Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:
And there goes the hocomania we see on a daily basis over at your website, complete with the whole fraud and prison insanity.
I find your first line to be hilarious as you give a you speak it, but don’t follow it.
I don’t see it the way you do, Sammy.
Your view is that my 14-year effort to get every investing site on the internet discussing the far-reaching implications of Shiller’s “revolutionary” (his word) findings has been a failure because I have not been able to make a dime in those 14 years and because I have been banned at so many sites and because you Goons are the only ones posting comments at my own site. I view the 14-year effort as a huge success.
Making money and being popular are not the only things that matter. I like making money and I expect to make tons of it once the internet is opened up to honest posting on the last 35 years of peer-reviewed research in this field. And while I would not describe myself as popular today, I have had hundreds of people praise me to the skies, saying that my site is the most important investing site on the internet; even a good number of the site owners who banned me wrote me e-mails when they did so apologizing for it and telling me that they personally believe that my work has huge value and that the only reason why they banned me is that they would lose money themselves if they continued to permit someone to tell the research-based realities at their sites (as it upsets investors who have bought into the Buy-and-Hold Model to learn that the numbers on their portfolio statements do not reflect the long-term realities).
I also want to help people. I want to make money and be popular and also help people. I want it all! I think that I am going to be able to get it all in the days following the next price crash. I believe that Buy-and-Hold is the past and that Valuation-Informed Indexing is the future. I know that millions of investors want to know more about what Shiller’s research teaches us because thousands have told me so and those thousands came from only the sites that I have visited and translate into millions once you open up discussion of these ideas to the full universe of investors. So I will in days to come be paid millions while also doing a lot of good for a lot of people. If that’s failure, please bring on more failure for this guy!
We all want the same thing, Sammy. I want to know what works in investing and you want to know what works in investing. Jack Bogle wants to know what works in investing and Robert Shiller wants to know what works in investing. Millions of investors want to know what works in investing. Some are able to ask for what they want today — that’s why I have been gratified to hear thousands of investors tell me that they love my stuff. Others are in pain because they have planned their futures around the Buy-and-Hold claims and cannot bear to hear that they are not in as good shape as they were led to believe they were in. We all come at things from our own perspectives. But we all deep down inside want the same thing.
If Shiller is right (the guy was awarded a Nobel prize for his work so I believe that there is a darn good chance that he is on to something), we are going to see another price crash in the next year or two or three. At that time, the disincentive that exists today for investors to listen to Shiller’s message — that he is telling them that they need to divide their stated portfolio value by two to know the true long-term value of their holdings — goes away. At that time, I believe that we will all be united in wanting to achieve the huge advance in our understanding of how stock investing works that Shiller’s research and the mountain of amazing follow-up research that has been done over the past 35 years provides us. All of the nastiness that we have seen from the Buy-and-Holders over the past 35 years is properly seen as part of a process that over time is taking us to a much, much better place.
I have been exploring those advances in this column for six years now. And I have over 200 podcasts exploring those advances available at my web site. And I have five unique calculators there. And I have hundreds of in-depth articles there exploring every aspect of this new model for understanding how stock investing works. And I have thousands of blog entries. And I have hundreds of thousands of discussion-board posts placed all over the internet and available for retrieval at any time. And I have videos of the speeches that I have given at the financial bloggers conferences. And on and on and on.
Someone in my circumstances (I never studied investing in a formal way and I never managed a big fund) should not be able to produce such a wealth of extremely valuable material. Shiller is the leader of this movement. But you know what? Even Shiller holds back from addressing the how-to aspects of investing according to the new model; there is not one word about how to invest in his book — it’s all theory. I have been advancing the world’s knowledge re the how-to aspects of Valuation-Informed Indexing for 14 years now. In this sense, I am 14 years ahead of Shiller himself! Holy moly! Like I said above, please bring on more failures for this boy!
I obviously would not be 14 years ahead of Shiller if circumstances were different. If the normal order of things applied in this context, thousands of people smarter than me would have jumped in 35 years ago and all of the insights that I developed and wrote about over the past 14 years ago would have been thoroughly explored long before I came on the scene. You Goons started destroying my reputation on the morning when I put up my famous post pointing out the errors in the Old School safe withdrawal rate studies. I didn’t like it. But I didn’t back down in the face of the intimidation. I saw that intimidation as creating an opportunity for someone like me. You were able to pummel me because no one else had explored the implications of Shiller’s research in depth and communicated them effectively to the millions of investors who need to know about them. Okay, then, I would do it!
So I did.
You can call me a failure if you like. I cannot stop you. And you are entitled to your opinion.
But the story isn’t over until the next price crash arrives and we see how millions of investors respond to seeing most of their life savings washed away in the economic crisis that always follows a time-period in which the Wall Street Con Men are successful in persuading large numbers to follow a Buy-and-Hold strategy. I am humbled by the opportunity that was presented to me when I learned that no one had explored these ideas in depth and by the success that I have had in doing so for 14 years now. I love my country. I love the feedback that I have gotten from those who have read my words, both from the kind-hearted normals and from the not-so-kind-hearted Goons who have taught me many important things about how investing works despite their lack of charity.
You think you have won. I think that the American people have won and that I will be richly rewarded for having played a big role in helping to bring their victory to fruition. I believe that the materials available at my site will help us to recover from the economic and political crisis that we will all be enduring following the next price crash.
And I believe that my chronicles of the process by which we over time lost confidence in the long-discredited Buy-and-Hold Model and gained confidence in the somewhat counter-intutive but highly promising and highly exciting Valuation-Informed Indexing Model will help us all out too. We are going to need to put all this nastiness in perspective to be able to move on as a nation to a far better understanding of how stock investing works in the real world. I believe that the kindness that I have shown toward you Goons (in trying to understand what drives you and how your inner demons really live in a less intense form within all of us, including yours truly) will make a difference.
The game isn’t over, Sammy. It’s too early to be declaring winners and losers re this matter. I believe that we are living through a very important transition in humankind’s understanding of how stock investing works. My most important job is to bring us all together so that we all see the benefits that follow from permitting honest and open and frank and respectful discussions. The motto that I consider before pushing the “Submit” button on every post that I advance is: Be as honest as you can possibly be without crossing the line and becoming uncharitable while also being as charitable as you can possibly be without crossing the line and becoming dishonest.” I sincerely and strongly believe that that is the formulation that is going to win the day in the end because that is the formulation that is most in tune with the beliefs that made this country so dynamic and enriching for so many people for so many years.
But I don’t know it all. I could be wrong. We are both just going to have to exercise a wee bit of patience and watch to see how it all plays out in the days to come. While we are waiting for the final curtain to fall on this amazing saga, please know that I wish you all the best that this life has to offer a person regardless of any differences that we have re how stock investing works in the real world.
Hang in there, man. Don’t let the bad guys get you down.
Rob
The Pink Unicorn says
“If Shiller is right (the guy was awarded a Nobel prize for his work so I believe that there is a darn good chance that he is on to something), we are going to see another price crash in the next year or two or three.”
You have made this prediction so many times and continue to wrong. You then move the goal posts out from your original predictions and act like you didn’t make a mistake.
Rob says
I’ve always included the caveat that all of the peer-reviewed research shows that short-term timing doesn’t work. So, no, there is no mistake in making a “prediction” that you acknowledge up front may not prove out. It’s dishonest to suggest otherwise, as you Buy-and-Hold Goons do repeatedly.
The Buy-and-Hold Con is in the process of destroying millions of middle-class lives. Those lives are still destroyed regardless of what abusive tactics you Goons engage in. Your abusiveness does nothing to help those millions of people. I want no part of it. I OPPOSE this massive act of financial fraud. Please tell everyone you know on the internet. I would be grateful to you for doing so if you would be so kind.
I have not moved any goal posts. It is reality that is moving the goal posts. I once put forward a prediction that we would likely see the next crash by the end of 2016. Should I continue saying that in 2017? That would be nuts. Once 2016 is in the history books, it is obvious that the crash is not going to come by the end of 2016 and one needs to move one’s predictions into the future. Time does not stand still. The goal posts move whether any of us do anything to cause them to move or not.
My best and warmest wishes to you, my long-time Goon friend.
Rob
The Pink Unicorn says
It is not short term when you at the timeframe of your first prediction through now. It is not like you made this prediction 6 months ago.
Rob says
Shiller defines “long-term” as 10 years. Valuations started moving back upward in early 2009. Any prediction that suggests that something is going to happen prior to early 2019 is “short term.”
The odds favored us seeing a crash prior to the end of 2016, as I predicted. Odds-on bets sometimes fail. Every reasonable person accepts that. And of course I noted the possibility at the time I made the prediction.
Gee, I wonder why some people call you Buy-and-Hold defenders “Goons.” Some of this stuff is so darn hard to figure out!
Take care, man.
Rob
Anonymous says
Checking the archives, you made a comment on Valuewalk that we would see the crash in 2012. You made a comment at “goon central ” that we would see the crash by the end of 2015 and if not, it could call VII into question.
Rob says
I recall writing a column in which I argued that I thought that we would see the crash in 2012. I liked that column. I thought it presented a good argument. It didn’t happen that way, obviously. But I don’t regret writing the column. If it helped anyone think things through a bit, it served a good purpose.
And I made a prediction at Goon Central (the good old days!) in response to a Goon question that we would see the crash by the end of 2015 or 2016. The odds are small that that is going to happen at this time. My recollection is that I said something along the lines that, if we didn’t see a crash by that time, it would be a legitimate reason to lose some confidence in Valuation-Informed Indexing. I think that’s a fair statement. The purpose of making the predictions was to impose some accountability on the VII concept. If the concept does not produce good predictions, it could lead to bad investing choices. So I think it makes sense for investors to take those wrong predictions into consideration when deciding on whether to follow the strategy or not.
That far I can go. But I cannot go farther than that. Buy-and-Hold has failed EVERY test for 145 years running. The market has never once in history performed in the manner in which it should ALWAYS perform if it is efficient, which it must be for Buy-and-Hold to work for even a single investor. Now that is a truly BAD track record.
Do you have a third option, Anonymous?
I know of only two research-based options and I am a big believer in research-based strategies. So long as one of the two research-based options has a far superior track record, I am going with that option. But my mind is not closed. It is too early in the proceedings to be making dogmatic statements. It could be that Valuation-Informed Indexing is gravely flawed. I don’t think so, but I could be wrong. It could be that something new is going to come along someday that will blow Valuation-Informed Indexing out of the water. It hasn’t happened yet. That much we know for certain today.
Does that cover your concerns?
I think VII is the cat’s pajamas. I think it is the answer. But I am one of those darned humans. I could be wrong.
Take care.
Rob
Anonymous says
Your predictions failed, no biggie, you say. But if you want to convince people that VII works, wouldn’t it be sorta helpful if you could get a prediction right? At least once? Your abysmal track record on predictions is powerful evidence in favor of a strategy that does not rely on predictions. Like buy-and-hold.
Rob says
Buy-and-Hold does rely on a prediction, the most dangerous and irresponsible one imaginable. Buy-and-Hold relies on a prediction that for the first time in history failing to exercise price discipline will produce acceptable results. Never once in 145 years of stock market history has this turned out to be so. We have had an economic crisis every time that Buy-and-Hold has become popular and we have never once had an economic crisis without Buy-and-Hold first becoming popular.
It’s not for me, Anonymous.
I naturally wish you the best of luck with it, however. Just don’t ask me to put my name on any pure Get Rich Quick approach. It’s not my particular cup of tea.
My best wishes to you.
Rob
Anonymous says
Since your memory of your predictions is so fuzzy, below is a direct quote from your own site, June 2014. Please comment specifically on the final paragraph.
“It took 8 year for us to see the first leg of the crash. I think it makes sense to believe that it will take no more than another 8 years to see the second leg. That puts the second crash at the end of 2016 at the latest.
If you say that it could take a full 10 years for the second leg of the crash to complete itself, you could say that it might not happen until the end of 2018. That sounds a bit extreme to me. But I suppose that, given how insanely high we let valuations go in the late 1990s, we cannot rule it out altogether.
Personally, I am expecting to see the crash by the end of 2016. If someone puts the date at the end of 2018, I won’t argue too much. But I personally do not feel comfortable with that date. My take is that we should see it by the end of 2016.
My sense is that you want to discredit Valuation-Informed Indexing and that you want a hard date so that, if the crash does not come by that date, you can say “Aha! It didn’t work!”
If you are going by me, please feel free to use the “end of 2016” date. It we don’t see the crash by then, I would take that as evidence that there is something wrong with the theory behind VII. My guess is that there are other Valuation-Informed Indexers who will not go along with that. I cannot speak for them. I can only speak for me.”
Rob says
Those words support what I said above, Anonymous.
The fact that the prediction did not prove out is a small bit of evidence arguing against VII. The idea in making the prediction was to provide accountability. The prediction failed. So people should count that as a negative re the strategy.
But are you saying that one failed prediction overcomes common sense PLUS 35 years of peer-reviewed research PLUS 145 years of stock return history? Huh?
ALL of the evidence available to us (except this one prediction by some guy whose claim to expertise is that he figured out how to get stuff posted on the internet) supports Valuation-Informed Indexing. Should Shiller give back his Nobel prize now?
Buy-and-Hold failed intellectually 35 years ago. It was a mistake. You Goons have kept it alive in a practical sense through the most brutally abusive and criminal smear campaign in the history of the United States. What does that say about the merit of the “idea” you promote? If you don’t have enough confidence in the idea to argue its merits in civil debate, why should anyone believe in it? Please give me a break.
Get Rich Quick is not the answer, Anonymous. I am sure. Perhaps VII can be improved. We will find out when we have a national debate. I would love to see thousands of smart and good people get involved in the effort to further advance our understanding of how stock investing works. I believe that there’s a good chance that those people will contribute insights that will help us all. It ain’t gonna happen until your prison sentence is announced. People are not going to speak up until we begin enforcing the laws against financial fraud, right? So that’s the first step, no?
It’s all downhill from there. We OBVIOUSLY want to point out any caveats that apply to VII. We obviously don’t want to repeat the mistakes that the Buy-and-Holders did and become dogmatic about something just because today’s research supports it. I hope that I have the good graces to acknowledge any mistakes that are brought to my attention. Had Bogle been open to admitting his mistakes for the past 35 years? What does that say about the merits of the strategy he pushes? Has he not been seen participating at a board that also permits participation by the sorts of individuals who have posted in “defense” of Mel Linduaer? What does that say about the man’s integrity and even about his self-respect?
It’s not for me, Anonymous. I prefer to endorse investing strategies that do not require that I violate U.S. law to be able to “defend” them in internet discussions. Call me madcap.
Yowsa!
Rob
The Pink Unicorn says
It wasn’t just one failed prediction. You made the same prediction for 2012 and continued to move it year after year.
Anonymous says
So what in 2014 was “something wrong with the theory behind VII” is now a “small bit of evidence arguing against VII”. No wonder you are attracted to political sites, with spin like that.
Two bottom line facts: 1) VII requires market timing, and 2) you have demonstrated zero ability at market timing.
Rob says
It wasn’t just one failed prediction. You made the same prediction for 2012 and continued to move it year after year.
And I still make it today.
You understand that it doesn’t matter when the prediction comes true, right?
If the prediction comes true AT ANY TIME, Valuation-Informed Indexing FAR outperforms Buy-and-Hold.
That’s the story. You can’t lose going with a research-based strategy and you can’t win going with a pure Get Rich Quick approach. It’s been going like that for 145 years running now. The rational mind cannot imagine how it could ever turn out any other way.
Given all that, why do you stick with the pure Get Rich Quick approach? It’s emotion, Pink. That;s what messes us investors up every time. I believe that the experts should be trying to help by teaching us what the peer-reviewed research says rather than telling their Buy-and-Hold Lies to turn a quick buck.
My sincere take.
Rob
Rob says
Two bottom line facts: 1) VII requires market timing, and 2) you have demonstrated zero ability at market timing.
VII certainly requires long-term market timing. Which has always worked for 145 years running. Contrast that with Buy-and-Hold, which AVOIDS long-term market timing, a strategy that has failed for 145 years running. I wonder which strategy is superior in the eyes of someone not addicted to a pure Get Rich Quick approach.
It’s true that I have zero ability at short-term timing, just like everyone else. So what? I don’t let that interfere with my willingness to engage in long-term timing (price discipline) like the Buy-and-Holders do. So I haven’t been taken by the con pushed so relentlessly by the Wall Street Con Men. So what’s the problem?
The problem is the emotion on your end, Anonymous. Emotion that you have evidenced in every post you have put forward for 14 years running now. Why is going pure Get Rich Quick so wonderful again? I keep forgetting.
Rob
Anonymous says
“You understand that it doesn’t matter when the prediction comes true, right?”
So you admit your predictions mean nothing, and you have absolutely no idea when the next crash will come. Only that it will come someday. In the “long term.” Congratulations! Bogle, Pfau, Shiller and all other investors agree with that.
Anonymous says
“You understand that it doesn’t matter when the prediction comes true, right?”
Another 30 years passes and the market is 3 times higher , yet your 65% crash didn’t happen and you were still waiting.
Meanwhile: buy, hold and rebalance keeps working as always.
Rob says
If a crash is built into the market price when stocks are insanely overvalued and not when stocks are fairly valued, then you can’t count those extra fantasy gains as real when planning your retirement. Do the calculations properly and you get very different numbers.
That’s the Buy-and-Hold Con, Anonymous. As you of course know.
Not this boy.
Rob
Rob says
Another 30 years passes and the market is 3 times higher , yet your 65% crash didn’t happen and you were still waiting.
What you are describing has never happened. Not once in 145 years of stock market history.
Hey! Maybe it will all turn out different this time, right? Anything can happen.
Still, Get Rich Quick fantasies don’t pay the electric bill when its cold outside. Please try to find somebody else. I prefer honest and accurate investing advice. The Buy-and-Hold Con is not my particular cup of tea.
I wish you the best of luck with it all the same, however.
Rob
Anonymous says
So, you make various predictions and saY they are based on the data and that if they don’t come true, we should question VII. However, now that they haven’t come true, you say it doesn’t matter. Looks like hypocrisy.
Don’t you need that crash to come through sometime soon for your process to work? After all, it will take some time to get the articles in the New York Times, the prison sentences, the opening of the forums, the Bogleheads forum handed over to you, the speaking tours, the windfall/settlement payments………..yet you now say the timing doesn’t matter?
Anonymous says
“What you are describing has never happened. Not once in 145 years of stock market history.”
We haven’t had the same financial controls for 145 years. We haven’t had the same government intervention (fiscal stimulus)for 145 years, we haven’t had the same global economy for 45 years, innovation is moving at s much more rapid pace, etc.
Rob says
Don’t you need that crash to come through sometime soon for your process to work?
The fact that the predictions did not come through is information. It reflects negatively on VII. I certainly think that people should take it into consideration.
The question is how much weight to put on it. I would put little weight on it. We have 145 years of data showing that VII is the answer. Compared to a prediction being off a little bit, that’s huge. No reasonable Goon would let the tail wag the dog.
As for all the rest, I would say that the case for VII gets a tiny bit weaker with each year that passes without us seeing a price crash. If we go 145 years, VII would be tie with Buy-and-Hold and that obviously would not be good. 145 years is a long time, however.
At some point short of 145 years, we should begin looking for a third option, in my opinion.
Buy-and-Hold is dead. It was just a mistake. That’s been settled for 35 years. VII looks very, very, very strong today but there is one tiny sign that we will need to keep an eye on as the years pass by. At some point (50 years) we should begin looking for a third option.
My personal (strongly held) hunch is that the next price crash will quiet any concerns because everyone will be advocating VII once we open every site to honest posting. You’re making a mountain out of a mole hill, as internet Goons have been known to do from time to time.
Hang in there.
Rob
Rob says
We haven’t had the same financial controls for 145 years. We haven’t had the same government intervention (fiscal stimulus)for 145 years, we haven’t had the same global economy for 45 years, innovation is moving at s much more rapid pace, etc.
It all might turn out different this time from how it has always turned out before. How many times have Get Rich Quickers fallen for that old line?
Wake me when there’s some evidence of these fantasies playing out in the real world. The earth might get hit by a meteor tomorrow. For some funny reason, i don’t feel comfortable betting my retirement money on that possibility.
But I wish you the best of luck with it.
Rob