I’ve posted Entry #221 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called You Need to Read Irrational Exuberance Four Times to Pick Up on All Its Insights.
Juicy Excerpt: I remember the second time I read Irrational Exuberance. I was at the beach with my family. Shiller’s words were hitting with as much power as they did the first time I read the book several years earlier. I kept interrupting my wife’s reading of her own book to express my amazement over the experience. It was as if I had never read the book before. It was a strange experience.
It is bad enough that your daily content is repeats of things you posted a long time ago. Now you are repeating posts you made several times in the last few weeks.
Read it again, Goon friend. It will do you good!
Rob
That is a daily occurrence with what little readers you have. We are always reading your repeats.
Don’t you think it is time for some new content? Reruns eventually get boring.
Time has been suspended until your prison sentence is announced, Anonymous.
We know from our 13 years of discussions that there are hundreds of academic researchers that want to do honest work. And that there are hundreds of bloggers and journalists who want to do honest work. And that there are thousands of investment advisors who want to do honest work.
Not too many of them want to see their careers destroyed by the Buy-and-Hold Mafia. So we are the luckiest generation of investors who ever walked Planet Earth. Yet we are living through an economic crisis because not enough of us have worked up the courage to share what we know and to participate in a nation-wide learning experience that will teach us even more.
We are close. We are on the one-yard line. Once the prison sentences are announced, we will be enjoying 34 years of powerful insights all in the space of about six months. The good news here is 50 times more good than the bad news here is bad.
We were smart to adopt laws making financial fraud a felony. Integrity matters. Yes, even in the investing advice field.
My sincere take.
Rob
So, what you are saying is that you don’t have any immediate plans to offer up fresh material. If you are waiting for prison sentences, then I guess you will be waiting for an eternity.
I’m not going to waste my time writing about an investing strategy that was discredited by the peer-reviewed research 34 years ago, Anonymous.
All of my material is fresher than any material offered by any Buy-and-Holder because all of mine is rooted in Shiller’s 1981 finding that valuations affect long-term returns. That was the missing piece of the puzzle that pulled everything together into a coherent whole.
There are going to be lots of new insights in days to come. Hundreds of them. But that will happen after the announcement of the prison sentences, when we have everyone participating honestly and openly and constructively in the discussions.
I think you are wrong about having to wait for an eternity for the prison sentences. I think that a lot of people are going to be mad at you Goons after they have lost most of their life savings. I think the emotion is going to flip and we are going to see tens of thousands of civil suits filed and widespread demands that prosecutors bring criminal proceedings.
But I don’t have a crystal ball. We’re just going to have to wait to see how things play out.
I naturally wish you all good things.
Rob
Description of the “happiness formula”: http://www.bbc.com/news/science-environment-28592838
Key point: “The study also finds that your immediate sense of happiness depends on the size of the gap between what you achieve and what you expect.”
Your weekly achievements amount to a Value Walk article and a few robotic comment replies. Your expectations include $500 million and control of every finance board. That sounds like a pretty sizable gap.
I have my name on the most important piece of peer-reviewed research published in this field in the past 30 years, X. I have had a good number of the biggest names in this field tell me that they have read every word that I have written about Valuation-Informed Indexing, that they think that the shift from Buy-and-Hold to VII is the biggest advance ever achieved in this field and that they view my web site as the most important investing site on the planet.
When I started out, I did not think it possible that I would achieve 1/50th of what I have achieved over the past 13 years.
The only problem that has ever come up is that VII is so great that it makes the Buy-and-Holders feel bad that they didn’t come up with it. I have given every one of my Buy-and-Hold friends a warm invitation to share in the development of all these wonderful advances. I want to work WITH them, not against them. The only thing holding them back is their own envy. Envy is stupid. They are not only hurting millions of middle-class investors. They are hurting THEMSELVES. In a very big way.
People won’t be talking about your garbage intimidation tactics 100 years from now. People WILL be talking about the insights that I pass along on a weekly basis in that Value Walk column. I have been a huge success on the content side and a huge failure on the process side. And it is only the content side that matters in the long run.
I am going to continue doing what I am doing because I LOVE, LOVE, LOVE the results that being honest about this stuff has brought me over the first 13 years of our discussions. I want you on my side and on the side of the American people. But I cannot force you. So I am just going to have to accept that you are not yet ready.
When you are ready, I will be here for you.
That’s the absolute best offer that I can make.
If that’s not good enough to turn your heart, then I don’t have what it takes to turn your heart.
I wish you all the best that this life has to offer a person. You get that much delivered freely and with good cheer. Re the intimidation garbage, I have to ask that you try to find someone else. It’s not in me. I am not your guy re that smelly garbage.
Hang in there, old friend.
Rob
Rob,
The whole conversation is investing strategy. The score card is the size and performance of our portfolios. In the end, the words mean nothing without the results.
Many of us with buy, hold and rebalance strategies have experienced long term success. Talk all you want, but I follow the track record.
You are free to follow your path and I am free to follow mine. We just don’t agree with each other and that is the bottom line. Childish threats only hurt your case. Instead, try and communicate like a more rationale human being and maybe you could actually JOIN a conversation versus destroying it.
The retirement study posted at John Greaney’s web site does not contain an adjustment for the valuation level that applies on the day the retirement begins. That’s what I said on the morning of May 13, 2002. I was right. Every single honest person who has looked at the study has come to the same conclusion.
People need to know that. The focus of that board was early retirement. There were people at that board who were handing in resignations from high-paying jobs because of what they read about the Greaney study at that board. Lots of posters there were aware that Greaney neglected to include an adjustment for the valuation level that applies on the day the retirement began in his “study.” Even at that time he had a reputation as an insanely abusive poster. People didn’t speak up because they feared him. And now a lot of our fellow community members — people who we had come to think of as friends — are in the process of suffering one of the most devastating life setbacks that it is possible for a human being to suffer.
People are also afraid of Jack Bogle. Robert Shiller wrote a book about Valuation-Informed Indexing and he failed to include a chapter telling people what they most need to know — how much they need to adjust their stock allocations as valuations make their way up from fair-value levels to insanely dangerous levels.
There are millions of people who rely on what is said about stock investing in newspapers and magazines and web sites to plan their retirements. Those people have been deceived in very, very serious ways for 34 years running now. The massive act of financial fraud continues because everyone in this field knows about the brutally abusive and criminal responses of the Buy-and-Holders when they are challenged by accurate and honest reports of what the last 34 years of peer-reviewed research tells us about how stock investing works in the real world.
It stops here. It stops now.
I love my country. I will post honestly re safe withdrawal rates and re scores of other critically important investment-related topics.
Non-negotiable.
Deal with it.
My best and warmest wishes to you, my long-time abusive-posting friend.
I am happy to help you get your prison sentence reduced a bit. That’s not fraud, that’s charity. I don’t cross The Felony Line. Not in 13 years, not in 13 billion years.
Not this boy.
I can’t go for that.
Please try to find someone else.
Rob
We have heard your comments about John Greany. We don’t agree with your interpretation. Don’t ask us to lie. It is non-negotiable. Deal with it.
Then we wait until the crash and resume discussions at that time.
Fair enough?
Rob
If you are waiting for a 65% crash, followed by your $500 million windfall and goons going to prison, then you will probably need to come visit me at the local cemetery as I will be long gone by that time. I am not planning on passing away anytime soon, but old age will eventually catch up to me in another 50 years or so.
Fair enough?
I guess.
I don’t like this way of playing it.
But I think it would be fair to say that I don’t seem to have a whole big bunch of other options available to me.
When two sides in a dispute are both 100 percent inflexible re the key point of contention, the only thing to do is to take a step back and see if time causes circumstances to change in some way.
It’s nothing personal, Anonymous. There are things that I can do and there are things that I cannot do. You can’t teach a dog to meow and you can’t teach a cat to bark and you can’t teach Rob Bennett to say on the internet that John Greaney’s retirement study contains an adjustment for the valuation level that applies on the day the retirement begins.
I wish you all good things. Can you say the same back? You don’t have to. It would be nice if you did.
Either way, that’s my feeling towards you and the other Goons and the Wall Street Con Men too. I wish you all the best that this life has to offer a person. I believe that we all will be working together following the crash.
I don’t like the idea of waiting. But I don’t see any other options.
Please feel 100 percent welcomed to continue posting questions here as they occur to you. Some of your questions have had great value, in my assessment.
Maybe you are right, you know? I have been wrong about important things before. It could be that it is happening again. I don’t think that’s the case. But I don’t believe that any of us fallible humans can ever be 100 percent certain.
And please take good care.
Rob
I have had plenty of time to step back and think about it. I am 52 years old. That has given me plenty of time to see what works and what doesn’t work. I want something with a demonstrated track record and that is why I follow buy, hold and rebalance.
Good for you, Anonymous.
You’re in the best possible company. Millions of smart people follow Buy-and-Hold strategies.
I wish you the best of luck with it.
Rob
There is a difference between buy and hold and buy, hold and rebalance.
There’s a difference. But they are both loser strategies, according to the last 34 years of peer-reviewed research.
The research shows that stock investing risk is not stable but variable. To keep your risk profile constant, you need to be willing to adjust your stock allocation in response to big valuation shifts. Neither Buy/Holders nor Buy/Hold/Rebalancers do this.
I believe in following research-based strategies, Anonymous. I picked that one up from Jack Bogle. Nice fellow. Smart too. You should check him out.
Rob
Happy to compare my returns on buy, hold and rebalance, Rob.
Happy to compare going to prison vs. remaining a free man, Anonymous.
Rob
Show me one person that is under indictment for fraud as relates to any of your accusations.
The day on which there is one there will be hundreds, Anonymous.
The legal way for this debate to have proceeded would have been to have permitted honest posting going back to 1981. Had it been done that way, we would all have worked together to bury Buy-and-Hold 30 feet in the ground a long, long time ago.
We don’t have a time machine. We can’t go back to a place where this would have been done legally and without prison sentences assigned to those doing the dirty work.
The alternatives available to us today is to have relatively long prison sentences or relatively short prison sentences. The first indictment sets the dominos falling. The fact that we haven’t had any indictments as of this afternoon doesn’t mean mean that we are not going to have hundreds following the next price crash.
I want no part of it. I am trying to build a reputation as the guy who did more to OPPOSE this massive act of financial fraud than anyone else alive.
Please try to find someone else.
Rob
Rob says: “The legal way for this debate to have proceeded would have been to have permitted honest posting going back to 1981. ”
Uhm, Rob…….the internet did not exist in 1981. Not only that, it was a long time until there were financial discussion boards after the start up of the internet.
No, the internet didn’t exist. But the same tactics were being employed in the pre-internet days.
Shiller has made several comments suggesting that intimidation tactics have been directed at him. When the prison sentences are announced, all sorts of things are going to come out. I bet that Shiller could write an entire book about the intimidation tactics directed at him.
Rob Arnott posted here about two academic researchers who showed an interest in doing research showing the benefits of Valuation-Informed Indexing and were taken aside and told that their careers would be destroyed if they dared to “cross” the Wall Street Con Men by doing honest work.
And of course I reported here on discussions I had with Ravic Sethie at Columbia. He wants to do honest work. He is afraid to go there. Gee, I wonder why.
You can go back to the morning of May 13, 2002, and look at the responses we saw from my famous post pointing out the errors in the Greaney study. There were two types of reactions. All the people who were on the level (both Valuation-Informed Indexers and Buy-and-Holders) were saying how this was the most exciting discussion we ever had at the Retire Early board. And then there were the Goons threatening to kill family members of posters who posted their honest views. Huh?
I didn’t know about the financial fraud stuff on the morning of May 13, 2002, Pink. I was just telling people about the errors in the Greaney retirement study. I assumed that the errors would be fixed and that that would be the end of it. You Goons obviously knew about the errors before I posted or you wouldn’t have gone so nuts. You freaked out because you knew all along that Greaney was vulnerable if someone worked up the courage to post honestly. You were insanely defensive and there had to be a reason for that.
There are lots and lots of other examples of what I am talking about here. This site documents what happened from May 13, 2002, forward. I wasn’t personally involved in this matter before then. But it is clear that people knew about the problems with Buy-and-Hold long before I came on the scene and were keeping their mouths shut because it had become widespread knowledge that speaking honestly about Buy-and-Hold meant career death.
There is no intellectual controversy here. There never has been, at least not since 1981. All of the evidence is on one side and there is zero evidence on the other side. So what is there to discuss?
What we have is a power imbalance. The Wall Street Con Men have more power and money and connections than the rest of us and they have demonstrated a ruthless willingness to destroy anyone who exposes their con. That’s the deal. This is about power, not research. I believe Fama is real. He is a top-notch researcher. But Fama never even looked at long-term timing. So the idea that his research showed some legitimate grounds on which to conclude that price discipline might not be needed when buying stocks is pure fraud. Some believe it. I guess you could say it’s a mistake with those people. But it’s fraud for those using death threats and threats of career destruction to keep those who show an interest in exposing the con in line.
The significance of the internet is that it made it impossible for the Wall Street Con Men to keep the massive act of financial fraud going. The millions of middle-class investors whose lives were in the process of being destroyed now had a way to share what the research says and thereby protect themselves from the con. That’s where the Internet Goon Squads came into the picture.
This is why I focus on the prison sentences today. Lots of people want to make nice with the Wall Street Con Men. I tried doing it that way myself. But people who have been participating in a massive act of financial fraud are primarily concerned with going to prison. Showing them that they can help millions of readers or clients is not going to have much effect on them. The only way to change things is to get the prison sentences announced so that we can put the ugly side of this behind us and move on to all the exciting insights that have been opened to us by the last 34 years of peer-reviewed research.
The Wall Street Con Men should have jumped at the chance to come clean that I inadvertently presented them with my May 13, 2002, post. They cannot keep the con going indefinitely. So it is in their best interests to get everything out in the open and behind them. I don’t think there would have been prison sentences had they come clean in May 2002. Not too many people had been hurt in a serious way at that time and there’s a lot of genuine confusion re the content side of this. Had Motley Fool shut down Greaney, we would all be in a very different place today.
But we cannot change any of that now. Now there is too much stuff on the record for us to avoid prison sentences. I believe that even the Wall Street Con Men and you Goons would play it differently if we could go back in time. But it’s too late for that. Given where we stand, it’s best for every single person involved that everyone come clean by the close of business tomorrow. But the Goon brain doesn’t see things that way.
Anyway, it’s been going on for 34 years, going back to long before the internet became a factor. The benefit of the internet is that we have time-stamped posts to document the con from May 13, 2002, forward. Those time-stamped posts will be a huge help in all the trials. This story shows the tremendous power of the internet to do good as it achieves its potential as a new communications medium. That’s a very exciting aspect of the story, in my assessment.
Come clean tomorrow, Goon!
I know you won’t. But it doesn’t hurt to ask every now and again.
Take care, man.
Rob
“No, the internet didn’t exist. But the same tactics were being employed in the pre-internet days.”
Can you please supply even one piece of evidence that supports this fantasy?
The most obvious piece of evidence is that most investment advisors were not warning people of the dangers of Buy-and-Hold in those days, Laugh.
Buy-and-Hold was a legitimate belief once upon a time just as once upon a time there was a legitimate belief that the earth was flat. If you don’t know any better, the idea that the earth is flat seems to make sense. You look around you and, as far as you can tell, the earth is flat. But at some point in the history of humankind, we learned that, no, what appears to be so is not indeed so — the earth is actually round.
Do you think that everyone switched from believing that the earth is round to believing that the earth is flat in one day? I do not. I wasn’t there. But my strong hunch is that it took a good number of years for this exciting news to “take” with most people. People who had learned the truth spoke up at the dinner table and said: “You know, it now appears that the earth is actually flat, not round.” And the people eating with them said “sure it is” or “huh?” or “that can’t be!” or “you must have forgotten to take your meds” or “who do you think you are, challenging what all the experts on this subject know to be true?” or “what a perfectly dangerous idea!” and on and on and on and on.
People don’t accept changes in fundamental beliefs in one day or one week or one year. It takes a long time for powerful new ideas to sink in. The finding that being willing to exercise price discipline when buying stocks is 80 percent of the investing project is the most important finding in the history of investing analysis. So no one should have been surprised that Shiller’s “revolutionary” (his word) finding was not universally accepted within 24 hours of the time his peer-reviewed research was published.
But 34 years? Huh?
What do you think happened, Laugh?
I don’t know what date you want to use as the date that the internet started. If you go from the date in 1981 that Shiller published his research showing that there is zero chance that a Buy-and-Hold strategy could ever work for a single long-term investor, it’s a lot less than 34 years. But it’s a good amount of time. How do you explain why Valuation-Informed Indexing did not take over the world in that amount of time?
Have you stopped to think how much money there is to be made by being one of the first to promote the first true research-based investing strategy? The $500 million that will be coming to me in my settlement is just the beginning. There will be hundreds of people who will become multi-millionaires by being the first to show millions of middle-class investors how to retire many years sooner while reducing the risk of stock investing by 70 percent. There were many millionaires made during the early years of computers and the internet. These advances in the investing realm are 100 times more important. Stock investing is how people achieve financial freedom — you can’t get more important than that in a capitalist society. We are going to have hundreds if not thousands of new Bill Gateses and Steve Jobses once we open the internet to honest posting on the implications of Shiller’s findings. What is your explanation for why we have not had thousands of people step forward to claim that money?
It’s not only the intimidation tactics of the Buy-and-Holders that have caused the delay. There is real cognitive dissonance in play here too. The Post Archives show that. But it is not only cognitive dissonance causing the problem. We have seen at board after board after board that most people LOVE learning the realities of stock investing. We have seen that going back to the first day. So there is no way that this could have been hushed up in all those pre-internet years without a lot of funny business going on. There were threats of career destruction then too. It’s human nature for people making lots of money (and the Buy-and-Holders have made HUGE amounts of money!) to protect the turf that permits them to make that money. To argue that there wasn’t funny business going on in the pre-internet days is silly.
It doesn’t matter all that much. If the Buy-and-Holders want to say that the corrupt stuff started on the morning of May 13, 2002, they can say that. My strong hunch is that Shiller will be coming out with a book-length description of the intimidation tactics that were directed at him in those days once he feels safe in telling the true and full story. But if we never find out about all the ugly stuff that went on in pre-internet days, does it really matter? We sure don’t have to look hard to find out what happened in post-internet days. We have hundreds of thousands of time-stamped posts explaining in great detail and in great depth precisely how the Buy-and-Holders used their wealth and power to crush those who tried to do honest work in this field. So we know what the story is. There’s zero reason to believe that things were proceeding on an entirely different track in the days before the internet was around. I mean, come on.
Humans are humans, Laugh. Humans go on the attack when they feel threatened. Valuation-Informed Indexing is a huge advance. So it constitutes a huge threat to those pushing the opposite strategy, the purest and most dangerous Get Rich Quick strategy ever concocted by the human mind (that’s obviously in contrast to VII, which is the first true research-based strategy). So the Buy-and-Holders responded with felonious behavior when they saw that their cash cow was about to go down. Gee, what a surprise! Whoever would have thought that humans could respond in such a way to losing their livelihoods? Has anything like this ever happened before? Some of this stuff is so darn hard to figure out!
There’s a reason why as a society we adopted laws making financial fraud a felony, a crime calling for the imposition of prison sentences. The behavior we have seen over the past 13 years is behavior that has been going on since the beginning of time. This is the worst example of it. The promotion of Buy-and-Hold in the 34 years since the peer-reviewed research showed that there is precisely zero chance that it could ever work for a single long-term investor has caused more human misery that any earlier finance-related crime in the history of humankind. But the basic story here is not a new one. We have seen this general story play out over and over and over and over again. That’s why we enacted laws to protect ourselves from the sorts of individuals who have put up posts in “defense” of Mel Linduaer and John Greaney and Jack Bogle. D’oh!
Do you know why this particular act of financial fraud has been so massive in scope?
It’s because the advance is so massive and life-affirming!
The stronger the appeal of the challenge to the conventional thinking is, the more brutal are the intimidation tactics that will be used to silence those seeking to spread the word re the new idea. VII is the biggest advance we have ever seen in this field by a factor of 500. So the brutality we have coming from the other side has been off the charts, worse than anything we have ever seen before in this country by a factor of 500.
The good news is that things end up in the same place — we put some in prison, we bring civil actions against a much larger number, those who lead the opposition to the discredited idea become wealthy beyond their wildest dreams and the entire society forges forward in a very, very big way, We all live better lives for many years to come. Good for us!
There was funny business going on prior to the introduction of the internet on the scene, Laugh. I am sure of it. I can’t document much of it because I was not around. But I can document everything that has happened since the morning of May 13, 2002, in great detail. That’s the documentation we need to tell this story in a full and clear and understandable way to the millions of middle-class investors who need to come to terms with why they are in the process of losing most of their life savings. The Post Archives available to us today get the job that needs to be done here done well. So we are set.
I wish you all the best that this life has to offer a person.
Rob