I’ve posted Entry #308 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called It’s Worth Examining How Numerous Allocation Options Are Likely to Perform Over Numerous Time-Periods.
Juicy Excerpt: I started writing about safe withdrawal rates in May 2002. At that time, it was common practice among Buy-and-Holders to assume that smart retirees would employ a portfolio allocation of 80 percent or so. The conventional wisdom of the day was that stocks had been proven to be the far superior investment choice and so retirees would be leaving lots of money on the table by going with stock allocations too much less than that.
To be fair, not all Buy-and-Holders took this position. But the voices of the ones who did often drowned out the voices of those who did not. Those of us who held reservations about the idea of going with high stock allocations at times of insanely dangerous valuation levels often censored ourselves. We shared our thinking in limited, tentative ways. But we knew that stating our views in too clear a manner would make us unpopular and so we walked on eggshells when making this painfully basic and important and accurate and responsible point.
It’s a different story today. Stocks have been performing poorly for nearly 17 years now. Today, the Buy-and-Holders know that saying that stocks are always the far superior asset class does not go over nearly as well as it did in 2002. So they state things differently. They suggest that perhaps 50 percent stocks is a better allocation fort most retirees or even for most investors. Occasionally you will see a Buy-and-Holder advocate a stock allocation even lower than that, something I can never recall seeing in the days of wildly inflated prices.
Anonymous says
When you say “we”, who are you specifically speaking about?
Rob says
The American people.
It is the American people who (through the work of their elected representatives) enacted laws against financial fraud. We are afraid of you Goons. We are not accustomed to seeing threats of physical violence directed at us. We are not accustomed to seeing threats of career destruction directed at us. We want to do the right thing. We want to post honestly. We want to stand up for our friends who post honestly and who are attacked for doing so. But we are afraid.
We wil overcome our fear by demanding that criminal prosecutions be brought against those who have posted in “defense” of Mel Linduaer and John Greaney and Jack Bogle or who have permitted those posting in “defense” of this unholy trio to participate in discussions held at their web sites. The day on which your prison sentence is announced is the day on which we put all the ugly stuff behind us and move on to exploration of the exciting implications of the last 35 years of peer-reviewed research in this field. That’s the magical place where we all (including you Goons, to be sure) deep in our hearts want to be.
You like to suggest that, because prison sentences have not been announced for 14 years now, that the American people support your Campaign of Terror against our discussion board and blog communities, Anonymous. I don’t buy it. We expressed our sincere views with the adoption of the laws against financial fraud that remain on the books to this day. Those laws are who we truly are as a people. We will enforce them.
We first need to get over our fear of what will be done to us when we call for enforcement of the law. We will get over our fears in the days following the next price crash, when we will see in concrete terms what the consequences are of spending hundreds of millions of dollars promoting a pure Get Rich Quick approach so relentlessly and so irresponsibly for so long a time. When we see what is really at stake, we will overcome our fears and take action. And thereby open ourselves to all the benefits of finally putting in place the last piece of the stock investing puzzle.
That’s my sincere take re these terribly important matters, in any event.
I hope that helps a bit, Goon friend.
Rob
Anonymous says
So, all the American people gave you this feedback and named you the spokesperson.
Rob says
Thousands of people have over the past 14 years expressed a desire that honest posting be permitted on safe withdrawal rates and scores of other critically important investment-related topics.
The people who participate in discussions on investing boards are roughly representative of the much larger community of investors. So the true number of Americans who support the idea of permitting honest posting is in the millions.
Yes, I speak for those people. They never held a vote and named me spokesperson. But no one else has stepped forward and taken on the job. What do you propose that I do, keep my mouth shut about the corruption that I have uncovered?
If Shiller has spoken up about the corruption when he discovered it back in 1981, I never would have been put through what I have been put through over the past 14 years. If Bogle had spoken up when he learned of his mistake, you wouldn’t be headed to a prison cell in coming days.
People need to speak up when they see corruption destroying so many lives. I was placed in circumstances in which I had no other option but to speak up. So I have done so.
When I am awarded a $500 million settlement payment, I think it will be fair to characterize that payment as a way in which our society has collectively expressed its will that I be the spokesperson and that I be properly rewarded for taking on the job. That’s how it is done in our society.
If I and everyone else waited around for a vote to be taken, the corruption would never be brought to an end. And then there would be even more lives destroyed and even more Goons going to prison. What purpose is served by us taking that path?
I wish there had been a vote and I wish that I had lost and that some other poor soul was given this fun job. It didn’t work out that way. As I have stated on numerous occasions, I did what I had to do, no more and no less. I offer no apologies whatsoever.
And I stand in no one’s way if someone wants to take over the job today. But until someone else steps forward, I intend to continue to work it as hard as I possibly can and to take the steps needed to help every single person involved (including you Goons) get to the best possible place available to him or her given the circumstances that apply at this point in the proceedings.
I hope that helps a bit.
Rob
Anonymous says
“What do you propose that I do, keep my mouth shut about the corruption that I have uncovered?”
If you have proof of illegality, you tell the proper authorities. If they fail to act, you move on with your life. It’s the “moving on” part that you can’t seem to grasp.
What you’re doing is revving and rocking the family car to get out of a snowbank, long after it’s obvious you are stuck. You could listen to your wife and call a tow truck. Instead, you stubbornly insist on ruining the tires and burning out the transmission.
Rob says
I’ve notified the proper authorities and they have not acted, Anonymous.
You say that I should “move in with my life.” In the event that the last 35 years of peer-reviewed research is legitimate, the failure of the authorities to act is going to put us in the Second Great Depression. It would be fair to say that there are a lot of good and smart people who have managed to rationalize “moving on,” as you put it. I cannot. I love my country. I care about my fellow community members. I cannot go there.
I can wish you all the best if that helps at all. I can wish the best to all of those who know that Buy-and-Hold is a big pile of smelly garbage but who have rationalized not speaking up. That’s as far I can go. I like those people, I respect those people, I sympathize with the plight in which those people find themselves. I like you Goons. So all of that is on the right side of the line, so far as I am concerned.
But, no, I cannot “move on” and thereby fail to speak up about the biggest act of financial fraud in the history of the United States. Not when it is in the process of bringing on the Second Great Depression. My mother lived through the First Great Depression and told me stories about what that meant for her. I don’t want my boys to live through something like that. I dare say that you wouldn’t want your children or your neighbors’ children to live through something like that if you were capable of overcoming your cognitive dissonance and seeing that it was the Buy-and-Hold “idea” that caused the First Great Depression and that is in the process of bringing on the Second Great Depression. I believe that there will come a time when you will come to see that we have never been as far apart re these matters as you have long believed or at least pretended to believe we were.
If you see a child trapped in a burning building and you are afraid that you might burn to death yourself if you try to help, do you “move on”? I would call the proper authorities, as I did in this case. What if the proper authorities do not arrive on the scene until you realize that you are the only one in a position to save the life of the child? What do you do then?
I am not telling you what to do, Anonymous. I am not even saying that I would certainly run into a burning building to save the life of a child if I was the only one who could help him or her. I like to think that I would. But I am not sure that it is a good idea to make flat statements about such a thing until one has been put to the test.
I think that there are times when one has to put one’s self at risk. I can say that much. There are times when a person has to run into a burning building to save a child. There are times when a person has to speak up for civil rights even though he knows that it may get him killed. There are times when a person has to run in front of enemy fire to save the lives of the rest of the guys in one’s unit. There are times when a person has to block home plate knowing that it may cause a concussion because the World Series is on the line and it is up to you to take a stand no matter what the consequences.
You have to live your life and I have to live mine. I love my wife and I am going to help her out in any way possible. God didn’t make me to protect home plate or to speak out in favor if civil rights at a time when it was hard to do that. God made me to be the one who worked up the courage to challenge John Greaney’s safe withdrawal rate claims at the old Motley Fool board and then to follow the story of where that led us all wherever the story went. That’s my job.
Dylan wrote:
Life is sad.
Life is a bust.
All you can do
Is to do what you must.
You do what you must do
And you do it well.
That’s me. That’s why I do what I do. I don’t have a choice. I love my country. I care for my fellow community members. I do what I must do given what follows from that.
I always will. It would be cruel of me to suggest that there is anything more than a zero chance that that could ever change.
If my wife ends up destitute, that would make me very sad. But not as sad as it would make me if she learned that the man she married was capable of selling out his country to turn a quick, smelly buck telling more Buy-and-Hold Lies. God has a plan for my wife, you know? He gave her a good husband (as he gave me a good wife). He has a plan and he will take care of her in some way that perhaps neither you nor I can imagine today. Perhaps my boy will take over the site when he finishes college and he will make millions and he will take care of his mom and his decrepit old dad just fine.
We’ll see. Time will tell the tale.
My job is to do what I must do and to do it well. That’s my plan. That’s my intent. That’s my strategy. That’s what I get excited about each morning when I hop out of bed and fire up the old MacBook Pro. That’s what it is all about for me. You do your Goon stuff, I do that. We are different in many ways but alike in that we both do what we rightly or wrongly feel a need to do. Fair enough, old friend?
I think things will work out. I think that it will all turn out 50 times better than any of us can imagine today. I think that Jack Bogle and I will be working together and will be famous friends following the next price crash. The stuff that people learn then will take his reputation to places it has never been taken before and he will look back and wonder why he ever got involved with the sorts of individuals who are capable of putting up posts in “defense” of Mel Lindauer and John Greaney. We will all meet to have a nice cold one and to laugh about the craziness of the first 14 years of The Great Debate. Anonymous is invited. Greaney is invited. Lindauer is invited. It will be a happening.
Let’s wait and see what happens following the next crash before making any rash decisions to “move on” and thereby leave you Goons to even LONGER prison sentences, okay? A true friend doesn’t let his friends arrange even longer prison sentences for themselves. It’s just not done.
My sincere take.
Rob