Set forth below is the text of a comment that I recently posted to another blog entry at this site:
But, now, how is it that “Wall Street Con Men” can supposedly get wealthy over Grandma Betty buying and holding a market basket of stocks, cash-equivalents, and a dollop of bonds for thirty or forty years, with perhaps some annual rebalancing thrown in?
Taylor Larimore, co-author of The Bogleheads Guide to Investing, had a line that he often used during the time I posted with him at the Bogleheads Forum. He would point to his retirement home and refer to it as “the house that Jack built.” The idea was that it was by following the Buy-and-Hold strategies advocated by Jack Bogle that he earned the money to buy that house.
The Wall Street Con Men get rich by lying to people about the nature of the “gains” they “earn” in bull markets.
Taylor earned 6.5 percent real per year on his stock investments, just as everyone investing in the U.S. stock market has earned for 140 years now. To the extent that he overpaid for his shares, he obviously brought that return down. Bogle’s phony baloney investing advice obviously pulled down Taylor’s return dramatically. Get Rich Quick strategies always do. We now have 33 years of peer-reviewed research showing that not only are Get Rich Quick strategies not the answer, they are the problem.
There are millions of people like Taylor, people who have fooled themselves into believing that the Wall Street Con Men are doing them some sort of favor by lying to them about what the peer-reviewed research in this field says about how stock investing works in the real world. The Wall Street Con Men love to pretend that this might be the first time in history when a Buy-and-Hold strategy will work for one or two long-term investors because, when they can trick people like Taylor into believing that, the Con Men get credit for creating those false and phony and temporary and meaningless “gains.”
When Bernie Madoff was exposed, there was a thread in which people were referring to what he did as “fraud” and one guy came on the thread and said “oh, it wasn’t fraud.” Why wasn’t it? Because this fellow got out of the fund before it collapsed and was ahead by more than $1 million. This fellow had “a house that Bernie built” So to this fellow it was Saint Bernie who was operating the fund, not some con man who merited prison time for his trickery.
But of course the reality is that Bernie was a con man. And of course the reality is that Old Saint Jack is one too. If Buy-and-Hold weren’t a con, we never would have seen the Buy-and-Holders put forward a single death threat or a single demand for a single unjustified board banning or a single act of defamation or a single threat to get a single academic researchers fired from a single job. People who are promoting legitimate strategies do not behave in that manner. Not ever.
People who make use of such tactics have something to hide. People who make use of such tactics are operating a con. It may be that they conned themselves before they conned others. That happens. Saint Bernie told a reporter for New York magazine that he felt that he was doing good for others. My good friend Jack has said similar things.
The bottom line is that those are the marks of a con and Academic Researcher Wade Pfau checked the entire literature and never was able to find the tiniest sliver of research-based support for Buy-and-Hold anywhere in the academic literature. And of course the response of you Goons was to threaten to get him fired from his job. And Old Saint Jack had no problem with that. That tells the tale, Yogi.
There are always some people who make money from a Ponzi scheme. The difference between the Ponzi scheme built by Old Saint Bernie and the one built by Old Saint Jack is that the one built by Old Saint Jack destroyed 10,000 times more human lives. Old Saint Bernie let us all off easy. Old Saint Jack has us on the path to the Second Great Depression.
If you think that’s funny, then you think that’s funny.
I don’t get the joke.
And you know what else? I have a funny hunch that Grandma Betty is not going to find the joke too terribly funny when we all find ourselves on the other side of the next price crash.
But we’ll see, right?
I’ll be there and you’ll be there and Old Saint Jack will be there and Grandma Betty will be there. We’ll all talk it over at that point in the proceedings and decide together how long the prison sentences shall be.
Could anything be more fair?
Rob
Gee, Rob, it all sounds so terrible. How can we bring this disaster all to an end and save the world?
The stuff that is a disaster is all against the laws of the United States. We are working through a process by which this bad stuff will be brought to a close. Following the next price crash, you Goons will be put in prison. The rest of us will then be free to share honest and accurate reports re what the last 34 years of peer-reviewed research shows about how stock investing works in the real world.
The good stuff here is 50 times more good than the bad stuff is bad. It is only you Goons who will suffer a true disaster because it is only you Goons who will be going to prison.
I hope that helps a bit, Anonymous.
Rob
I am confused. If the laws were broken, why are there no charges? What information has not been shared?
Why did it take years before the Bernie Madoff fraud was exposed?
We humans have a weakness for Get Rich Quick schemes, Anonymous. It is built into us.
Buy-and-Hold is pure GRQ. It has made its promotors BILLIONS of dollars.
The problem is that it has cost the millions of middle-class investors who fell for it TRILLIONS in losses. Our economic system cannot stand unless we find a way to overcome you Goons and get accurate and honest information about the last 34 years of peer-reviewed research out to people. This is not optional. It is imperative.
We permit honest posting in all other areas. The difference here is that the Wall Street Con Men are rich and powerful people.
But do you not think that people are going to unite in opposition to them following the next crash? I sure do.
If you don’t believe that it is going to happen, we will have to wait and see. It would not be at all kind of me to fail to mention to you where I think things are headed. I am not God. I could be wrong. But I am being 100 percent sincere and kind in telling you where I think things are headed.
I hope that helps a bit.
Rob
Bernie was arrested, so why is this not the case here if you say laws were broken. Either they have been broken or not.
As for posting, what hasn’t been said? What am I missing?
Madoff wasn’t arrested immediately, Anonymous. He got away with his fraud for years.
Why?
Because we humans have a weakness for Get Rich Quick investing strategies.
When did Madoff finally get arrested?
When his con was exposed.
So it will be with Buy-and-Hold. The next crash is the end.
People don’t like being conned.
What’s not being said is that there is 34 years of peer-reviewed research showing that Buy-and-Hold is a con. Some keep quiet because they make money from the con. Some keep quiet because they know that the Buy-and-Hold Mafia will destroy their careers if they expose the con.
I don’t keep quiet. I do all that I can to expose the con. I expect to make my millions in that way, in a way that helps people.
I hope that helps a bit.
Rob
You have already made your opinion known. People can agree or disagree. End of story. Move on with your life. Everyone else has.
I love my country, Anonymous.
Your criminal acts have destroyed the lives of millions of middle-class people.
I intend to see the laws of this country applied to you. I intend to see you sent to prison.
There is nothing for you to agree about or disagree about. I am telling you what I am going to do. Only I can decide what I am going to do.
It would be cruel for me to have a plan to see you sent to prison and not tell you about it. If I did that, you might end up going for a longer time because you would continue committing your acts of financial fraud thinking that perhaps no one would seek your prosecution. By me telling you what I am going to do, I have spared you from that cruel fate.
I hope that makes sense to you. But, whether it does or it doesn’t, that is certainly how I am going to proceed.
I only wish that everyone in this field had proceeded that way going back to when Shiller published his “revolutionary” (his word) research in 1981. Had Jack Bogle come clean in 1981, you wouldn’t be on your way to prison today. I wish it had played out that way for your sake, for my sake, for Bogle’s sake and for the sake of the millions of middle-class investors whose lives have been destroyed.
But it didn’t. Whachagonnado? The best we can do today is to get you put in prison by the close of business tomorrow. In charity, that’s what I am aiming for. If I miss that deadline, I will aim for the second best choice — getting you placed in a prison cell by the close of business on Thursday. And like that. Do you see?
We ALL should follow the laws of the United States. We ALL should encourage prosecution of those who fail to follow the laws of the United States. Because when there are millions to be made by Wall Street Con Men who fail to honor those laws, the temptation for them to not follow them grows too big for them to resist. If we care about the Wall Street Con Men (and I certainly do — there would be no Valuation-Informed Indexing without the many amazing contributions of my good friend Jack Bogle), then we should be kind enough to do what we can to keep their prison sentences as short as possible. That’s certainly what I intend to do.
This IS my life. I don’t get the $500 million because I have a nice smile. I get the $500 million because I put you Goons in prison and thereby open the entire interest to honest posting on safe withdrawal rates and scores of other critically important investment-related topics.
When everyone else has moved on, there won’t be any more death threats. Or any more demands for unjustified board bannings. Or any more acts of defamation. Or any more threats to get academic researchers fired from their jobs. Or any more Old School SWR studies. Or any more Buy-and-Hold.
YOU should get on with your life by coming clean today. Prison sentences eventually come to an end. If yours had started on May 14, 2002, you might well be out on good behavior today. Every day you delay is a day later that your prison sentence comes to an end. That’s good for you how? Huh?
You say that my opinion is well known. That’s so. But it can always be even more well known. If I have called for your imprisonment 10,000 times, is there any harm in calling for it 30,000 times more? I sure cannot think of any. The insights of the past 34 years are the most important insights in the history of investing analysis. Is there some reason why we should want to limit the number of posts aimed at opening up those insights to every investor on the planet to 10,000? I sure cannot think of one.
I want good things for every investor on the planet. The good stuff begins on the day your prison sentence is announced. That will be Independence Day II for the people of the United States. I believe that that day will be declared a national holiday. I mean no personal offense in saying that. I believe that even you will support having that day declared a national holiday after you have some time to think over the matter. Which you will be getting a lot of in your new life in a prison cell!
I naturally wish you the best of luck all your future life endeavors, insane Goon poster friend.
Rob
Also, please don’t forget that the announcement of your prison sentence will change the history of this new communications medium. We have had thousands of community members express a desire that honest posting be permitted and then silence themselves after you Buy-and-Hold Goons threatened to kill family members of posters who expressed such desires. All that comes to an end following the announcement of your prison sentence, Anonymous.
So this is a two-fer. Pretty darn cool stuff!
My best and warmest wishes to you and yours.
Rob
The short version —
Why in the world would I want to walk away from $500 million?
Are you freakin’ nuts?!!!!!
Holy moly! Please find somebody else! I LIKE the idea of collecting a $500 million settlement payment. I love this freakin’ country!
Rob
“Why did it take years before the Bernie Madoff fraud was exposed?”
Because no one outside of the conspiracy knew he was running a fraudulent pyramid scheme until the defaults came, and customers blew the whistle.
(you are welcome, Rob.)
“I don’t keep quiet. I expect to make my millions in that way”
(eyeroll)
And, how’s that workin’ out for ya so far, slick? LOL
Hint: If no one (including immediate family, blood relatives, clergy) wants to buy any part of what you are selling, gee — -then maybe you don’t have such a hot-shot product, AND/OR, you ain’t such a hot-shot salesman.
Because no one outside of the conspiracy knew he was running a fraudulent pyramid scheme until the defaults came, and customers blew the whistle.
Anyone who cared to know COULD have known.
A CPA had written a letter to the SEC years before the defaults came showing that the numbers did not add up.
People wanted to believe. So they believed. It’s the oldest story in the investing field.
If people wanted to know that Buy-and-Hold is a con, they would know it. But they like the pretty lies that the Buy-and-Hold advocates tell them.
Until they don’t.
After the crash, the people who were taken by the Buy-and-Hold Lies will be as angry as the people who were taken by the Madoff Lies. And there will be a lot more of them.
When that day comes, I want to have as many posts in my file saying that I spoke up in OPPOSITION to the massive case of financial fraud as possible.
Please mark me down as OPPOSED to financial fraud.
Rob
Hint: If no one (including immediate family, blood relatives, clergy) wants to buy any part of what you are selling, gee — -then maybe you don’t have such a hot-shot product, AND/OR, you ain’t such a hot-shot salesman.
I have had THOUSANDS of my fellow community members tell me that they LOVE, LOVE, LOVE my stuff. And I have had a good number of the biggest names in the field say the same thing. That’s obviously why you Goons have felt a need to silence me since the morning of May 13, 2002. Acknowledge that you got the safe withdrawal rate wrong and Buy-and-Hold collapses, never to return. I want people to learn the realities. And you want to stop them from doing so. We are working at cross purposes.
There IS confusion. That is so beyond any doubt whatsoever. As you point out, my wife suffers from some cognitive dissonance re these matters. As did John Walter Russell in the early days. As did I in the early days. As did Wade Pfau in the early days. As does Jack Bogle. As does Robert Shiller. And on and on and on.
You’ve never heard me say different. It is not solely you Goons that are the problem here. And I intend to say that in my testimony to your jury. I have zero intention of being unfair to you Goons in any way.
But the fact that you suffer from genuine confusion does not justify the intimidation tactics. We need to overcome this massive confusion. We do that by telling the people what the pre-1981 research says and what the post-1981 research says and talking it all over as part of a national debate. As people participate in the debate, they will come to understand the realities and we will all move forward.
You Goons have made that impossible with your intimidation tactics. People won’t participate at boards and blogs where death threats are used to silence people. So we need to enforce the laws against financial fraud and have you Goons sent to prison. That is the obvious next step.
I have been HUGELY successful on the content side — successful beyond my wildest dreams. I have been unsuccessful on the process side. But every sign has been that I will be wildly successful on the process side as well once your prison sentence is announced, Anonymous. That’s the key to getting everything on a better track than it has been on for the first 13 years of out discussions.
I think that the next price crash will flip it all. I could be wrong. But that’s definitely what I think. So we are just going to have to wait and see how people react to losing most of the money they have been counting on to finance their retirements.
I hope that’s okay with you. Because that’s the way it is going to be.
Rob
And, how’s that workin’ out for ya so far, slick? LOL
It’s working out pretty darn well, since you asked.
I don’t have a penny in my hands today. But look at what I do have — the most valuable web site on the internet.
There are going to be millions of people looking for someone to sue to recover their retirement money following the next price crash. I have 13 years of Post Archives showing who was responsible for the massive 13-year cover-up. There are hundreds of billions of dollars to be made suing all the individuals and corporations who in some way, shape or form participated in this massive act of financial fraud.
Do you think lawyers are going to be too shy to sue these people after the crash? I sure don’t.
Do you think the people who have lost large percentages of their life savings are going to be too shy to sue these people following the crash? I sure don’t.
There will be congressional hearings looking into how this all happened. What web site do you think will be getting linked to daily from the THOUSANDS of web sites covering those hearings?
Gee, I hope I don’t go broke with all the offers to pay millions for this site that I will be receiving on a daily basis. And I hope I don’t get too tired handling the thousands of invitations to speak at conferences that will be coming my way. How will I be able to carry all the big bags of money? There is only so much that one man can endure!
I don’t support the massive act of financial fraud. I have done everything in my power to bring it to a quick end. But the full reality here is that I would not be collecting a $500 million paycheck had there not been a massive cover-up. Shiller published his “revolutionary” (his word) research in 1981. Had there been no cover-up, this site would have no special value, the stuff provided here would be provided at hundreds of other places.
Others saw the Campaign of Terror and ran in fear because of the money and power possessed by the Wall Street Con Men. I saw opportunity. I saw back in August 2002 that there was not one web site on the internet exploring the implications of Shiller’s “revolutionary” (his word) research in depth and I set out to be the first. Now I have a mountain of material that can be used by all of us to rebuild our broken economic system following the crash.
You Goons have caused me a lot of trouble. You also appear to be in the process of making me a very, very wealthy man. We are talking Steve Jobs levels of wealth. Thanks, Goons Friends!
I’ll take the $500 million and I will say “thank you!”, Anonymous. That’s how I feel about it. I love our system of government. Our laws against financial fraud have not been enforced in a reasonable manner for 13 years now. But what matters is not what happens in the early chapters of the story but what happens in the latter chapters of the story.
I’d rather have gotten the $500 million some other way. But the reality is that few of us ever have an opportunity to earn $500 million in ANY way. So when one comes along, we are smart to grab it. That’s what I have done. We are close to the finish line today. We are close to the day when I won’t be just talking about the $500 million but when I will be collecting it and then putting it to good use spreading the word about the first true research-based strategy. Good for me! Good for the people of the United States! Good for Shiller! Good for Bogle! In a funny way, good for you Goons! (Prison sentences eventually come to an end so it is best for you that yours get started soon)
I don’t like any of the ugly side. You Goons have shown us all a very dark side of human nature.
But the good here is 50 times more good than the bad here is bad. I am proud to have led this 13-year-long effort to open every board and blog on the internet to honest posting re safe withdrawal rates and scores of other critically important investment0-related topics. It’s truly exciting stuff!
Take care, man.
Rob
“I have had THOUSANDS of my fellow community members tell me that they LOVE, LOVE, LOVE my stuff. ”
No.
You haven’t.
Just another Bennett delusion.
Your jury will hear testimony from both sides before they decide on the length of your prison sentence, Anonymous.
That’s how our system works.
I wish you the best that this life has to offer a person.
Rob