Set forth below is the text of a comment that I recently posted to another blog entry at this site:
“The reason why I said “Grrrrr….” is that the circumstances here are unusual and call for long headlines in some cases.”
This is a microcosm of your entire thinking. You are completely deluded in thinking you are some special snowflake and your little VII is the more important than anything that has ever happened. Never mind that newspapers have existed for hundreds of years and covered every conceivable topic, Rob Bennett and his VII are so important that it now suddenly makes sense to make distractingly long and stupid headlines.
I agree with the part about this being a microcosm of my entire thought process, Anonymous.
I am not even close to being the only person who has noted that there is now 34 years of peer-reviewed research showing that valuations affect long-term returns. Just about everybody agrees with that. Including the Buy-and-Holders. Including you Goons. So that one inspires little controversy.
Where people go onto different tracks is re the question of What That Means.
It means that the entire Buy-and-Hold Model is in error. Buy-and-Hold is rooted in the idea that timing doesn’t work. Long-term timing has ALWAYS worked and has ALWAYS been 100 percent required. There are no reasonable grounds for questioning this. ALL of the evidence shows it. There is ZERO support for Buy-and-Hold in either the peer-reviewed research or in the historical return data.
This is where you Goons jump in and accuse me of believing in conspiracy theories. It is hard for people to believe that the experts in this field could have made such a mistake and it is even harder for people to believe that they would cover it up for 34 years.
They made the mistake because we were still in the early stages of developing our understanding of how stock investing works when Fama did his research in 1965. Bogle had not founded Vanguard yet at that time. So index funds were not available. So long-term timing was not a practical option. So, when people explored whether timing works, all they looked at was short-term timing. Short-term timing really doesn’t work. So Fama discovered something real and important. The finding that short-term timing doesn’t work is the second most important finding in the history of investing analysis. Fama deserves his Noble prize. Good for him.
But Fama never even looked at whether long-term timing works or not. So it is 100 percent absurd for the Buy-and-Holders to go into shock when someone notes that ALL of the research in this field shows that long-term timing ALWAYS works and is ALWAYS 100 percent required. Fama didn’t look at the question. So nothing Fama did even bears on the question.
Shiller was the first researcher to look at long-term timing and he found (in 1981) that long-term timing ALWAYS works and is ALWAYS 100 percent required. Every researcher who has looked at the question in the 34 years since has confirmed Shiller’s finding. So, again, there should be no controversy. All of the research on both questions shows the same two things: (1) Short-term timing never works and should be avoided; and (2) Long-term timing always works and must always be employed by every investor.
Once everyone knows this, we all live far richer lives than we ever imagined possible before. We reduce the risk of stock investing by 70 percent. We increase returns by enough to be able to retire five to ten years sooner. We no longer suffer economic crises. Investor Heaven!
So why have we seen a wee bit of friction over the past 13 years?
We have seen friction because the right thing to do when a mistake is discovered is to correct it IMMEDIATELY. I play the game Dominion. The publisher just published a new expansion. They messed up the printing of the cards. They put out a message within a day or two of the publication of the expansion saying that they will replace cards re which the backs were printed off center. That’s the way it is done when the mistake relates to a silly game. That’s the way it SHOULD have been done re stock investing. Had Bogle gave his “I Was Wrong” speech in 1981, we would today be enjoying the greatest period of economic growth in U.S. history. Bogle f’d up. Big time. He needs to come clean. By the close of business today.
That’s the story.
Bogle and the Wall Street Con Men have lots of power and lots of money and lots of influence. If the game company doesn’t acknowledge its errors, it will be fried by the public. Unfortunately, things don’t work that way in InvestoWorld. If you want to work in this field, you don’t point out that Jack Bogle has played the lead role in the greatest act of financial fraud in the history of the United States. Bogle’s 34-year cover-up has destroyed MILLIONS of middle-class lives. Bogle is Bernie Madoff multiplied by 5,000.
That’s not my doing, Anonymous. I LOVE Jack Bogle. I rank him as the second most important investing analyst of all time. I learned about the errors in the Old School SWR studies by reading Bogle’s book. I amy very, very, very proud of the investing strategy (Valuation-Informed Indexing) that I have developed. It is the first true research-based strategy. It is going to change the world in a very big and very positive way. VII would not exist if not for all of the wonderful insights generated by Bogle. All of the hard work that I have been doing for 13 years now is rooted in Bogle’s work. There is no bigger Boglehead alive on Planet Earth than Rob Bennett.
But the guy has played the lead role in the biggest act of financial fraud in the history of the United States.
What would you have me do about that? I think that I have responded in a very responsible way. I have sung Bogle’s praises to the skies. While also pointing out the massive act of financial fraud on an almost daily basis and making as many people as possible aware of it. I have balanced honesty and charity in the perfect mix. I have done the right thing over and over and over and over again. I have tried to help Bogle AND the millions of middle-class investors whose lives are in the process of being destroyed by his ongoing act of massive fraud.
Yes, that makes me different.
But, no, I am not the only person who has noticed that valuations affect long-term returns. Everybody who knows anything about stock investing knows that.
Everything I say follows logically from Shiller’s finding that valuations affect long-term returns. I am not an investing expert. I did not go to investing school. I never managed a big fund. But I am not a moron. I have enough going on in the brain department that I can figure out that, if valuations affect long-term returns, there ain’t no way on Earth that a retirement study that fails to take into consideration the valuation level that applies on the day the retirement begins can possibly get the numbers right.
Once I found out that the Buy-and-Holders f’d up on that one, I doubted everything they have done. And, indeed, I have discovered that they f’d up on every issue they have addressed. Always for the same reason. They continue FOR NO INTELLECTUAL REASON WHATSOEVER to pretend that there is no need for a valuation adjustment. The reason why those of us who don’t make gobs of money promoting failed investing strategies correct mistakes when we first learn of them is that failing to do so dooms us to making the same mistakes over and over and over and over again.
THE BUY-AND-HOLDERS MADE A MISTAKE. AND THEY FAILED TO CORRECT IT. THAT’S THE STORY HERE. EVERY PERSON ALIVE TODAY SHOULD BE URGING THEM TO CORRECT THAT MISTAKE BY THE CLOSE OF BUSINESS TODAY SO THAT THEY CAN STOP DESTROYING LIVES. THIS IS NOT OPTIONAL. THIS IS IMPERATIVE!
Is there a vast conspiracy?
Well, those Wall Street Con Men have tons of money and power and they are ruthless in their willingness to destroy the careers of those who try to get the word out to the millions of middle-class investors about the con that has been worked on them. It’s the same story over and over again. Some kind and smart person like Wade Pfau learns the truth and does what he can to get the word out and thereby fix the problem. You Goons threaten to destroy him. Bogle and the other Wall Street Con Men signal their support. The good and kind person flips to the Goon side. He decides that he would rather retain his ability to make a living than to tell the truth and go hungry. Gee, I wonder why so many have flipped! Some of these things are so hard to figure out!
The announcement of your prison sentence will change things, Anonymous.
Wade Pfau doesn’t want to go to prison. Todd Tresidder doesn’t want to go to prison. Bill Bernstein doesn’t want to go to prison. Mike Piper doesn’t want to go to prison. Larry Swedroe doesn’t want to go to prison. And on and on and on and on and on.
They all will flip in one day once your prison sentence is announced. So this is headed to a very good place.
And there will be lots of people demanding your prosecution for financial fraud following the next crash. Why the heck wouldn’t they? People will be losing most of their life savings. They will be able to recover some of the money by bringing legal actions against those who have posted in “defense” of Mel Linduaer and John Greaney and Jack Bogle. Why wouldn’t they want their money back? It’s impossible to imagine any reason. And, once they bring their lawsuits, all of the facts detailed at this site will come out. So then people will demand your prosecution for criminal acts of financial fraud. The logic chain on this one is rock solid.
I am a person who has gotten caught up in circumstances. I didn’t know any of this stuff on the morning of May 13, 2002. I knew that Greaney got the numbers wrong in his retirement study, that’s it. I was obviously doing a good thing to let my discussion-board community know about those errors. The people in the community thanked me for starting the best discussion we ever had at the Motley Fool board. And then Greaney came out with his death threats. Huh? If that’s not proof of a massive cover-up, I’d like to know what would be proof of a massive cover-up.
I didn’t know on May 13, 2002, that there was a massive cover-up going on. I sure do now. What choice do I have other than to expose it? The shift from Buy-and-Hold to Valuation-Informed Indexing is the biggest advance in the history of personal finance. And continuation of the massive cover-up will put us in the Second Great Depression if it is not exposed. Do I have any choice here? Any choice at all?
I obviously have no choice, Anonymous.
You point out all the time that people don’t post here. Thousands have told me that they would LOVE to post here. There are enough people who have told me that they would love to post here to make this the biggest personal finance site on the internet. But people are scared to post here. And for good reason. People know that, if they post honestly, the same things that you Goons did to me and John Walter Russell and Wade Pfau and Ben Solar and ES and Wanderer and John D. Craig and Microlepsis and Earn a Buck and hundreds and hundreds of others will be done to them.
So the biggest advance in the history of personal finance has been delayed. The way this should have played out is that Bogle should have come clean in 1981 and as a society we would have gradually learned more and more each year. We have seen the biggest advances in history over the past 34 years, in particular in the past 13 years. And yet we have reaped no benefits thus far. Because of the death threats and the demands for unjustified board bannings and the tens of thousands of acts of defamation and the threats to get academic researchers fired from their jobs. You Goons have been super effective in destroying lives. What an accomplishment!
You can’t intimidate me, Anonymous. I don’t want to destroy. I have zero interest. I want to do positive work. So I refuse to be intimidated. Tell Bogle that he needs to get me sent to prison if he wants to shut me up. But be sure to tell him that I have contacted people who have agreed to take over the site in the event that I am sent to prison. So Bogle and his Con Men Pals are going to need to send LOTS Of people to prison to keep this covered up following the crash.
And, even if the Con Men could send all those people to prison, they still have the problem that Shiller’s book was a best-seller and can be obtained in lots of libraries. And they still have the problem that there are thousands of articles and posts that tell the truth about stock investing and that are not even housed at this site (some with my name on them, some with other names on them). The con is failing. The con is coming down. The con is in the process of being exposed.
The History Train is moving forward, Anonymous. There is not a darn thing that Bogle or you or anyone else can do about it. We all need to know the truth about what the last 34 years of peer-reviewed research says. We are going to gain access to the information and analysis we need. The only thing unsettled at this point is how long your prison sentence is going to be. Each day that passes, more lives are destroyed. Each new life that you destroy increases the length of the prison sentence you receive following the crash. That’s the deal.
Yes, the “Grrrr” was a microcosm of my entire thinking. I like doing honest work. I like doing positive work. I like doing intelligent work. So I refuse to pretend that the last 34 years of peer-reviewed research doesn’t exist. It exists. And I use it in developing every post and ever podcast and every calculator and every article and every blog entry and every column that I advance. And I always will. I refuse to be intimidated and I refuse to pretend to be a moron who doesn’t know that valuations affect long-term returns.
Wade Pfau elected to play it differently. I told him that he was “insane” to do so. Wade may or not may not join you Goons in prison. It’s not my call. But Wade is insane to behave in a way that even makes that an issue. Had he played it straight, he would have received his Nobel prize by now. I am sympathetic to his concern that his kids might starve if he does the right thing. Still, I think he was insane to risk a prison sentence. Those in this field who do not possess what it takes to stand up to the Wall Street Con Men and their Internet Goon Squads need to find a new way to make a living. That’s my sincere take re this terribly important matter.
We will see how it plays out following the crash. What else can we do at this point?
I will NOT be intimidated. I will NOT post dishonestly. Get me sent to prison or give it up and come clean or just wait for the next crash and hope for the best. Your call. I made my call on the morning of May 13, 2002. I have never given two seconds consideration to joining you Goons in the years since. It ain’t gonna happen.
I hope that helps a bit.
I wish you all the best that this life has to offer a person.