Set forth below is the text of a recent comment that I posted to the discussion thread for one of my columns at the Value Walk site:
Rob,
His words are clear. Stop making things up. PERIOD.
His research is also clear. And his Nobel prize is clear.
I can accept that Shiller may not have a complete understanding of how long-term timing works. My sense is that he does not. He has a partial understanding. To make his understanding more complete, he needs to engage in daily back-and-forth with lots of people exploring the subject from lots of different angles. That’s how we humans learn.
It is this daily back-and-forth in which lots of us offer lots of different takes that has been missing in investing discussions for 35 years now and which has been holding up progress for 35 years now. I mentioned up above that Shiller has made it his life’s work to show why exercising price discipline is required when buying stocks. I have made it my life’s work to get this national debate started.
I have chosen to do this because having the national debate is so darn important. You are not wrong to point out that Shiller said that P/E10 should not be used for timing. He really did say that. It is an exceedingly odd thing for the person who discovered the importance of price discipline to say — it is only through the practice of long-term timing that investors can exercise price discipline! So we really need to get to the bottom of the issue that you brought to the table with your post.
Where we get on very different tracks is when you point out one aspect of the puzzle and ignore the other. Shiller really did publish research showing that price discipline is required back in 1981. He really did write a book explaining why Buy-and-Hold can never work for a single long-term investor. He really was awarded a Nobel prize for his work in this area.
We need to get Shiller to address these matters. You cannot do the subject complete justice and I cannot do the subject complete justice. We need Shiller to address the subject head-on in a clear and complete and firm statement. If you really believe that Shiller thinks that long-term timing does not work, you should feel comfortable encouraging him to address the matter.
You Goons have contact with Mel Linduaer and Mel Lindauer has contact with John Bogle. If you asked nicely, Lindauer would be willing to ask Bogle nicely to ask Shiller nicely whether he believes that long-term timing works or not. And Shiller is a nice man. Shiller would agree to the request if Bogle put it to him in a nice manner. So we have the means by working together to get a FINAL answer to this perplexing question.
The key is that you need to be open to hearing what Shiller really thinks. He may issue a statement agreeing with me rather than with you and Bogle. So you are taking a risk going ahead with this suggestion to contact Lindauer. I encourage you to do it. If Shiller says “this Rob Bennett fellow is a fool, I do not AT ALL believe in long-term timing, I think thus guy is dangerous,” I will write a column here reporting on what he said and putting that statement in the headline.
Working together, we could learn something important. Working together, we could advance the ball in an important way for lots of people. If you are game, I am certainly game.
I naturally wish you all the best that life has to offer a person in any event, my good friend.
Rob
Bogle and Shiller have made their positions clear. There is nothing more that needs to be said.
IF the market crashes in the next 4 years people will just blame it on Trump and say it is a rehashing of Bush. Buy and hold won’t even enter the conversation.
Bogle and Shiller have made their positions clear. There is nothing more that needs to be said.
Um — That makes sense, Anonymous.
Truly outstanding!!!!
Rob
IF the market crashes in the next 4 years people will just blame it on Trump and say it is a rehashing of Bush. Buy and hold won’t even enter the conversation.
Yikes!
I guess you can see why I would find that a seriously disappointing turn of events, Earl. It could happen. I thought that Greaney would be banned from Motley Fool following his first death threat. I don’t exactly have a great track record with my predictions re how this stuff is going to turn out.
We’ll just have to wait and see how it all plays out.
Take good care, man.
Rob
How long should we wait for things to play out?
You can wait as long as you please, Anonymous. Or you can not wait at all if that’s your preference. You decide for you. No?
I am going to wait for so long as I believe that the Greaney retirement study (and other Buy-and-Hold retirement studies) lacks an adjustment for the valuation level that applies on the day the retirement begins and that there is 35 years of peer-reviewed research showing that such a valuation adjustment is required to get the numbers right. If I ever came to doubt either of those things, I of course would say so and then I would not be waiting for anything anymore.
For so long as I believe those two things, I would be committing a felony (financial fraud) by leading people to believe that it is my view that they don’t matter. Going to prison is not high on my bucket list. So, for so long as I believe those two things, I will wait until every investing discussion board and blog on the internet is opened to honest posting on safe withdrawal rates and scores of other critically important investment related topics or until my beliefs re these matters change. I don’t see that I have a choice. And I of course decide for me just as you decide for you.
I naturally wish you all the best things that this life has to offer a person regardless of how long you elect to wait. Take good care, old friend.
Rob
Your conditions for ending your wait are delusional. So you will wait forever. Because you have no choice. Doesn’t that make you sad? People, in general, like to have choices.
And what about that recent article about PE10 being above average over 95% of the time since 1990? When you bailed on stocks, you thought such a thing was utterly impossible. Because your read of Shiller’s book told you it was impossible. Isn’t your real beef with Shiller, for leading you astray?
I don’t believe that I will wait forever. I acknowledge that it is theoretically possible. Does it make me sad that this is so? It does. But not as sad as it would make me to not wait. Fate deals us a hand and out job is to play it the best of our ability. Yes, people like to have choices. But telling lies to ourselves that our choices are unlimited always take us to a very bad place. We have a limited number of choices. Some things are just outside the realm of possibility. For me, telling lies about the numbers that my friends use to plan their retirements is outside the realm of possibility. It is what it is, like the rain and the wind.
That last phrase comes from “Percy’s Song,” where Dylan discusses Fate and how it teaches us over time about the limits it places on our ability to choose where out lives will go:
https://www.youtube.com/watch?v=urup5PbX2Ic
I sat down and wrote the best words that I could write…
I stood up so slow with no other choice but for to go….
I walked down the courthouse stairs and I did not understand…
The only song my guitar could play was “Oh, the cruel rain and the cruel wind.
That’s the real turtle soup and not the mock, in this boy’s opinion.
I’ve written a number of columns about the research paper that you refer to that will be showing up at the Value Walk site in weeks to come. I have four prepared as of today. I have considered writing a fifth column re that paper but I am not sure whether the last one is a good idea or not, I am still thinking it over. The fact that I would devote four or five columns to that paper shows any reasonable person that I believe that its publication is an important development. I certainly do not agree with the conclusions stated by the authors of the paper. But I just as certainly believe that they have advanced the debate by putting their energies into writing the paper and I just as certainly am grateful to them for doing so. That research paper is good stuff.
I have also considered writing a column about the article in the Washington Post (by Barry Ritholtz) pointing out that the P/E10 has been above average 95 percent of the time since 1990. I agree with your suggestion that that is an important point. The reason why I am unsure whether to write a column on it is that the same basic point is made in the research paper noted above and I devoted one of the four columns on that paper to this particular point. So I tend to think that it would be redundant to write a column on the Ritholtz article as well. If I can think of a way to come at the point from a fresh angle I will add that one to my list of upcoming columns.
I hope that I would not have described what has happened from 1990 forward as “impossible.” Shiller’s research does not show it to be impossible. Nor does the 35 years of peer-reviewed research that confirmed and expanded on Shiller’s “revolutionary” (his word) findings. I would certainly agree that, if you had asked me in 1990 what the likelihood was that we would see what we have seen since 1990, I would have said that the odds of such an outcome were exceedingly low. That much I can agree to.
My take is that it is the promotion of Buy-and-Hold as a research-based approach to stock investing that caused the unlikely turn of events. People love, love, love the idea of rooting their investing strategies in research. The one thing that people don’t like about stocks is the risk. Root your strategy in research and you mitigate the risk of investing in stocks dramatically. So people have flocked to the Buy-and-Hold strategy.
But the people who do research are humans and we humans are flawed creatures. We make mistakes. Most of us understand that, when we do, it is critical to admit the mistake and get it behind us. But the hardest mistakes to acknowledge are the ones that hurt the most people. If I get a traffic ticket on my way home from the grocery store, it would not be too hard to tell my wife. I wouldn’t want to. I would be embarrassed that I had cost us that money by behaving irresponsibly. But if I had an affair, that would be about 500 times harder to acknowledge. The reason I would feel such an inclination to keep it zipped re the affair is not that the affair does not matter so much, it’s that the affair matters so terribly much more.
The bigger a mistake, the more harm it does, and the more harm a mistake does, the harder it is to come clean. The Buy-and-Hold mistake — the idea that it is not necessary to practice price discipline — is the biggest mistake ever made in the history of personal finance. So it is understandable that the Buy-and-Hold mistake has gone uncorrected longer than any earlier mistake and has thus caused more damage than any earlier mistake. We can measure how bad a mistake is by looking at how much resistance we feel to acknowledging it. Given what we have seen from you Goons over the past 15 years and from our tolerance of your insanely abusive behavior, I think it would be fair to conclude that the Buy-and-Hold mistake was a true whopper.
It’s because this mistake was such a whopper that I was not able to anticipate back in 1990 or even in 2002 where the mistake would take us. I am in good company re this one. Shiller predicted in 1996 that those sticking with high stock allocations would regret it within 10 years because Buy-and-Hold was in the process of bringing on the biggest economic crisis in U.S. history. He was right, but he was two years off. We did not see the Buy-and-Hold Crisis begin until September 2008. Shiller was not able to appreciate how high prices would go over the following four years because they had never gone that high before. We went into completely uncharted territory with this particular bull market and so there was simply no way for anyone who relies on the historical return data to anticipate how much harm we would do to ourselves.
Shiller uses the historical data to inform his thinking re how stock investing works. People followed Get Rich Quick strategies prior to 1965. But, until 1965, there was no one saying that there was peer-reviewed research supporting the pure Get Rich Quick approach (Buy-and-Hold). Shiller was not proven wrong re his take on how stock investing worked when we did not see an economic crisis by 2006. The way in which things have played out is 100 percent consistent with his take and 0 percent consistent with Fama’s take. But he was wrong on the details. We entered a new and more dangerous world in 1965, when people who put themselves forward as disinterested scientists started saying that the historical data supports the pure Get Rich Quick approach.
Those claims did not change the fundamentals of how the market works (valuations still affect long-term returns) but they did affect how high valuations can go before crashing and of course how much damage we can do to our economic and political systems by promoting the Buy-and-Hold “strategy.” Shiller got the important thing right and the details wrong. I have done the same. I don’t know of anyone who got the details right. What we saw in the late 1990s is something we have never seen before. Even the Buy-and-Holders acknowledge that. It has taken some time for us all to come to grips with how much damage we did to ourselves during those years of insanity. We will get there. We are coming around slowly (according to me!).
Now that I have written these words, I am thinking that I might have my fresh angle for the Ritholtz column. I am now leaning in the direction of writing that one up. So we are looking at four or five articles re the research paper and one re the Ritholtz article, both of which were brought to my attention by you Goons.
People ask me all the time why I even bother to talk with you given your obvious hate for the last 35 years of peer-reviewed research and all discussions of the implications that follow from it. I talk to you because, even though your hate is a huge negative, you truly do believe in Buy-and-Hold yourselves and you truly in your heart want to understand how stock investing works in the real world. The conflict between those two realities causes you to bring research papers and articles of this sort to my attention and my efforts to be responsive to your sincere questions help us all to come to a better understanding of this important subject matter (according to me!). I am grateful for your help in this regard. It makes a difference.
I hope all that helps a bit, my good friend.
Rob
Before. You would always say that you know how investing in the the stock market works. In light if the recent article referenced above, you are now saying that the stock market is not acting the way it should act.
Should a strategy be based on how it is likely to act in order to be successful?
The stock market has always acted the same way, Anonymous. 100 percent of the evidence available to us shows that valuations are 80 percent of the story (just as you would expect — price is 80 percent of the story in ALL markets). Zero percent of the evidence supports Buy-and-Hold. All that is clear to anyone who is familiar with the last 35 years of peer-reviewed research.
It is not a major change that a decision by the Wall Street Con Men to push the pure Get Rich Quick approach (IGNORING price) harder than it has ever been pushed before caused prices to get more out of whack than ever before. That’s just what you would EXPECT to see happen.
The reason why Shiller and I did not get it perfectly right all along is that we are human. No one has ever seen anything like this before. The Wall Street Con Men have always pushed Get Rich Quick schemes; there’s tons of money in them and the Wall Street Con Men LOVE taking money out of the pockets of millions and putting it into their own pockets. But never before did they make the false claim that there is actually peer-reviewed research showing that the pure Get Rich Quick approach might work. That’s the something new under the sun that made it hard for Shiller and me (and thousands and thousands of others) to appreciate just how dangerous this Buy-and-Hold stuff really is.
Now we know.
Not all of us, of course. If we all knew, you would not see a Ban on Honest Posting at a single site. Honest posting on the past 35 years of peer-reviewed research is today banned at every large investing site on the internet. It’s a shame, you know? But it is what happened. You can’t continue to push Get Rich Quick strategies if you permit honest posting. There is now 35 years of peer-reviewed research showing that Buy-and-Hold can never work, that it is nonsense, that it is a scam, a money-making thing.
So Buy-and-Hold will go down. I expect to see that happen following the next price crash. Then we will all pull together. We all want the same things. We all want to know how stock investing works in the real world. So why wouldn’t we all pull together? Bogle wants us to invest effectively. So he will flip to the Valuation-Informed Indexing “side” following the next crash. What do you think is going to happen to you Goons after Bogle flips? I think it is fair to say that you will be placed in prison cells, where you belong. Is that not a fair supposition?
With you Goons in prison cells, what the heck would there be to hold the rest of us back? There’s nothing that I can think of. On the morning of May 13, 2002, we had 20 percent of the Motley Fool community saying that Valuation-Informed Indexing was the greatest thing they ever learned about and that they wanted to explore the entire story. We had another 60 percent saying that, while they were not yet convinced, they sure wanted honest posting to be permitted so that, if the case turned out to be strong enough, they would become convinced. You Goons never constituted more than 20 percent of the community.
Once the 20 percent that has engaged in criminally abusive behavior is placed behind the cells of prison bars, I really don’t see how things could ever stop getting better and better and better as time passes. That’s the American way, is it not? That’s the reason why we made financial fraud a felony in the first place, to protect the American way when it came under attack by the sort of individuals who have put up posts in “defense'” of Mel Lindauer and John Greaney.
Did Robert Shiller or Rob Bennett get it all 100 percent right at every stage of the proceedings? We did not. We are human like all the rest. I was a freakin’ Buy-and-Holder on the morning of May 13, 2002. I obviously had come big gaps in my understanding of how stock investing works on the day when I put forward that fateful post. So what, you know? I stuck to my guns. I know that I cannot do good work posting dishonestly and so I insisted on recognition of my right to post honestly. And that has made all the difference. I know a lot of things today that I did not know 15 years ago as a result of that fateful decision. And I have every reason to believe that I will know a whole big bunch more 15 years from today than I do today so long as I continue to insist on my right (and the right of all my fellow community members) to post honestly.
The stock market has always performed the same way as every other market that has ever existed. Paying attention to price has always been 100 percent critical. Buy-and-Hold has always been pure garbage. I was fooled because I am a human and we humans learn by talking things over and I happened to become an investor during a time when a lot of people believed that Buy-and-Hold was a real thing. Naturally I made mistakes. We all did. People cannot learn in an environment in which the sorts of individuals who have put up posts in “defense” of Mel Lindauer and John Greaney are permitted to participate in internet discussions. I mean, give me a freakin’ break.
You Goons are going to prison. That brings the problem to an end. Shiller won’t be making so many mistakes once honest posting becomes the norm in this field. Neither will I. Neither will Bogle. Neither will anyone else.
In an ideal world, Bogle would have acknowledged his mistake on the day that Shiller’s “revolutionary” (his word) research was published. It didn’t happen. That’s unfortunate. But it’s certainly no reason not to believe that the mistake will not be corrected down the line. Any mistake that causes as much human misery as Buy-and-Hold has caused is going to be corrected in time by the society suffering that human misery, Again — please give me a freakin’ break.
It’s a process. We are a long ways away from the state of confusion that caused us to tolerate Bogle’s unwillingness to come clean back in 1981. We know more all the time. We understand more all the time. We are well on out way to experiencing the biggest surge in economic growth in U.S. history. It is happening, Anonymous, and there is nothing that you and your Goon pals can do to hold us back. The people of the United States possess more power than a band of internet Goons backed by a band of Wall Street Con Men. It’s not a close call. There has always been only one way that this thing could turn out in the long run.
Or at least so Rob Bennett believes. I could be wrong. We will have to wait a bit to see how it all plays out following the next price crash. I naturally wish you the best that life has to offer a person in any event, Goon friend.
Rob
In short, you were wrong. That’s all you needed to say.
Okay, Anonymous.
Please take good care.
Rob
The fact remains that dumping all your stocks in the mid 90’s, never to return, was a catastrophic financial mistake. One that Shiller induced you to make. Mr. Nobel Prize has done you far more harm than any goon.
On a risk-adjusted basis, I am today ahead of where I would have been had I followed a Buy-and-Hold strategy. The next crash will take me much farther ahead. And then I will see compounding returns on the differential for decades to follow.
If that was a catastrophic financial mistake, I can only pray that I suffer many more such catastrophic financial mistakes. Shiller helped me out big time. I am grateful to Fama and Bogle too because I couldn’t have done it without them either. But I sure do not see how any halfway reasonable person could deny that I owe a big debt of gratitude to Shiller for his Nobel prize-winning work.
It is this sort of statement that causes me to refer to you as a “Goon,” Anonymous. Holy moly!
Rob
Risk adjusted? To the opposite, I can make a claim that my portfolio is undervalued and is actually worth twice what my account statement says.
The measurement is what someone else is willing to pay for it on that particular day. Your house, for example, is worth what a potential buyer will give you right now. You don’t value it at some other number that fits a story.
Despite your guesses over the years, you have been wrong and the market has done significantly better, leaving you behind. You should admit that you made the wrong decision to exit the market.
“The measurement is what someone else is willing to pay for it on that particular day.”
This is the entire freakin’ point, Anonymous.
If what someone was willing to pay at the time was the true value of stocks, P/E10 would not predict anything. If what someone was willing to pay at the time was the true value of stocks, looking at valuations would be a waste of time. In that sort of world, timing would be a bad idea. In that sort of world, Buy-and-Hold would be the ideal strategy.
We don’t live in that sort of world. We live in a world in which to know the true value of your portfolio, you need to adjust for the overvaluation or undervaluation that applies on that day. That’s why Shiller’s findings are considered “revolutionary” (his word). Before Shiller published his research, people believed what you are saying here. Now we (at least some of us!) know otherwise.
Saying “the measurement is what someone else is willing to pay” in the year 2017 is like saying in the year 2017 that the earth is flat or that man will never get to the moon or that bleeding is the best cure for most diseases. There was once a time when people thought these things. But it has been a long, long time since these ideas were disproven.
What do you think it means to say that stocks are “overpriced” if it doesn’t mean that the stated price is incorrect? If the stated price is incorrect, you can’t just treat the stated price (“what someone else is willing to pay”) as accurate.
You know all this, right? This is one of those times where I suspect that you are joking around but am not 100 percent sure. Things get tricky when there is cognitive dissonance. Do you really not understand what the word “overvaluation” means? I am not trying to insult you. I just don’t know how to respond to words like this without hitting at the basic point that you are denying the meaning of the word that we have been talking about for close to 15 years.
If stocks are currently selling at three times their fair value, then the measure of their value is certainly NOT what someone else is willing to pay for them on that particular day. The measure of their value is what someone else is wiling to pay for them on that particular day DIVIDED BY THREE.
That’s the entire point. You must divide by three. Greaney got the numbers wildly wrong in his retirement study because he didn’t do that. This is basic stuff. This should not be so darn difficult.
Rob
And since you agree it is what someone is willing to pay for it, you admit you are WRONG when you tell someone that it should be cut in half (or by 65%.
The amount that someone will pay you for a stock portfolio today is the value it possesses for today only.
The valuation-adjusted price is the true, long-term value of that portfolio.
Day traders should be looking to what someone will pay for their stocks TODAY.
Middle-class people seeking to finance their retirements should be looking to the REAL long-term value of their portfolios, the valuation-adjusted price of their portfolios.
Buy-and-Hold is a scam, Anonymous. It is a money-making thing. It has made billions for the Wall Street Con Men while bleeding the middle-class of this nation dry. I do not approve.
I hope that helps a bit.
Rob
That is the value today and you have demanded nitrates that your forecasts of 65% drops are wrong. Your guess is no different than saying it is worth twice that. Further, you are and have been greatly behind those that stayed in the market. Results matter.
We’ll see how it all plays out following the next price crash, Anonymous.
I wish you all good things.
Rob
“We’ll see how it all plays out following the next price crash, Anonymous.”
We have heard that for many years. That didn’t work out the way you said it would.
I’m not the one looking forward to life in a prison cell, Anonymous.
I think it would be fair to say that it has worked out for me about 5,000 times better than it has worked out for you.
I am still willing to help you out to the extent I can.
But I am not Superman.
My best wishes to you.
Rob
“I’m not the one looking forward to life in a prison cell, Anonymous.”
The rest of us don’t live in a pretend world like you do.
We’ll see how things play out following the next price crash, Anonymous.
Does that work for you?
Rob
“We’ll see how things play out following the next price crash, Anonymous.
Does that work for you?”
We have already seen it played out. Things have worked out for me just fine. I don’t need to rely on a windfall.
That sounds good.
It’s hard to argue with that.
Rob
Don’t you wish you could say the same thing.
Yes and no, Anonymous.
There have been two sides to these discussions, a substance side and a process side. The process side has been the most horrible nightmare that I have ever encountered. The substance side has been the most wonderful dream that I have ever experienced. I wouldn’t have enjoyed the hundreds of wins that I have seen on the substance side if I had not lived through the hundreds of losses that I have lived through on the substance side.
I have asked myself from time to time whether I would put up that fateful post of the morning of May 13, 2002, all over again if I had a chance to go back and do it over. I cannot give a definitive answer to that question. The pain on the process side makes me think that it would be crazy to choose that path again. But the amazing stuff on the substance side makes me think that there is no way on God’s green earth that I could ever elect to choose a different path. I have achieved everything that I had ever hoped to achieve with my life multiplied by 500. That’s not nothing. I have been blessed in a very big way.
The reality of course is that none of us get do-overs. The cards are dealt one by one and we play our hands to the best of our ability. I am not happy or unhappy about where things stand. I am insanely happy about where things stand on the substance side and I am insanely unhappy about where things stand on the process side. And of course there is no way to separate the two. We cannot enjoy the substance side wins without working through the ugly, smelly process side stuff. This thing came to us as a package — substance stuff wonderful beyond words and process stuff horrible beyond imagination.
This is why I sometimes use that catch phrase — “I love my country.” I believe that our economic and political systems provide us the means to turn this all into something very, very, very good. I believe that we are as a society working our way through a process that in the end lands us in a place where we all deep in our hearts very much want to go. My job is to steer us to that place.
I am not jumping up and down in happiness. But I am very excited about what the future appears to hold for all of us. I see us as being on the one-yard line in the last minutes of the Super Bowl. I still have to get the ball across the goal line or years of hard work go to waste. But if I can make that one last play for one yard of ground we all get to experience something so good that we will for the rest of our lives look back at these days as the days our our lives that really meant something, the days that made all the other days worth the trouble they brought.
So I don’t want to drop the ball, you know? I want to make a good pass or a good run or whatever it takes to get the job done. I don’t focus on whether I am happy or unhappy about where things stand. I focus on getting that ball across the line. I am aware of how happy millions of people will be if I do that. And I am aware of how much human misery will follow if I drop the ball or get intercepted or get tackled. I pray that I am up to it.
I am not even a tiny bit sad that we are as nation on the one-yard line in the Super Bowl. That’s amazing. It is of course a huge honor to have played such a big role in taking us this far. But I do want to make that one last play. Even with the hundreds of successes on the substance side, I can’t afford to let down my guard and celebrate too much until I have made that last pass or that last run. That’s my focus. I feel a combination of excitement of where we all will be when we open the entire internet to honest posting re the implications of the last 35 years of peer-reviewed research in this field combined with a sense of responsibility that I not get too giddy about all the big gains already achieved and start thinking that those last few yards will come automatically — we have to work it to get there and so this is not the time to ease up and do something stupid, no matter how close to the goal line we are today.
I hope that all helps at least a tiny bit.
Love you, man.
Rob
Are you sure you don’t know Barry Ritholtz? Lately he’s been writing your biography. Here’s another gem:
https://www.bloomberg.com/view/articles/2017-01-05/the-philosophical-failings-of-forecasting
The whole article is right on the money, but especially this:
“For investors, one of the biggest risks of forecasting is the unfortunate tendency to stay wedded to predictions. Consider as an example the person who makes a bearish or bullish forecast. The market then goes against them. Rather than admit the error, they double down on the claim. The fear isn’t only that of being wrong, but looking even more foolish as they capitulate just as the unexpected move comes to an end. This fear has caused legions of investors to miss big gains or to sell at the lows after a crash.”
You’ve predicted crashes for years. Doesn’t happen. You’ve missed out on over 20 years of gains. But you NEVER admit a mistake. Heck, you’ve never even made a mistake – you’re ahead on a “risk-adjusted basis”.
Buy-and-holders don’t forecast. They work, save, and keep working and saving. The result is a successful retirement.
I don’t know Barry well. He once posted a link to one of my long Knol articles at his site and that brought me the biggest day of traffic that I ever enjoyed. So I certainly have a soft spot in my heart for him.
I agree with the point that he is making re emotions. We all do indeed double down on our beliefs. So this is an important insight.
However, I am coming at things from a different perspective re investing issues. Yes, it certainly is so that P/E10 can tell me to lower my stock allocation and then, once I do so, prices could shoot up dramatically and I could “miss out” on gains. But I am just not concerned about “missing out” in the short term. My focus is on the long term. You cannot “miss out” in the long term by adjusting your stock allocation to where it needs to be to keep your risk profile constant. Keeping your risk profile constant ALWAYS works in the long term. It is not even possible to imagine how that could ever not be so. And, sure enough, the 145 years of historical return data available to us shows that this always HAS been so in the real world.
In the short term, Barry is right. That’s I don’t advocate short-term timing. Short-term timing is a disaster. Long-term timing is a very different animal. Long-term timing is price discipline. It is silly to imagine how exercising price discipline could ever be a bad thing. Price discipline is what makes markets work. Failing to exercise price discipline is a catastrophic mistake. Markets in which large numbers of market participants come to believe that failing to exercise price discipline might be a good idea always collapse. In the stock market, we call such a collapse a “crash.”
You are wrong when you say that Buy-and-Holders don’t forecast, Anonymous. When they make a decision not to exercise price discipline, they are implicitly making a forecast that this will be the first time in history when the stock market will behave in a manner in which it never has before. Otherwise, why would they do such a thing? In every other market in which Buy-and-Holders participate, they exercise price discipline. They check prices when they buy cars and bananas an sweaters. Why do they fail to do this when buying stocks but for their “forecast” that stocks are going to behave in an entirely new way during their lifetime than they have ever before behaved?
Then they do just what Barry is saying they do here. They start out with a modest belief in Buy-and-Hold, based on the “forecast” that it is all going to be different this time. Then there is a bull market and they get excited about the Pretend Gains that their belief in this crazy forecast is bringing them. Then their pride gets involved. They give themselves credit for having been so much smarter than all of the non-Get Rich Quick investors who did not buy into their amazing forecast. They tell their friends about the amazing forecast and how it is the quick and easy road to riches. This makes it even more important that they never question the forecast in any way or permit others to question it. That crazy forecast MUST be right! If it isn’t, then they are fools. And they CANNOT be fools. Their Pretend Gains prove that. They are so smart, so different, so much better than all those dumb investors who follow research-based strategies.
Believing that price matters is just common sense, Anonymous. Price ALWAYS matters in a market. It is an absurd idea that price could ever not matter. Yes, I can “forecast” that a practice of ignoring price is going to end in tears just as I can forecast that getting addicted to heroin is probably not going to lead a person to good places. Ignoring price is foolishness. And it is addictive foolishness. It is an extremely self-destrictive thing to do. If there weren’t so much money to be made pushing Get Rich Quick strategies, no one would advocate Buy-and-Hold. But of course the reality of our world is that you can persuade people to do all sorts of horrible things if you put enough money in front of them.
You say that Buy-and-Holders “work, save, and keep working and saving.” How about exercising price discipline when buying stocks? Do they do that? If not, why not? That’s the missing piece, in my view. If you want your investing strategy to work in the long term, you need to exercise price discipline. I feel comfortable “forecasting” that those who fail to follow that simple rule will live to regret it in the long run.
But we will have to wait and see to find out for sure, right? I am stating my sincere belief. I can do no more and I can do no less. We will see how it all plays out following the next price crash.
I hope that helps a tiny bit, my good friend.
Rob
Thanks much for pointing us to the article, by the way.
I have only read the excerpt that you posted but I intend to read the rest later today. This one might serve as the basis for another column entry. The viability of forecasting is obviously a big issue re the debate re the merits of Buy-and-Hold and Valuation-Informed Indexing.
I really do appreciate it that you take the time to let me know about these sorts of articles even though we obviously almost always disagree re the conclusions that can properly be drawn from what is written in them.
Rob
Between this article and the other article, VII doesn’t look so great. That doesn’t bode well for getting your windfall.
I don’t know, Anonymous. I am picking up a very different vibe re all this.
I guess we’ll have to wait a bit to see how this all plays out.
Please take good care.
Rob
It is kinda too late to see “how it all plays out” when you get to a certain age, right?
No. It is impossible that it could ever become “too late” to provide millions of people access to the first true research-based investing strategy. There is a compelling need for accurate and honest investing advice. Could it ever be too late to provide the cure for cancer? Could it ever be too late to discover the fountain of youth? These are silly questions. With something this important, there is no “too late.”
It is theoretically possible that I could become injured or something and that it would thus become too late for me personally to do this work. Then one or both of my boys or perhaps my wife would take it up. If they were not available to take up the work, I have a friend to whom I have given an electronic material of everything at the site who could take my place.
The shift from Buy-and-Hold to Valuation-Informed Indexing is the biggest advance in the history of personal finance. BY FAR. There is nothing else even in a close second place. This has to get out, Anonymous.
It is a darn shame that we did not learn what Shiller taught us in his “revolutionary” (his word) 1981 research in 1961 or 1941 or 1921 or 1821. We’re just lucky that we at last discovered the last big piece to the investing puzzle in 1981. And it is of course another darn shame that for 35 years most of us have lived in fear of the Buy-and-Holders and failed to develop Shiller’s powerful insight to the fullest possible extent. But there’s obviously nothing we can do to change that now. all that we can change is the future. We all want to be 100 percent sure to do our absolute best not to let another day pass by without getting this all written up on the front page of the New York Times and thereby getting the word out to every living investor and even every living non-investor (economic crises affect all of us).
Would it ever be too late to bring about world peace? Would it ever be too late to learn how to eliminate traffic jams.
I mean no personal offense. But the fact that you could ask this question indicates that you have not been paying close attention during the first 15 years of our discussion, Anonymous. There is a reason why thousands of our fellow community members have asked that you Goons knock off the funny business and permit honest posting. People need to know how stock investing works. Period. End of sentence, end of paragraph, end of chapter, end of section, end of book.
This stuff matters. Big time. It was too late for us all not to decide to stand up to you Goons in the late afternoon of May 13, 2002. It will never be too late for us to do the right thing. We need to continue achieving advances over time or we won’t be seeing that average 6.5 percent long-term return much longer. It is these sorts of advances that make this country work. It is impossible even to imagine how it could ever be too late to do something this wonderful, something that is good stuff piled on top of good stuff piled on top of good stuff with no possible downside whatsoever.
That’s my sincere take re these terribly important matters, in any event.
Rob
For us, as individuals, is there not a point at which it is too late when we take into account our responsibility to be the provider for our family.
Journalism is the work I do, Anonymous. And this is the most important story in the history of personal finance.
$500 million is a whole big bunch of providing. It doesn’t get much better than that.
Bill Gates, maybe. Steve Jobs, maybe. Not too many others.
Rob
“And this is the most important story in the history of personal finance.”
Which means that you are the most important person in the history of personal finance. Of course, you’re too modest to say so yourself. But what else could justify your many years of pain, abuse and deprivation?
Can’t decide though which of these is correct:
a) Rob Bennett is as important as Bill Gates and Steve Jobs.
b) Rob Bennett is MORE important than Bill Gates, Steve Jobs, and gosh darn it, anyone else who ever lived.
“Journalism is the work I do, Anonymous. “.
Given that journalism is your work and you lack any investment training or background and that you also admit you are not a numbers guy, it explains why you have not had any success, lack credibility and are also wrong on the issues given your lack of understanding.
Which means that you are the most important person in the history of personal finance. Of course, you’re too modest to say so yourself. But what else could justify your many years of pain, abuse and deprivation?
Can’t decide though which of these is correct:
a) Rob Bennett is as important as Bill Gates and Steve Jobs.
b) Rob Bennett is MORE important than Bill Gates, Steve Jobs, and gosh darn it, anyone else who ever lived.
I am very proud of the work that I have done, Anonymous. Yes, I have played the lead role in getting the most important advance in the history of personal finance written up on the front page of the New York Times. Telling investors how to reduce stock investing risk by 70 while doing away with economic crises is a very big deal and my name is all over the story.
But this has very much been a community effort. Shiller obviously had to put his neck on the line 35 years ago, no? I couldn’t have gotten to first base without John Walter Russell having been willing to devote eight years of his life to developing these ideas without his getting paid a penny. In every area other than valuations, I just borrow Bogle’s ideas and incorporate them into the Valuation-Informed Indexing model. I gained great popularity at Motley Fool and then used the supporters I had there to help in the fight against you Goons and I wouldn’t have had those supporters had the Garner brothers not built Motley Fool into a pretty darn cool operation in the early days of the internet.
Chapter Two of Bill Bernstein’s book told me that I was right about all this stuff back in the days when you Goons were trying to convince me that the entire issue was that I was forgetting to take my meds. The bloggers that I met at the FinCon events who told me how much they loved my stuff and how much they wished that they had the courage to do what I was doing and how much they wished that I kept on keeping on obviously played a role in helping us all get to the other side of The Big Black Mountain.
How can I even describe how important a role Wade Pfau played? Can you imagine a boy who grew up in Northeast Philadelphia who didn’t even major in Economics co-authoring the most important peer-reviewed research published in his lifetime? What are the odds of that happening? Would I have even believed it had happened after it happened if I didn’t have hundreds of e-mails in my possession in which a fellow with a Ph.D. in economics was giving positive feedback on my explorations of every issue and telling me how my work had changed his life and was going to in days ahead change the lives of millions?
Bill Schultheis played a role. I knew that it was impossible that he was biased against Buy-and-Hold because he is the world’s #1 advocate. That he would be so excited to learn about the advances that I achieved gave me objective feedback of an exceedingly positive nature. How could I possibly have done this without Jacob over at Value Walk? The guy has been there for me to publish over 300 columns exploring the first true research-based model from every possible angle and thereby to learn and learn and learn things that I never would have learned just sitting around thinking about this stuff and not having to meet a weekly deadline to come up with a new column.
Greaney helped me with my Retire Early plan by posting the stuff at his web site on saving. I couldn’t have done this if I had had to work at a corporate job all those years. So he helped. And, ironically as all get out, his SWR study helped too. It was his SWR study that got me excited about his site because I had been thinking that it was important to know the SWR before handing in a resignation from a corporate job and his saying it told me that I was on the right track and that this Retire Early stuff wasn’t as impossible as some people made it out to be.
How about Carl Richards? When he sent me that e-mail telling me that he thought that my work was of “huge value” but that he was banning me from his site because having his readers learn about the last 35 years of peer-reviewed research in this field wasn’t good for business confirmed my suspicions as to what is really behind the Buy-and-Hold phenomenon.
Freakin’ Rob Arnott! Arnott is the guy who gave me the guts to say half of the things that I have said over the past 15 years. Like one community member said, I used to be a “puppy dog poster.” Arnott showed brass balls in the columns he wrote for the Financial Analysts Journal. I used to marvel at his stuff and wonder if I could ever work up the courage to tell it like it is instead of always watering down my insights to make them more acceptable to the people trying to turn a quick buck pushing a very different approach than the one suggested by the past 35 years of peer-reviewed research. How do you think it felt to have Rob come to my web site and tell me that everything that I have been saying for years now is spot on in his assessment? It was like being declared the winner of the World Freakin’ Series, it was like becoming the Chase Utley of InvestoWorld. Is there room for Rob Arnott to get some credit here?
You Goons have helped. I put up a post just yesterday noting how you recently pointed me to two articles that have generated five or six columns. Does that not constitute an assist? You hate me with a burning hate. But somewhere deep in your hearts you want to know how stock investing works and you can’t resist bringing up matters of substance every now and again and helping me and yourselves and millions of your fellow middle-class investors by doing so.
And on and on and on and on, you know? It was millions of us who caused our economic and political crisis and it is going to be millions of us who are going to show the path forward to something a lot better. President Obama said once that “You didn’t build that,” a community did, and, while I agree with my conservative friends that it is possible to exaggerate that insight, I also agree with my liberal friends that there is an important insight being advanced there. I didn’t build Valuation-Informed Indexing by myself. It wouldn’t be what it is today without my efforts. But it wouldn’t be what it is today without the efforts of thousands of others too. Who is to say which of us played the essential role?
And why does it matter anyway? We are living in the years when the biggest advance in the history of personal advance in history is being achieved. I think it makes sense to focus on the amazing good that is being accomplished here and perhaps not worry so much about who gets the credit. I think it would be fair to say that there is plenty of credit to go around. How about saying that the invention of the internet brought this about or that the laws of the United States brought this about (thanks, whoever came up with the idea of making financial fraud a felony!) or how about thanking my long-suffering wife or perhaps the Sisters of Saint Joseph who insisted that I learn how to diagram those darn sentences when there were a few things that I personally believed might be a better use of my time?
We all deserve lots of credit just for getting up each morning and making our way through this Valley of Tears with smiles on our faces. That’s my take, Anonymous. I am not worried about getting enough credit. I have the funny feeling that I will probably at the end of the day end up getting about five times the amount of credit that I deserve. It has been my experience that that’s the way things often play out in this big old goofy world of ours. John Prine once wrote:
I was sittin’ in the bathtub just countin’ my toes
When the radiator broke, water all froze
I was stuck in the ice without any clothes
Naked as the eyes of a clown
I was cryin’ ice cubes, hopin’ I’d croak
When the sun came through the window, the ice all broke
I stood up and laughed, I thought it was a joke
That’s the way that the world goes ’round
Now Dylan suggested in All Along the Watchtower that it is a mistake to conclude that it is all a big joke but I don’t know, Prine makes a pretty darn case in the words quoted above. I am going to hold off on advancing a final statement re this important matter. But I will say that it does at least appear at times to be a big joke. Sometimes the ball just bounces in funny ways and the trick is keeping your head and not getting too rattled just because there are millions of people watching to see if you can get the ball into the infield in two seconds or less.
My sincere take.
Take good care, man.
Rob
If the crash never comes In the next few years and you never get the $500 million, then what?
Given that journalism is your work and you lack any investment training or background and that you also admit you are not a numbers guy, it explains why you have not had any success, lack credibility and are also wrong on the issues given your lack of understanding.
Actually, it explains why I couldn’t be corrupted. Those who devoted their lives to building careers in the investing advice field have families to feed whose lives depend on their remaining on good terms with the Wall Street Con Men. The job of a journalist is to EXPOSE con men. So taking on this sort of abuse is right up the alley of what I was taught one has to do to success in my chosen profession. And the fact that I am a journalist who in an earlier part of his life in journalism studied how to achieve financial freedom early in life gave me another huge edge here. The law degree that I earned so that I could be a more effective journalist didn’t hurt either. And of course I happened to be born at the time when this new communications medium, which provides lots of powerful tools for exposing massive cons, was coming into existence.
We’ve got lots of people with numbers skills. So long as those people are afraid to stand up to the Wall Street Con Men and the members of their various Internet Goon Squads, those numbers skills were being used AGAINST us, not for us. We needing to mix some journalism skills in to get things back on the right track. At a time when an industry has achieved a high level of corruption, possessing the skills needed to rise to the top in a corrupt profession does not get the job done. I possessed the skills needed to get the job done and was humble enough to be able to ask for help from numbers people who were honest enough to feel uneasy with their own corruption and to want to be able to do honest work themselves someday . Good for me (and good for those who are sufficiently uneasy with the corruption in the field in which they work to be willing to help us all out, to be sure).
Rob
If the crash never comes In the next few years and you never get the $500 million, then what?
If we all get hit by a giant meteor tomorrow and the work of thousands of years of civilization is blown to pieces, what then?
I’ll give it my best shot. I can do no more and I can do no less. And I will accept whatever consequences follow from that.
As if I or any of the other vulnerable humans ever had any other choice as to how to proceed in a wonderful and yet dangerous world.
I’ll give it my best shot, Anonymous. And, if I am true to myself, I won’t cry if the umpire makes the wrong call on that weird play at the plate in the bottom of the ninth that we all know is the only way this nail-biter can come to a close. At least not in public.
My best wishes to you, my fellow frightened human.
Rob
“Actually, it explains why I couldn’t be corrupted. ”
So, basically, I could tell an engineer how he should build a bridge because he might cut corners even though I have no formal training in the field.
If you had help from hundreds of engineers who wanted to do honest work but were too afraid to put their own necks on the line to bring the world in which that was possible into existence, sure you could. Honesty trumps formal training every day of the week and twice on Sunday. Formal training brought us an economic crisis that put millions out of work and that is in the process of shaking confidence in our political system to its core. You don’t get to first base without minimal levels of honesty, Anonymous. And it’s not a close call. Skill without honesty is poison.
That’s why we have laws against financial fraud. Bernie Madoff possessed a high degree of technical skills. We all need protection from the Bernie Madoffs and the John Bogles of this world.
Rob
“I’ll give it my best shot, Anonymous. And, if I am true to myself, I won’t cry if the umpire makes the wrong call on that weird play at the plate in the bottom of the ninth that we all know is the only way this nail-biter can come to a close. At least not in public.”
I think we are way past that point. Besides, I thought you were going to move on to the political boards.
It is my expectation that by the end of 2017 I will be seeking to have some articles published at some political or general interest sorts of web sites. The Buy-and-Hold Crisis doesn’t just affect investors. It affects all of us because the economic crises that Buy-and-Hold brings on do great damage to our economic and political systems. I think it makes sense to make some moves in that direction at this time.
I don’t see it so much as a “moving on” and an “adding to.” Showing that the Buy-and-Hold Crisis affects all of us does not mean saying that it should not be of big concern to investors. The Buy-and-Hold Lies have obviously hurt millions of investors in a very direct and particular way.
Rob
“It is my expectation that by the end of 2017 I will be seeking”
If you back-pedaled any faster your chain would break. Last fall the political site angle was your next big thing.
“I am very proud of the work that I have done (followed by the rest of your Nobel Prize acceptance speech)”
I realize this is a hopeless request, but I’ll try anyway. John Bogle is widely acknowledged as being important in the area of personal finance. I’m simply asking for your own personal opinion. Yes or No: Are you more important than John Bogle?
“I realize this is a hopeless request, but I’ll try anyway. John Bogle is widely acknowledged as being important in the area of personal finance. I’m simply asking for your own personal opinion. Yes or No: Are you more important than John Bogle?”
Adding a question to this other person’s question:
Is there anyone else in the investment world that would say you are as important or more important than Jack Bogle?
I would rate Bogle and myself as roughly equal in importance. I obviously could not have developed the Valuation-Informed Indexing concept without the years of important contributions from Bogle that I use to support every aspect of the model other than the valuations-related aspects. But Buy-and-Hold without the valuations-related aspects is an unmitigated disaster; it has caused the biggest economic crisis in U.S. history. So what good is Bogle’s stuff without the elements that I have added over the first 15 years of The Debate About Having a Debate? Just as I am nothing without Bogle, Bogle is nothing without me.
The issue here is that both Buy-and-Hold and Valuation-Informed Indexing are numbers-based strategies. When you root your strategy in numbers, it is important to get the numbers right. Numbers-based models have more power than other models because people trust numbers in way that they do not trust subjective opinions. But what if you get the numbers wrong? And what if the thing you get wrong is 80 percent of the story? When you leave out valuations, you don’t just get little things wrong. You get all of the most important questions WILDLY wrong.
I don’t ever want to try to diminish Bogle’s contributions. He laid the groundwork for the VII strategy. So for me to diminish Bogle is for me to diminish myself, which makes no sense. But I don’t feel comfortable lying to people about what the peer-reviewed research says re the numbers they use to plan their retirements and Bogle lies about that issue on a daily basis. So, yes, my correction of Bogle’s lies is a very, very big deal.
The best way to think about it is that Bennett’s work makes Bogle’s work honest and real. Bogle did work of huge importance but like all of those darned humans he is capable of making a mistake and he made a doozy. To unleash the power of all of the genuinely amazing work that Bogle has done, someone had to come along who absolutely refused to lie about the safe withdrawal rate issue and about scores of other critically important investment-related topics. I am that someone.
My work COMPLETES Bogle’s work. Valuation-Informed Indexing is the investing strategy that Bogle would have gotten behind if only he knew what Shiller showed us in 1981 back when he first started talking about stock investing. Bogle was ignorant of how investing works in his early years because the entire world was ignorant of how investing works in Bogle’s early days. Nothing Bogle has done counts for anything until he corrects the error he made.
But Bogle is deeply ashamed of having destroyed millions of lives and of having caused an economic crisis. He is deep in cognitive dissonance. I am in the process of building a national movement of people who will DEMAND that honest posting re the last 35 years of peer-reviewed research be permitted on the internet. That movement will force Bogle to give up his cognitive dissonance and give meaning to all the good work he has been doing for decades.
Bogle doesn’t work without Bennett and Bennett could never have dreamed of doing what he has done without Bogle. You can’t have one without the other. The two have made contributions of equal importance.
Fair enough?
Rob
Is there anyone else in the investment world that would say you are as important or more important than Jack Bogle?
Every person alive will say it once your prison sentence has been announced, Anonymous. What possible motive could anyone have for denying such an obvious truth other than a desire to block the truth form coming out because of a fear that the truth coming out will lead to a prison sentence. Once your prison sentence has been announced, that’s not an issue. The announcement of your prison sentence is the entire ball of wax at this point.
No?
Rob
Delusional.
Nothing more to be said.
Thank you for your honest reply.
But since you don’t want to diminish Bogle’s contributions, it’s only fair to mention this minor footnote – he created Vanguard. So there’s that little point in his favor.
Why throw in the prison story? Everyone thinks you are a bit nutty when you make claims of your importance and getting $500 million. The prison stuff just makes you look like an insane lunatic.
Delusional.
Nothing more to be said
Yeah, yeah.
Rob
Thank you for your honest reply.
But since you don’t want to diminish Bogle’s contributions, it’s only fair to mention this minor footnote – he created Vanguard. So there’s that little point in his favor.
Bogle is a giant. You don’t have to persuade me. It was by reading Bogle’s book that I became persuaded that Greaney’s study got the SWR wrong. So it really is Bogle that got this whole thing started. And I of course mean to suggest that as a positive, not a negative.
Rob
Why throw in the prison story? Everyone thinks you are a bit nutty when you make claims of your importance and getting $500 million. The prison stuff just makes you look like an insane lunatic.
I mention the prison thing because I see it as a critical element of the story at this point in the proceedings.
I believe that, if Greaney had it to do over, he would play it differently. I don’t believe that he would say he agrees with me. But he would look for some less aggressive way to express his disagreement than threatening to kill my wife and children. And Bogle would play things differently if he had to do it over and Lindauer would play things differently and all of you Goons would play things differently.
For a long time I thought that would ultimately prove to be the answer — the Buy-and-Holders would eventually come to conclude that they should take a softer line and then everything would work out fine. Those who had an interest in Valuation-Informed Indexing would be permitted to learn what they wanted to learn and those who preferred Buy-and-Hold would tune out what those interested in Valuation-Informed Indexing were saying amongst themselves.
I stopped believing that that could ever happen when you Goons threatened to destroy Wade Pfau’s career if he continued doing honest research. That’s so far over the line that it is not possible for me even to describe how far over the line it is. When that happened, I was forced to try to think through what possible motivation could account for such behavior.
The only thing that I could come up with is, that since your Campaign of Terror had already caused an economic crisis, you Goons had come to the conclusion that you could never agree to any compromise whatsoever, that things had already gone so far that you would be going to prison if even a single web site ever permitted honest posting and so you might as well just do completely crazy stuff on the “in for a dime, in for a dollar” theory. So there is no longer any possibility of things being worked out in a positive manner.
Only the announcement of prison sentences can end the nasty side of this. When prison sentences are announced, all of the many people who long to do honest work in this field but worry what you Goons will do to their careers if they “cross” you will be freed to help the rest of us out once they hear about your prison sentences. The announcement of prison sentences brings all the ugly side of these discussions to an end and thereby permits all of the wonderful stuff to blossom.
Does all of that not make good sense?
Rob
“I would rate Bogle and me as roughly equal in importance. . . Just as I am nothing without Bogle, Bogle is nothing without me.”
Bogle invented the S&P 500 index fund, now the world’s largest mutual fund. He founded Vanguard, the world’s largest mutual fund group, with over $3 trillion under management. He was named one of the investment industry’s “Giants of the 20th Century” by Fortune magazine. He was named one of the “world’s 100 most powerful and influential people” by Time magazine.
Which of those things could he not have done without you?
Bogle has been the primary advocate of Buy-and-Hold, the investing strategy that caused an economic crisis that is well on its way to becoming the worst in U.S. history, an economic crisis that in recent years has caused a loss in confidence in the U.S. political system on both the left and the right. Which of the accomplishments that you list do you think will be mentioned in future days if the U.S. economic system or the U.S. political system collapses because of Bogle’s unwillingness to acknowledge a mistake that was discovered through the publication of peer-reviewed research by a Nobel-prize winning economist 35 years ago?
Coming at it from the other direction, how much greater will those accomplishments look in days to come if the world’s future historians are able to say that Bogle came clean re his mistake in the year 2107, causing all of the investing textbooks to be rewritten and bringing on the biggest surge in economic growth ever seen in our country’s history?
Bogle has done great things, we have no dispute re that one. But Bogle absolutely has a responsibility to acknowledge mistakes that he has made when they are discovered by the publication of peer-reviewed research. He does great harm to his reputation when those mistakes are not corrected and he greatly enhances his reputation when he incorporates the new findings into the good aspects of the model he used at an earlier time to build his reputation.
Bogle’s true friends want to see him come clean. It is only “yes men” who are advising Bogle to continue his association with the Lindaurheads and the Greaney Goons. The individuals who have posted in “defense” of Mel Lindauer and John Greaney are like the “friends” of Richard Nixon who told him to stonewall and stonewall some more and then stonewall even some more and thereby took a giant in the field of politics to the point of resigning his presidency in disgrace. Even the powerful and wealthy have to obey the laws of the nation in which they reside if they are to maintain the confidence of the people who live in that country and who respect the laws of that country in their own lives.
I am 100 percent sure, Anonymous.
Rob