Set fort below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Rob,
Doesn’t it come down to perception? You don’t feel you were bitter, but they do. As they say, you must know your audience. Your intentions don’t matter as it is opinions that count.
There’s a good bit of truth in what you are saying here, Anonymous.
What does this say about what happens following the next price crash? When millions of people lose most of their retirement savings, will that change perceptions of Buy-and-Hold?
I say “yes.”
But we are going to have to wait until it plays out to know for sure.
Perceptions of Bernie Madoff sure changed after his con was exposed. Jack Bogle is Bernie Madoff times 500, in my assessment. I love the guy, as you know. I am his biggest fan. But still….
Rob
Anonymous says
Wait for how long? When is it “long enough”?
Rob says
That’s not for me to say, Anonymous. That’s for the people of the United States to decide. When we collectively work up the courage to stand up to you Goons, the bad stuff comes to an end and the good stuff begins.
If it had been up to me, the bad stuff would have ended on the morning of May 13, 2002. I thought it was a mistake to delay then and I think it is a mistake to delay now. But it’s not my call.
My best wishes.
Rob
Anonymous says
How long should we wait for the crash, Rob?
Rob says
You can wait as long as you want to wait, Anonymous.
Or don’t wait at all, if you prefer.
It’s up to you. It always has been. It always will be.
I believe that we will see another price crash that will take the P/E10 value below 8. I don’t believe that because I have a crystal ball that shows me that when I look into it. I believe that because there is now 35 years of peer-reviewed research showing that stock price changes are caused by shifts in investor emotion and, every time in history in which we have seen the positive shifts that cause a secular bull market transformed into the negative shifts that cause a secular bear market, we have ended up at a P/E10 level of 8 or lower.
I am going to wait until it happens. Or until I come across some reasoned argument for why it may not happen. One of those two.
When people ask me what I believe, I am going to tell them. When they ask why I believe what I believe, I am going to tell them that. When they ask me what I think follows from the 35 years of peer-reviewed research that forms the foundation for this new way of thinking about how stock investing works, I am going to offer whatever thoughts along those lines that I am able to muster. I am going to continue to encourage challenges to those thoughts because I think we need to have lots of smart people offering their thoughts re these matters and because I think that I could make mistakes and I worry that if people put too much confidence in what I say, they could get hurt by doing that and I don’t want to see that happen. Also, I learn new things when people criticize my ideas in reasonable ways and I like to learn new things.
I am just going to continue exploring this path for so long as it seems to be generating a bigger payoff than anything else that I could be doing with my time. I believe strongly that the last 35 years of peer-reviewed research in this field is the most important 35 years of peer-reviewed research in the history of investing analysis. I believe that Buy-and-Hold is the past and that Valuation-Informed Indexing is the future I naturally intend to devote my energies to exploring the model for understanding how stock investing works of the future rather than the model of the past. It wouldn’t make even a tiny bit of sense for me to play it any other way. For reasons that are perfectly obvious to any human beings capable of thinking clearly about these matters (but of course not necessarily for those suffering the pains of cognitive dissonance because they invested too much of their emotions in a model that advanced our understanding of how stock investing works in some very big ways but that failed in its treatment of valuations and that has not yet been corrected by its lead promoters).
Does that help?
I am going to continue to give credit to my Buy-and-Hold friends for their many amazing contributions and I am going to continue to try to explain how they got on the wrong track and why as a society we need to make special efforts to be forgiving of their mistakes rather than judgmental. I see it as my job to pull us all together and to focus on the positive side of this story (which is huge indeed). That’s my most important job of all, in my assessment. So I am going to put a particular emphasis on that aspect of the question. My aim over the next year or two is to shift my energies away from investing sites to political sites and to social media in general in an effort to explain to those outside of the industry how this industry got so fucked up at the very moment in history when it came within inches of achieving the amazing promise of the early days of the Buy-and-Hold Era.
I am going to continue to make the point that we need to pull together and demand prison sentences for those who have posted in “defense” of Mel Lindauer and John Greaney and Jack Bogle because I view it as cowardly for us all not to do what we can to help shorten the prison sentences of those friends of ours who have come to find themselves walking down a very dark path indeed. We are all going to feel better about ourselves if, when those prison sentences are announced, we are able to say that we did everything we could when there was still time to take positive steps. I would want my friends to help me out if the tables were turned. So I hope to continue to be able to work up the courage to do for my Goon friends what I would want you to do for me were I sitting on the other side of the table.
Does that cover it?
Wait as long as you like, Anonymous. Please don’t feel any push from my side of the table to wait one second less than you like or one second more than you like. God created lots of different people and each of those people needs to put forward his or her particular take for the right result to be achieved through the process through which ideas are advanced, challenged and replaced in the Marketplace of Ideas. We all need you to decide how long you should wait and we all should be encouraging you to wait precisely that long.
I will wait until the crash arrives or until a better model than the one supported by the last 35 years of peer-reviewed research (based on 145 years of stock market history) comes along. I am a peer-reviewed research guy. I learned that one from my good friend Jack Bogle. Nice fellow. Pretty darn smart guy too. You should check him out.
That’s my sincere take re these terribly important matters, in any event.
Love is the answer.
I am sure.
Rob
Anonymous says
“My aim over the next year or two is to shift my energies away from investing sites to political sites and to social media in general”
That sounds like just killing time. No one ever enriched their lives (remember arichlife?) by hanging out in such places.
Rob says
I guess we will have to wait and see how it all plays out, Anonymous.
Financial fraud is not for me. Prison is not for me.
I naturally wish you the best of luck with it all the same.
Rob
Anonymous says
The non sequitur answer you give when you have no answer.
Try to stay on point, Rob. What gain is to be had by spending your time on political sites, Twitter, etc?
Rob says
The investing advice field has become completely corrupt in the Buy-and-Hold Era, Anonymous. Lots of people know about Shiller’s research findings. Lots of people know that he was awarded the Nobel prize for this “revolutionary” (his word) advance. And lots of people in this field want to do honest work and to thereby help other people (they are just people after all — people in every field of human endeavor possess a natural desire to do honest work and to thereby help other people).
But they feel that their careers will be destroyed if they dare to “cross” the Buy-and-Holders by reporting honestly on the implications of the last 35 years of peer-reviewed research. Wade Pfau is the obvious and most clearly demonstrated example of the phenomenon. But there are of course many, many others. Rob Arnott told me about academic researchers he knows who tried to do honest research and who were taken aside and warned that their careers would be destroyed if they did so. Jack Bogle himself includes lots of honest stuff in his speeches all the time and then undermines his own message by suggesting in the last paragraph that Buy-and-Hold is just fine.
The Buy-and-Hold Crisis does not affect only people who work in the investing field. It affects all of us. It is a political issue. We have millions of people unemployed today because of the crisis. We have millions on the way to suffering failed retirements. We have people on both the left and the right losing confidence in our political process. This is serious stuff. We are going to have to find some way to get honest investing advice out to people. We are going to need to get prison sentences announced for you Goons and then to reward those doing honest and accurate work in this field with various economic benefits.
People respond to incentives. We need to provide positive incentives to people of integrity who want to work in this field and call the Buy-and-Holders out on their b.s. We can’t find people in the investing field to do it because people trying to make a living in this field are too compromised. Wade has two small children to support. That’s why he felt that he could not stand up to Bogle and his various Internet Goon Squads. We are going to need to create communities of people outside the investing realm who are willing to help out those of us trying to expose the corruption and to open up the possibility of people of integrity obtaining work in the investing field.
I haven’t finalized my plans in this area. I am still outlining an agenda. My guess is that I will get to work on this new phase early next year. I have been thinking more and more about it over the past few months.
I am debating not even going to FinCon16 in September because I may want to devote my time and energies in this new direction. I have not made a decision but I expect to do so within the next few weeks. Regardless of which way I go with the FinCon decision, I more and more expect to be moving toward directing more of my efforts at political sites and at social media sites.
Once we generate pressure from outside the investing realm for honest work to be permitted in the investing realm, I believe that we will see things begin to happen quickly in the investing field. There’s is already a great deal of pent-up desire both to provide honest investing advice and to hear honest investing advice. We have been seeing that going back to May of 2002. We need help from outside the investing field to help deal with the pervasive corruption within the field. I have tentatively concluded that that’s where I should be placing most of my efforts in days to come.
Those are my scattered and tentative thoughts re this matter at this time, in any event.
I hope that helps a bit.
Hang in there, my old friend.
Rob
Anonymous says
You really think you can make yourself heard over the constant pie fights at RedState or DailyKos, and convince those people to storm BogleHeads on your behalf?
That, sir, is illogical. (Quote from Star Trek “The Doomsday Machine”)
Rob says
There are serious problems with the idea, Anonymous. I see that.
An even bigger problem in my mind is that most people don’t consider themselves experts re investing. They defer to the people they consider experts. And the experts support Buy-and-Hold. The best place I ever posted was Bogleheads Forum because people there know the issues well. I won’t have that sort of knowledge base at political sites or at social media sites. That’s a huge negative.
This is why I haven’t done this before (except to a small degree, and the idea has proven unsuccessful to the small extent to which I have tried it). Still, I am leaning today toward thinking that this is the next step.
I am mulling it over, thinking about how I would proceed if I were to proceed. I am putting together sketchy sorts of thoughts. I am expecting to refine things a bit more by the close of the year and get started with the new approach in early 2017.
It might not happen. But I would put the odds at about two in three that this will be my next project.
We will see.
Rob