonymous.
None of us can be something that we are not.
Hang in there, man.
Rob
laugh says
People don’t post here because you are somewhat boring and have nothing interesting to say. Only those of us who find interest in your mental state stick around. It has nothing to do with prison.
There is no logical reason why being scared of prison would be linked to posting here on a daily basis.
“Why are other people calling for a crash if the “science” of Buy-and-Hold is settled, Anonymous?
Buy-and-Hold says that price changes are random. If price changes are random, you can’t predict crashes. Are these people you refer to who are saying these things doing so in defiance of the “science”?”
This was a really funny interplay. People make predictions and call for market crashing all the time, and they are almost always wrong. Why this would have anything to do with buy and hold is a mystery!
laugh says
I am not sure where buy and hold says that price changes are random. It seems like you are putting a bunch of stuff in a bucket and redefining ‘buy and hold’.
Rob says
I am not sure where buy and hold says that price changes are random. It seems like you are putting a bunch of stuff in a bucket and redefining ‘buy and hold’.
The book is titled “A Random Walk Down Wall Street,” Laugh.
If you don’t get that Buy-and-Hold posits that price changes are random, you don’t get the ABCs.
Buy-and-Hold posits that price changes are caused by unforeseen economic developments. That’s the foundational principle on which the entire model is built. The “unforeseen” part is important. Once an economic development becomes foreseen, it has its effect on price. From that point forward the effect of the market development is priced in to the market price and the development no longer has an effect on price. That’s so long as the effect of the economic development is as foreseen. If in the real world the economic development is something other than what was anticipated, then the development does have an effect on price, according to the Buy-and-Hold Model. But in those circumstances the true effect of the development was unforeseen. So it remains true that only unforeseen economic developments affect price under the Buy-and-Hold Model.
If only unforeseen economic developments affect price, price changes are random. That’s by definition. That’s why the book was given the name it was given. This is the core principle of the Buy-and-Hold strategy.
This is the reason why Buy-and-Holders are so unwilling to accept the 34 years of peer-reviewed research showing that long-term price changes are highly predictable. Shiller’s “revolutionary” (his word) finding of 1981 discredited the entire Buy-and-Hold Model. For 34 years now, we have known that the Buy-and-Holders need to throw out all of the work they have done and return to first principles with the aim of getting it right this time. All of the textbooks need to be rewritten. All of the calculators need to be redesigned. All of the strategies need to be revisited.
The Buy-and-Holders don’t want to take on this huge task. But they have no freakin’ choice! If we don’t make accurate investing advice available to people, our economic system will collapse. Correcting the huge mistake is not optional. It is imperative.
If the Buy-and-Holders were right, looking at valuations would be pointless. It would tell you nothing.
But the Buy-and-Holders are not right. There is now 34 years of peer-reviewed research showing this. There has never been a single piece of research supporting the outlandish Buy-and-Hold claim that price discipline is not 100 percent required in the stock market just as it is in every other market that ever existed.
The idea that it is not necessary to exercise price discipline when buying stocks cannot be reconciled with the peer-reviewed research in this field. ALL of the research supports Valuation-Informed Indexing. There is not even one study lending support to the preposterous Buy-and-Hold claim that long-term timing (price discipline) is always 100 percent required and of course always works.
Buy-and-Hold is a lie. It was a mistake once upon a time (Fama did not check long-term timing because indexing did not exist when he did his research and so he did not see the significance of checking this). But a mistake covered up for 34 years through the use of insanely abusive criminal acts is a lie. It is fraud. Financial fraud is a felony, Laugh. You will be going to prison following the next price crash. Along with lots of your Goon friends and lots of the Wall Street Con Men.
I naturally wish you the best of luck in all your future life endeavors.
Rob
Anonymous says
If only unforeseen economic developments affect price, price changes are random.
Indeed they are. Just as bond price movements are random. Though, depending on demand for capital, stock and bond “valuations” may fluctuate. You haven’t presented anything disproving any of this.
Rob says
depending on demand for capital, stock and bond “valuations” may fluctuate.
“Demand for capital” is an economic development. If demand for capital changed, that would be quickly reflected in a price (valuation) change for stocks. So this doesn’t have any effect.
I’m not saying that economic developments don’t matter. They obviously matter. It is the economic realities that support that 6.5 percent real return on which P/E10 is based. Economic factors matter but there are always a mix of positive and negative economic factors that mixed together produce a average return of 6.5 percent real after the passage of 30 years.
The P/E10 value tells you what your return is going to be in 10 years and 15 years and 20 years. That’s hugely important information. That’s 80 percent of the game. That’s the part that the Buy-and-Holders missed on (or else deliberately lied about as part in support of a marketing gimmick).
Buy-and-Hold is a Big Lie, Anonymous. The tone of every post you advance here shows that.
People will be going to prison for that Big Lie following the next price crash. You will be one of them.
Hang in there, man.
Rob
Anonymous says
“…only unforeseen economic developments affect price, price changes are random. That’s by definition. That’s why the book was given the name it was given. This is the core principle of the Buy-and-Hold strategy. ”
Rob, “he who defines the question, wins the argument.” I certainly do not subscribe to YOUR definition(s) of Buy and Hold, nor of the reason one might apply it. To me, as a self-described ACTUAL Buy-n-holder, it’s this simple:
* Markets tend to go up over time. Ownership of common stocks have proven to be the best way for an average person to participate in, and profit from this ongoing economic growth.
* It has proven impossible to determine which particular stocks will outperform, or when they might do so.
* Buying, and then holding a market-basket of ALL stocks that constitute the market, on a regular and recurring basis, without respect to ‘timing,’ removes the uncertainty of guessing which particular stocks will be best, or which is the best time to purchase them.
That’s it.
People can refine, add gimmicks, accessories, etc, or even purposefully misconstrue (AHEM, looking at YOU, Rob!) but to me, THIS is the essence of buying and holding. So, for you to go on a decades long intense daily public jihad against those principles, and the people who espouse, and apply them, seems frankly… well, insane.
You are free to use whatever market timing scheme, or other method you chose to invest, or course. But for you to characterize the above technique as “Get Rich Quick,” just to irk people and to hopefully draw attention to yourself, shows how both intellectually feeble, and also morally challenged you are. (I dare you to publish this.)
Rob says
If you add the phrase “short-term” before the word “timing” in your third point, I am in 100 percent agreement with you re the three points that you say define the Buy-and-Hold strategy.
So why has there been any friction?
The friction results from the fact that you are lying about what “Buy-and-Hold” means in your eyes. There now 135 years of historical return data available to us. The peer-reviewed research that I co-authored with Wade Pfau shows that Valuation-Informed Indexing has done FAR batter than Buy-and-Hold in 135 of those 135 years while Buy-and-Hold has proven to be superior in 0 of 135 of years.
You know that you have little hope of persuading anyone to follow a Buy-and-Hold strategy if you permit honest posting on the last 34 years of peer-reviewed research. So you advance death threats and demands for unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs any time someone posts honestly on the massive cover-up that keeps Buy-and-Hold alive one more day, one more week, one more month, one more year.
Financial fraud is the essence of Buy-and-Hold. Without financial fraud, Buy-and-Hold would not exist. Take away the financial fraud and Buy-and-Hold becomes Valuation-Informed Indexing.
I want no part of it. I have worked hard for 13 years now to build a reputation as the most severe critic of financial fraud alive on Planet Earth today.
We will see how it all works out following the next price crash. If I can get your prison sentence reduced a bit, I will do what I can.
My best wishes to you and yours, Goon friend.
Rob
Rob says
without respect to ‘timing’…
…But for you to characterize the above technique as “Get Rich Quick.”
If you are not engaging in long-term timing, you are not exercising price discipline.
If a strategy that fails to encourage investors to exercise price discipline isn’t the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind, I’d hate to think what the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind might look like.
Not this boy, Anonymous.
Please try to find someone else.
No can do.
I can’t go for that.
Rob
Dizzy says
“My guess is that you wouldn’t be able to get a ban at Motley Fool or Early Retirement Forum or Bogleheads if you were starting today.”
Then why not prove it and rejoin those sites? Username hocus2015 is available.
Rob says
Then why not prove it and rejoin those sites? Username hocus2015 is available.
I am not going to do that today, Dizzy. I’ve taken the hits that go with posting honestly at scores of sites. I am the world leader today. I’ll let someone else take the hits for a bit of time.
But I will be posting at Motley Fool again following the next crash. And at lots of other places. And I will be resending e-mails to the 30,000 names on the list of academic researchers.
We’ll see how that goes.
I wish you the best of luck with it.
Rob
Rob says
Please note that you are not starting today.
We had lots of great people at all of those sites before you Goons drove them away.
When I say that you couldn’t get a ban enacted today if you were starting today, I mean that you couldn’t do it if we had all those great people back at the sites.
We will have those people back in days to come. Or we will have new people just as great. So we will win in the end.
I don’t think that I can pull it off today. But the Buy-and-Hold Mafia has steadily been getting weaker ever since the morning of May 13, 2002. I think that the next price crash brings this massive act of financial fraud to a close.
We’ll see.
Rob
Drftr says
so, I gather you don’t want people to offer comments. Why do you even offer the chance to post them? If the goons are so weak, what do you have to lose by going back to the boards you were booted off of?
Rob says
I don’t understand what you are getting at re comments, Drftr. I am fine with comments. I obviously have a responsibility to point out when comments are posted as part of a massive act of financial fraud. For obvious reasons.
The Goons are much weaker than they were on the morning of May 13, 2002. They have so far been strong enough to keep Buy-and-Hold going. There are a lot of people who have a lot riding on it. Get Rich Quick strategies bring in the bucks for those promoting them if not for anyone else. But Buy-and-Hold is certainly not growing in popularity. When people have to resort to death threats to keep an investing “strategy” going, I think it would be fair to say that that strategy is living through its last days. I expect the next price crash to be the end for the smelly Buy-and-Hold garbage.
I don’t think that I have anything to lose by going back to old boards. But I’ve done an awful lot of that. I think it makes sense to let some others stir things up for a bit. I’ll be back at all of those boards and blogs following the next crash, Patience, grasshopper!
Rob
Drftr says
Could you point at a non-goon comment that has been posted here? If nothing else, then for the sake of guidance.
Rob says
You would have to go back a few years, Drftr. It’s been a long time since I can recall seeing a non-Goon comment.
John Walter Russell used to post here almost daily. He obviously was no Goon.
Wade Pfau posted here regularly for a time. He obviously was no Goon (although he certainly feared you Goons and he held back from saying some things because of his fear of you).
There was that fellow Arty. He was a non-Goon. He posted here a good bit for a time. He left when I called out Wade for flipping to the Goon side.
When I was a actively writing Guest Blog Entries, I used to get some of my fellow bloggers to post here on rare occasions.
There are others. But there has never been a large number of non-Goons. And for a long time now there have not been any.
When John Walter Russell was alive, he used to get more comments than I did. That killed me! I obviously was happy to see John get the comments. I think he is one of the best researchers who ever lived. I put him up there with Wade Pfau and Rob Arnott and Robert Shiller. But I had significantly more traffic than he did. So it amazed me that he got more comments.
I say things that drive people away.
That’s not my intent. I love to have people post comments here. But I don’t see what other conclusion a fair-minded person could draw at this point in the proceedings.
The key thing that I do is that I say: “Buy-and-Hold doesn’t work, the Buy-and-Holders got it wrong.” People don’t mind so much if you just say “this is what I think works” and you don’t say what doesn’t work. John used to do more of that. He had a gentle heart and it was not like him to say “Buy-and-Hold doesn’t work.”
I think you have to say what doesn’t work as well as what does. I think it is the journalist in me that causes me to see things that way. Journalists tell people things they don’t want to hear. They report on corruption. They get people mad sometimes. But they see that as the job. I think it is an important job. I am PROUD that I have led the effort to help people understand the dangers of Buy-and-Hold.
But people don’t like it when I do that. Usually, they don’t tell me. They just go away. Sometimes they do tell me. But a lot of people seem to feel that way about things. I don’t ever recall someone saying “Wow, I love how you tell it straight re those darn Buy-and-Holders!” Even people who have grave doubts about Buy-and-Hold don’t applaud me for taking them on.
I was talking to one of my priests the other day about this stuff (we had him out to the house). He said: “Why don’t you write Shiller and ask him to help you out?” Good question, Father! I’ve written Shiller. He responded when John asked him a technical question re the data. But when I wrote him seeking help with you Goons, he did not reply. Shiller does not want to get involved! That says a lot about why we are in this situation.
I think that EVERYONE should be talking openly about the dangers of Buy-and-Hold, just like everyone talks openly about the dangers of smoking and how it is bad to throw garbage on the ground and how we should make an effort to avoid racism and sexism. Causing an economic crisis is just as bad, in my assessment. But there’s some sort of social stigma that holds people back from pointing out that Buy-and-Hold has caused just as much human misery as lung cancer and destruction of the environment and racism and sexism. People certainly do not feel comfortable talking about it today.
I think it is a shame.
I think people realize on some level of consciousness that Get Rich Quick strategies are not the answer and they also realize that we have all played a role in letting the Buy-and-Hold stuff get so out of hand. We should have all spoken up way back in 1981, when the peer-reviewed research showing that there is zero chance that a pure GRQ approach could ever work for even a single long-term investor was published. The New York Times should have been running front-page articles every day back then about all the doors that Shiller opened for us all by showing that Buy-and-Hold was a terrible mistake.
When we all failed to act, we came to feel ashamed of ourselves for having fallen for a marketing gimmick. Now so much time has passed that we cannot bear to acknowledge what we have done. So now we keep it zipped. We are hoping that somehow we will get through this thing without having to come clean. But we lack confidence that we can pull this off. So the issue has become a super-sensitive one. We try to pretend that there hasn’t been fraud, that there is just a lot of natural confusion about what works and what doesn’t and that there is no need for prison sentences. These rationalizations just end up causing the prison sentences to grow longer, of course!
It’s hard to acknowledge a mistake. That’s human nature. What makes this one worse is that is is so obvious a mistake. Price discipline is the key in all markets other than the stock market. So it is simple common sense that long-term timing would always be 100 percent required. What knuckleheads we humans can be at times!
But it has of course become much worse than that with the passage of 34 years. It’s not just a mistake now. It’s a crime. The biggest act of financial fraud in U.S. history. So now we are really, really, really ashamed. How do we escape this trap? We need to get 10 people to stand up to you Goons and then we are home-free. But of course there WILL be prison sentences. It’s too late to avoid that at this point. People hate that. Did you ever know somebody whose teeth were rotting in his mouth and who was not willing to go to a dentist because he knew it was going to hurt? That person is making the problem worse with more delay. But he just doesn’t have the courage to face the problem he has created for himself. It’s sad.
That’s where things stand. People don’t like it that I talk frankly about this stuff. They tell themselves that it is uncharitable. I see it entirely the other way around. I see it as uncharitable NOT to speak frankly about this stuff. It is by living in denial for so long about what the peer-reviewed research says that we have created this enormous problem.
That’s my sincere take re these terribly important matters, in any event. I hope that these words shed a little light on the question of why we don’t see non-Goons posting here, Drftr. People are ashamed. People are scared. People are confused. The good news here is 50 times more good than the bad news is bad. We are the luckiest generation of investors ever to walk Planet Earth!
It sure would be nice to focus on all the good stuff instead of the prison sentences. But I have a hard time seeing how that is ever going to happen until a reasonable number of us work up the courage to take on you Goons and to do so without fear or apology or hesitation. People need accurate and honest information re how to invest their retirement money. That’s not optional, it’s imperative. I am sure!
My best and warmest wishes to you and yours, Drftr.
Rob
Anonymous says
Thanks for having enough intestinal fortitude to at least publish my comments, unedited. And I think it is quite good that your priest came and talked to you, and that the subject of your current activities came up in that dialog. I obviously have no clue whatsoever what the context or content of that dialog was, but on my own faith, I sincerely beg you to take to heart and then to closely follow whatever counsel he actually gave you (and not what you wish it would have been.)
Bonne chance.
Rob says
I sincerely beg you to take to heart and then to closely follow whatever counsel he actually gave you (and not what you wish it would have been.)
He said that getting the truth out about safe withdrawal rates is so important in the eyes of the Lord that I need to be willing to be burned at the stake like Joan of Arc. I said that I am a-scared of fire! He said that doesn’t matter, I need to focus on the long run.
Yikes!
Rob
Rob says
You don’t want the Pope mad at you. I’ll tell you that much.
If the Pope comes out with a dogmatic statement saying that the retirement study posted at John Greaney’s site does not contain an adjustment for the valuation level that applies on the day the retirement begins, I would back off a bit.
My sincere take.
Rob the Good Catholic Boy
Anonymous says
The P/E10 value tells you what your return is going to be in 10 years and 15 years and 20 years. That’s hugely important information. That’s 80 percent of the game. That’s the part that the Buy-and-Holders missed on
In fact, everyone knows, looking at historical data, P/E 10s have some correlation (around 0.4) with future returns.
Just as the fact that bonds are yielding 2% today means there’s a good chance bond returns over the next X years will be lower than average. Again 100% of investors agree on these points. What’s your point?
Rob says
There are hundreds of points that follow from this “revolutionary” (Shiller’s word) finding, Anonymous.
The one we started with back on May 13, 2002, is that the Old School retirement studies get the numbers wildly wrong. If you calculate the SWR pursuant to the discredited Buy-and-Hold Model, it’s always 4 percent. If you calculate it accurately, it was 1.6 percent at the top of the bubble. Someone who retired at the top of the bubble with a portfolio of $1.5 million could safely take out $24,000 each year to live on. The Buy-and-Holders were telling those people that they could safely take out $60,000 each year.
Buy-and-Hold has caused more human misery than any earlier Get Rich Quick scheme.
You are now pretending that it doesn’t matter to you that Greaney got the numbers wildly wrong in the retirement “study” posted at his web site. It sure mattered to Greaney! There were hundreds of members of the Motley Fool community who said that my post kicked off the most exciting discussion we ever had in the history of that board. Greaney’s response was to threaten to kill my wife and children if I continued to post honestly.
The difference between honest posting and dishonest posting on safe withdrawal rates matters a great deal to John Greaney. And it must matter a great deal to you too or else you wouldn’t post in “defense” of him.
And it obviously means a great deal to Jack Bogle or else Bogle would do something about the Lindauer matter. The guy who cuts people’s hair here in Purcellville wouldn’t permit his name to be used at a discussion board that permitted participation by the sorts of individuals who have posted in “defense” of Mel Linduaer, who has long employed threats of physical violence to keep people from posting honestly at that board about the last 34 years of peer-reviewed research. Bogle permits his name to be used at that board! Huh?????
We should permit honest posting on the last 34 years of peer-reviewed research.
It’s not even a close call.
There should be no controversy over this matter.
My take.
Rob
The Pope says
Robert,
You should stop lying to people. Listen to me. I am the Pope.
Rob says
Please don’t have them burn me at the stake, Mr. Pope!
It’s going to come out later that I really am a Saint!
No — Really!!!
Rob
Rob says
People make predictions and call for market crashing all the time, and they are almost always wrong. Why this would have anything to do with buy and hold is a mystery!
If Buy-and-Hold were proven, smart people would stop doing things that Buy-and-Hold says cannot be done. Shiller won a Nobel prize. He is obviously no dummy. He knows what the literature in this field says. So why does he believe that it is possible to call market crashes?
Shiller engages in short-term timing. I am with the Buy-and-Holders re that one. So I think Shiller is in the wrong. But I know that he is no dummy. Shiller does that because the Buy-and-Hold case has obvious flaws in it and smart people see that and thus feel free to disregard what the Buy-and-Holders claim to have proved.
Shiller is wrong that short-term timing is possible. The Buy-and-Holders are wrong that price discipline (long-term timing) is not always required. The only way for all of us to get our thinking straight re all these questions is for us to open the entire internet to honest posting so that all of us feel free to say what we really believe. Then knowledge of how stock investing works will begin to advance again. The 34-year cover-up of the errors in the Buy-and-Hold Model discovered by Shiller in 1981 was a terrible, terrible mistake.
That’s my sincere belief re these matters, in any event.
I naturally wish you the best that this life has to offer a person.
Rob