Set forth below is the text of a comment that I recently posted to another blog entry at this site:
People don’t ignore Shiller. They ignore you.
Shiller doesn’t say: “The Buy-and-Holders got the numbers wildly wrong in their retirement studies.” Shiller doesn’t say: “There is zero support in the peer-reviewed research for the claim that price discipline (long-term timing) is 100 percent required for all investors seeking to keep their risk profiles roughly constant through time.” Shiller doesn’t say: “The 34-year cover-up of my revolutionary findings of 1981 is a criminal act of financial fraud and a good number of people will be going to prison for this following the next price crash.” Shiller doesn’t say: “It was the relentless promotion of the idea that long-term timing is not always required that caused the economic crisis that began in 2008.” He predicted in a book published in March 2000 that the continued promotion of Buy-and-Hold strategies would by the end of the first decade of the new century cause a massive economic crisis. But, when that crisis arrived, he kept his mouth shut about what he obviously knew to be the primary cause.
Gee, I wonder why.
There are two things that people who work in the investing advice field want to do. One, they want to make a buck. Two, they want to help their clients or their readers. The problem that we have as a society is that the two goals are in conflict. The market produces trillions of dollars of Pretend Money in bull markets. Every investor on the planet possesses a Get Rich Quick urge (because all humans do). The easy way to get people to like you and to buy your product is to tell them that that Pretend Money is real. That’s Buy-and-Hold. There is a mountain of money to be made promoting the pure Get Rich Quick approach. But the Pretend Money disappears in the bear market that inevitably follows a bull market (irrational exuberance ALWAYS leads to irrational depression — there is not one exception in the historical record). At that point your constant promotion of the pure Get Rich Quick approach has destroyed millions of lives. By promoting Buy-and-Hold, you have failed to achieve your second goal of helping the people who listen to your advice.
I have chosen to pursue the second goal rather than the first. I have demanded recognition of my right to post honestly re the past 34 years of peer-reviewed research because I want my work to be constructive and positive and life-affirming and not to destroy the lives of those who make use of it. The Buy-and-Holders hate me for that with a burning hate. They hate me because they want to be in my shoes and because they have given up hope that they ever will be able to do honest work again. I didn’t do that to them. I want to be working with my Buy-and-HIold friends. But all they can focus on is the shame they will feel when they say the words “I” and “Was” and “Wrong.” They have chosen to destroy even more lives rather than do what they need to do to help the people they want to help. The case for Valuation-Informed Indexing is so strong and the damage done by Buy-and-Hold is so great that they cannot bear to face up to the realities of what the last 34 years of peer-reviewed research says. That’s too sad, you know? That’s not my doing.
Is it Shiller’s doing? Yes and no. All of my work is rooted in Shiller’s “revolutionary” (his word) 1981 finding. So Shiller obviously played a huge role here (as did Bogle, to be sure — there would be no Valuation-Informed Indexing if Bogle had not founded Vanguard and made index funds widely available). But Shiller is willing to go only so far with his truth-telling. He doesn’t like the idea of having death threats directed at him or of having demands for unjustified board bannings directed at him or of having tens of thousands of acts of defamation directed at him or of having threats to get him fired from his job directed at him. So he keeps it zipped about the IMPLICATIONS of his revolutionary research. He tells us what the data says and leaves it to each individual investor to figure out for himself WHAT THAT RESEARCH MEANS. Or NOT figure it out, if that is the investor’s preference.
Most of us prefer NOT to figure it out. We all have that Get Rich Quick urge residing within us. By keeping it zipped re the implications of his research, Shiller gets the best of both worlds. He is widely recognized as a genius (which he obviously is). And yet the Buy-and-Holders are okay with him. He tells the truth but in such a limited and tentative way that the millions of investors who prefer a Get Rich Quick approach still give their money to the Buy-and-Holders and are in practical terms none the wiser about the implications of the last 34 years of peer-reviewed research in this field. That ain’t me, Anonymous. I tell. That’s my job. I have never experienced a moment’s doubt re that one. I have gone beyond Shiller, far beyond Shiller, not because I am smarter than Shiller but because I refuse to keep it zipped re the implications of Shiller’s research. I don’t let the abusive behavior of the Buy-and-Holders slow me down. I work it and work it and work it and work it. And I tell people what I have learned.
Not too many get to hear me nowadays. You Goons have seen to that. I don’t like it. Not one tiny bit. But I don’t let it slow me down. I keep working it. I keep telling what I have learned. That core reality of my being has not changed one iota in 13 years. That core reality of my being will not change one iota in 13 billion years. You can destroy my Google ranking. You can destroy my reputation. You can intimidate my friends into saying nasty things about me. You can frighten my wife into believing that her children’s lives are in danger. You can insult me in thousands upon thousands upon thousands of posts. But that core reality never changes. Given that the Get Rich Quick urge that influences all the humans is strong enough that you have been able to do all those things, perhaps some day you will be able to get me put to death. I don’t think it will happen but then I didn’t think that you would ever be able to get me banned from the Motley Fool board solely for telling the truth about safe withdrawal rates. So perhaps I will be put to death. That’s about as far as abusive posting can go, no? If they give me the chair, they better be sure that the voltage is turning up high enough to get the job done. If they don’t put me down, I will be back posting that weekly column at the Value Walk site. And, if the owner of that site drops the column, I will be back sending e-mails to every other investing site on the internet seeking a new place to house the column. Sooner or later, I will find one and we will be back to where we started. So make sure they turn the voltage up to “11?.
It will turn out the way it turns out, Anonymous. I am who I am. I love the Buy-and-Holders. None of the work that I have done would have been possible without the amazing work done by the Buy-and-Hold Pioneers before I came on the scene. That can never change. And the fact that Shiller published peer-reviewed research in 1981 showing that valuations affect long-term returns can never change either. And the fact that there is something in my life history that causes me to love the idea of being the one to tell millions of middle-class people about the implications of Shiller’s revolutionary findings can never change either. It’s what I am. You’re something different. You’re a Goon. You live to block those millions of middle-class people from learning what they need to know to reduce the risk of stock investing by 70 percent (as shown by the peer-reviewed research that I co-authored with my good friend Wade Pfau). So be it, you know?
I don’t like it. I think that our discussions should be governed by the published rules of our discussion-board and blog communities and by the laws of the United States. But the Buy-and-Holders have a strong desire not to go to prison for the 34-year cover-up and see no way to avoid it if the cover-up comes to an end. So published posting rules and laws making financial fraud a felony mean little to them at this point in the proceedings. I cannot change it. Not by myself. So I accept it for the time-being. I believe that this unfortunate reality will change following the next price crash. So I await that day. You are fine with Shiller because he doesn’t expose your con. You’re not fine with me because I do. It’s not the name “Bennett” that bothers you. It’s what the fellow named “Bennett” does and says that drives you mad. I tell. I don’t tell half the story like Shiller does. I let it all hang out. Journalism blood. Sue me. That’s the story. You know it. I know it. Everyone who reads these words either today or years from today will know it.
If the Second Great Depression comes to bother us all enough for us to work up the courage needed to do something about you Goons, we will all live better lives from that point forward. We can take it that way or we can take it the other way and see our economic system fall when millions of middle-class investors see what has been done to them by the Bogles and Shillers and Lindauers and Greaneys of the world. It’s not for me to say which way it goes. I obviously have hopes. And I obviously have beliefs. But it is ultimately not my call. This is a call that will be made by the people of the United States following the next price crash. The worst that can happen to me is that I get the death penalty. That’s the absolute worst that you Goons can dish out. And I don’t have to think two seconds as to whether I prefer the death penalty to posting dishonestly on the numbers that my friends use to plan their retirements. I have never in my life felt more settled re any question that has been put before me as I feel re that one.
If you don’t believe me, ask my wife. She’s the world expert on the particular topic of whether Rob Bennett has any give on the question of his willingness to post dishonestly re the numbers that his friends use to plan their retirements. She can tell you lots of tales that will make your Goon hearts flutter. I love my wife. I love my kids. I love Shiller. I love Bogle. I love you Goons. I love my fellow community members. I love my country. I love the wonderful game. I love what I think it is going to do for us all when we get to the other side of The Big Black Mountain. I don’t love the idea of directing my human energies to the task of posting dishonestly re the numbers that my friends use to plan their retirements. I sweated blood to get the numbers right in my plan. I worked that one every night and every weekend for nine years. I worked it while I was waiting for the bus to take me to work and I worked that one while waiting for the bus to take me home again. I worked that one during lunch hour. I worked that one before drifting off to sleep at night and I worked that one when I laid in bed in the morning trying to work up the courage to pull the blankets back and step into the cold of the morning. I never stopped thinking about it for those nine years and I never once in the past 13 years have given two seconds of consideration to the idea of betraying whatever Higher Power elected to give me the insight I needed to see that the Old School safe-withdrawal-rate studies ain’t the way.
I am what I am, Anonymous. You are what you are. I accept that. There is nothing personal in this from my end. I am capable of liking you just fine while remaining 100 percent determined never to agree to post dishonestly re the numbers my friends use to plan their retirements. I hope you understand that there is nothing that you can take away from me that will cause me to betray the things that makes me what I am. It’s BECAUSE I love Bogle that I believe that deep in his heart he wants to help people and that thus deep in his heart he wants someone like me to insist that he come clean re the last 34 years of peer-reviewed research. My love for Jack Bogle (and all the others) is a deep love. It is non-negotiable. Deal with it. Or don’t. Either way you will always remain my friend.