Set forth below is the text of a comment that I recently posted to another blog entry at this site:
“But the buyers and sellers do not have access to commentary on the last 34 years of peer-reviewed research. They do not have access to the information they need to act in their self-interest.”
Are you suggesting the Wall Street institutions that set stock prices don’t have access to the same information as you?
Yes.
Wade Pfau hold a Ph.D. in Economics from Princeton. I have never taken a single course in investing. Wade should know 50 times what I know about investing.
Go take a look at the hundreds of posts at this site that relate to Wade and the things he learned about stock investing during the 16 months that we worked together. He was learning amazing things on a daily basis. He was stunned and amazed by this. He remarked on it over and over again.
The same thing happened with John Walter Russell. John was obviously a very smart person. And he studied stock investing. But his most fundamental ideas about how stock investing works changed when he met me. Then he spent eight years of his life researching the Valuation-Informed Indexing concept. The more he researched, the more be believed and the more he learned. His knowledge grew deeper and deeper and deeper.
The same thing happened yet again with Larry Evans (if I am recalling the name correctly). When Larry discovered my site, he was slightly hostile. He believed in the Buy-and-Hold garbage and he couldn’t accept that I had really proved that it was all wrong. So he challenged me. He said that he would spend three weeks reading every article at the site and then would write an article giving his assessment of my ideas. He asked whether I would be willing to agree in advance to post his article even though I would not know at that time what he would say. I said that would be fine. He called me after the three weeks and said that every claim that I had ever made checked out. He said that he was laying awake at night thinking how huge an advance VII represents. He was stunned and amazed and excited.
Buy-and-Hold was a mistake, Anonymous. It is the most dangerous investing strategy ever concocted by the human mind. There is no rational discussion that can be held re this matter. Because 100 percent of the evidence is on one side and 0 percent is on the other. It is pretty darn hard to hold a rational argument when all the evidence is on one side. There is no controversy. There is nothing to talk about. Fama never even looked at long-term timing (price discipline). So it is of course impossible that he ever came up with the smallest bit of evidence that there might be some magical, mystical alternate universe where long-term timing (price discipline) might not be 100 percent required.
The Wall Street institutions have access to the same information that I have access to in a practical sense. Obviously.
But they don’t have access to that information in a real sense.
Look at what happened with Wade Pfau. He LOVES, LOVES, LOVES Valuation-Informed Indexing. He thinks it is the answer. He thinks it is the future. He had visions of winning the Nobel Prize with the research he was planning to do showing why VII is better than Buy-and-Hold in every possible way.
Then his career was threatened by some very powerful people. Wade saw all those years he spent in school going down the drain. He saw Jack Bogle and his Wall Street Con Men pals taking away the bread from his family table. He saw the lives of his wife and children being destroyed because he wanted to do honest work that would make the Buy-and-Holders “look bad.” So he gave in to the threats.
Does Wade have access to the information he needs to understand how stock investing works?
In one sense, he does. But in reality, he does not.
Wade has participated in the biggest act of financial fraud in the history of the United States. How do you think that makes him feel? It makes him feel horrible. Wade didn’t get into this field to destroy millions of middle-class lives. He got into this field to help people. It hurts him that he has destroyed millions of lives. So he lies to himself about what he has done. He pretends that financial fraud is no big deal. All the Big Shots in this field are engaging in financial fraud today. So what does it matter if one more researcher flips to the dark side?
Wade has access to the materials he needs to do helpful research. But he cannot bear to look at it. If he looks at it, it reminds him of how he has failed himself and his family and his profession and his country. So he tells the lies he feels he needs to tell to turn a buck in this 100 percent corrupt field. And he tries hard to keep himself as dumb as someone with his intelligence can be. Because it’s only those who keep themselves ignorant of the implications of the past 34 years of peer-reviewed research who are able to earn a buck in this field so long as the long-discredited Buy-and-Hold “idea” remains dominant.
It’s the same with Jack Bogle.
It’s the same with Todd Tresidder.
It’s the same with Bill Bernstein.
It’s the same with Mike Piper.
It’s the same with the owners of the Motley Fool site.
It’s the same with Carl Richards.
It’s the same with the owners of the Early Retirement Forum.
It’s the same with Bill Shultheis.
It’s the same with the owners of Morningstar.
It’s the same with Larry Swedroe.
And on and on and on and on and on.
All of those people would like to feel free to tell the truth about the last 34 years of peer-reviewed research. And all of these people know what the Buy-and-Hold Mafia would do to them if they dared to “cross” them by speaking honestly re the last 34 years of peer-reviewed research. It is only the advocates of a single investing strategy who respond to challenges to their claims with death threats and with threats of career destruction. It is only Buy-and-Holders who do that. And we have seen the Buy-and-Holders do it over and over and over and over and over again. I wonder why.
There are people who work on Wall Street who would like to understand stock investing better than they do today. But they know the price they would have to pay. And they like the money that can be made in this field by being dishonest more than they like the good feeling that comes from telling the truth about the last 34 years of peer-reviewed research.
I like the good feeling that comes from telling the truth about the last 34 years of peer-reviewed research more than I like making a smelly and dirty buck. That’s my secret. Sue me.
I expect to make a lot of bucks too. I expect to make 500 million of the suckers. But I intend to make them honestly. And that one is non-negoitable.
I hope that helps a bit.
I wish you the best of luck in all your future life endeavors, my dishonest and abusive-posting friend.
Rob
Anonymous says
“47,000 members, an average of 70,000 daily visitors and up to 4 million hits a day, making it one of the most active online investing communities…the site now hums with tips on everything from retirement planning to how to pay for college…the site now hums with tips on everything from retirement planning to how to pay for college…more than 60 Boglehead chapters have sprung up, including groups in Taiwan and the United Arab Emirates. The groups typically meet every few months, discussing everything from Social Security benefits to market trends. Once a year, there’s a national gathering at which a lucky few who sign up early and pass a security screening converge for a few days of presentations and face time with the 86-year-old Bogle himself.”
What a shame that a benevolent, revered figure in his 90’s would actually require his potential audience be screened for nutjobs wanting to ”disrupt’ with their own brand of cockamamie half-baked half-witted un-requested undesirable screeching. Congratulations, Rob — that is the sum total of your contribution to society and the dialog. Happy?
Rob says
The shame is that the “security screening” involves checking whether the person seeking to attend the gathering has ever posted honestly on the errors in the Old School safe-withdrawal-rate studies, errors that have put millions of middle-class Americans at grave risk of suffering failed retirements in days to come.
If others who call themselves “friends” of Jack Bogle had pointed out his errors earlier and had insisted that he respond to the discovery of those errors in a responsible way, my good friend Jack would not be in the circumstances in which he finds himself in today. We are all human. We all make mistakes. We all should be able to count on our friends to point out our mistakes to us and to demand in love that we correct them before we destroy more lives with them and thereby bring more embarrassment and financial liabilities and in some cases even prison sentences on ourselves.
I will always praise Jack Bogle to the skies for his many genuine achievements. And I will always insist that Jack follow the ethical standards that apply in all other fields of human endeavor when giving investing advice.
I hope that works for you, Anonymous. I am not able to play it any other way. I would not be able to sleep at night if I agreed to betray my good friend Jack as a result of your insanely abusive intimidation tactics. The man has taught me much. I owe him my support and my respect and my honesty.
Hang in there, man. It gets better. a LOT better.
Rob
Anonymous says
When reading your posts about Jack, it seems that you want the attention drawn towards yourself and that you feel that you should be considered one of the greatest investment minds/ in the same league as Jack, Bill Bernstein, etc. basically, self aggrandizement.
Rob says
This isn’t about intellect. It’s about ethics.
Jack Bogle is trapped. So is Bernstein. So are lots and lots of others.
Buy-and-Hold was once a real thing. Smart and good people thought that it was the answer. Then we learned in 1981 that it isn’t the answer — you need to add a valuations adjustment to all the numbers.
If Jack had it to do over, he would have come forward with an “I Was Wrong” speech within several weeks of when Shiller published his “revolutionary” (his word) research findings. He doesn’t feel comfortable doing that today. He feels that it will make him look bad because of the 34-year cover-up which caused the economic crisis and has put millions of people in grave danger of suffering failed retirements in days to come.
He has to come clean whether he feels comfortable doing so or not. This is too big. We need to get the cover-up behind us and move on to better things. But he feels trapped. And lots of others do too. I didn’t trap these people. I like these people. I admire them. I am trying to help them out. But I’ll be darned if I am going to climb into the same trap that is in the process of destroying their reputations. No thanks, you know? Please try to find somebody else. I am not your guy.
Am I an expert? That one seems to cause you Goons a lot of pain.
It’s my opinion that there is no such thing as an investing expert today. We are too early in the process of learning how investing works for anyone to be a true expert. If I were going to become a true expert, I would need to obtain feedback from lots of people with more schooling and experience in this field than I possess.
I want to hear that feedback because I want to learn more. I especially need to know if I have gotten anything wrong or if there are any weaknesses in of the hundreds of claims that I have put forward over the past 13 years. So I certainly intend to participate in the huge learning experience that we all are going to enjoy once the Ban on Honest Posting re the last 34 years of peer-reviewed research is lifted at every discussion board and blog on the internet.
But I cannot say that I crave being known as an investing expert. I am a journalist. That’s all that I am and all that I have ever intended to be. To me, being a good journalist is BETTER than being an investing expert. So I don’t even think about this stuff in the way you do. I am out to tell this amazing, life-affirming, people-liberating story. I LOVE the story. It’s the most important political/economic/psychological story of my lifetime. I am humbled to have been given the job of telling this hugely important story to millions of middle-class investors. That’s where I am coming from.
Now —
Have I become an expert despite my lack of interest in pursuing that status?
I have. In relative terms.
I am 13 years ahead of Jack Bogle, who is viewed as an expert. I am 13 years ahead of Bernstein who is viewed as an expert. It could even be said that I am 13 years ahead of Shiller. Shiller is the founder of Valuation-Informed Indexing. He is the guy who came up with the theory that investor emotions affect prices and that published the peer-reviewed research showing this theory to be valid. But Shiller does not talk about the how-to aspects of stock investing in any depth at all. I do that. That’s my site. I tell people WHAT TO DO given Shiller’s revolutionary finding. That’s a big deal.
In that respect, I am an expert. Once the ban is lifted, all the others will pass me. That’s a good thing. I WANT them all to pass me. This opportunity should never have been available to someone like me. I never went to investing school. I never managed a big fund. What happened here should not have been possible.
But it happened. It happened because this huge mistake was made and then covered up. So all the people who have the credentials to be experts are stuck saying dumb stuff that would be right if Buy-and-Hold were still a legitimate strategy but that is dumb because Buy-and-Hold was discredited 34 years ago by the peer-reviewed research.
Is that my fault? Did I tell Bogle to cover up his mistake for 34 years? Did I tell Shiller to hold back from discussing the IMPLICATIONS of his revolutionary finding in his book? I did not. The cover-up had been going on for 21 years when I came on the scene in May 2002. So none of the bad stuff here is my doing. I have been trying to bring the cover-up to an end going back to the first day. All that I have ever done is to try to help Bogle and all of my other Buy-and-Hold friends out of a terrible jam in which they have trapped themselves.
Bogle has more I.Q. points than me. So does Bernstein. So does Shiller.
But these people cannot do good work again until they come clean and acknowledge the mistake they made that has been holding them back all this time. I want to see it happen. But I can’t come clean for them, can I? I can offer them good advice. I cannot force them to take that advice. They are independent actors.
They are hoping that things will somehow work out and that they will never have to come clean.
I think they are living in a fantasy world. If Shiller is right (and all available evidence shows that he is), we are going to see another crash and the next one will be worse than the one we saw in 2008. The pressure to come clean will then be intense. These people are good people. They don’t want to see their country experience a Second Great Depression. So they will come clean.
At least that’s what I believe will happen.
I am ahead of all these good and smart people because I flat-out refused to go along with this stupid game. I want to work with them. I want to learn from them and I want them to learn from me and I want everybody working together and learning together. But that’s easy for me to say, isn’t it? I won’t be going to prison after everyone feels free to talk honestly about the last 34 years of peer-reviewed research. I won’t be getting sued when millions of people learn how I have lied to them for so many years.
It can’t get better by extending the cover-up. It can only get worse. So we all need to work together to put the ugly stuff behind us and to bring on the greatest period of economic growth in our nation’s history.
Maybe the way to say it is that the peer-reviewed research is the true expert here. I talk honestly about the peer-reviewed research and so the things that I say make me sound like I am a big expert. The circumstances are odd. But I did not do anything to bring about those circumstances (other than insist on my right to post honestly re the peer-reviewed research).
I have said things that no one else has said because I insisted on writing about what the peer-reviewed research says in the face of a mountain of abuse from you Goons. Others were not able to do that because they were too worried about turning a quick buck or about not seeing their reputations destroyed by you Goons. Too bad for them, you know? I guess you could say that I am an expert by default.
I didn’t set out to become an investing expert. But in the land of the blind a man with one eye is king. I am far ahead of all those who hold back from talking about the last 34 years of peer-reviewed research because it would upset the Buy-and-Holders to know what the research says. Sue me, you know? We need people talking about the research. I certainly don’t apologize for doing it. I am very proud of the work that I have done. I think it is wonderful. I only wish that all of my Buy-and-Hold friends would join in on the fun.
All the good stuff starts when my good friend Jack Bogle works up the courage to say the words “I” and “Was” and “Wrong.” That frees all of us to at least start developing some true expertise in this field. It’s not possible to be an expert if you are still telling people that there is no need to engage in long-term timing (which is how price discipline is exercised by stock investors). That’s like having someone who still believes that the earth is flat proclaiming himself an expert on physics. Huh?
We’ve known for 34 years now that the market is not efficient, that valuations affect long-term returns. Anyone who says otherwise is either uninformed or dishonest. That’s why the Buy-and-Holders threaten physical violence or career destruction on those who post honestly re the peer-reviewed research in this field. They have no case. The evidence is 100 percent in favor of Valuation-Informed Indexing and 0 percent in favor of Buy-and-Hold. That’s the reality that is driving my Buy-and-Hold friends nuts.
I hope that helps a bit, Anonymous. I don’t think of myself as an expert. But I sure understand that I am 13 years ahead of a lot of people who do proclaim themselves to be experts. Heck, the Buy-and-Holders haven’t even issued accurate safe-withdrawal-rate studies yet. Huh? What kind of expert doesn’t tell people what they need to know to plan their retirements effectively? I published The Retirement Risk Evaluator about eight freakin’ years ago! I think it would be fair to say that I am much more of an expert than anyone who hasn’t yet even acknowledged the errors in those retirement studies and corrected them.
Isn’t an expert supposed to try to get the numbers right? Isn’t that the general idea?
I mean, come on.
Rob
Anonymous says
”
Have I become an expert despite my lack of interest in pursuing that status?
I have. In relative terms.
I am 13 years ahead of Jack Bogle, who is viewed as an expert. I am 13 years ahead of Bernstein who is viewed as an expert. It could even be said that I am 13 years ahead of Shiller. ”
So you are the “leading” expert if we are to compare you to those 3 other individuals. That means you should be the one getting the majority of attention from the investment community at this time.
Rob says
Someone who takes the last 34 years of peer-reviewed research into consideration is obviously far more expert than anyone who ignores that research. Nothing could be more obvious.
The work that I have done exploring the implications of Shiller’s “revolutionary” (his word) findings should of course be getting tons and tons of attention from the investment community. We need a national debate on this stuff. This is the biggest advance ever achieved in the history of personal finance. There’s nothing else even close.
It won’t be just me getting attention once the ban is lifted. Valuation-Informed Indexing couldn’t exist without the many powerful insights developed by Bogle (I just incorporate all his good stuff into the model while leaving out the one thing he got wrong). So Bogle will be 10 times bigger than he has ever been before once he comes clean. He is not helping himself by covering up his mistake. He has made all the stuff he got right pointless by refusing to correct his stand on price discipline (long-term timing), which is 80 percent of the game. But all of his powerful and genuine insights remain powerful and genuine. His good work will be getting more attention than ever once he comes clean.
I will get tons of attention in the early days because I have 13 years of material that people have not been able to hear about because of the Campaign of Terror led by you Goons. But there will be thousands of people offering honest and accurate and research-based investment advice once the ban is lifted. So I don’t expect to be alone in the spotlight for too long. I will have lots of my Buy-and-Hold friends working alongside of me. And that’s how I want it to be. That’s how I have always wanted it to be.
I hope that helps a bit, Anonymous.
Rob