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:
Again, you avoid the main point that you refuse to work a job. There you are hiding behind your VII lies.
I think it would be fair to say that you are too angry to listen to any words relating to investing with an even partially open mind, Sammy. I will try to provide some context for the benefit of any who are reading these words and who are a bit more open to understanding what is going on here.
John Greaney has a Buy-and-Hold retirement study at his web site. He employed the same methodology as is used in all Buy-and-Hold retirement studies — that is, he did not include an adjustment for the valuation level that applies on the day the retirement begins. So he got all the numbers wrong. In 2000, the safe withdrawal rate was 1.6 percent real. He said that it was 4 percent real. People who relied on that study to plan their retirements have been hurt in very serious ways. The odds of a retirement which began in 2000 and that employed a 4 percent withdrawal surviving for 30 years are 30 percent.
How do we solve that problem? How do we get accurate retirement information out to the millions of middle-class people who need it?
The Buy-and-Holders need to acknowledge that they made a mistake in thinking that the market was efficient. Shiller showed that they are wrong in research published in 1981. If they cannot bear to acknowledge that (there is strong evidence that the Buy-and-Holders are suffering from cognitive dissonance), then at the very least they need to let people know that their retirement studies are not the final word on the subject, that there are Valuation-Informed Indexing retirement studies that report very different numbers. If you leave it to the reader to decide which sort of study to use, you are covered. If you fail to let your readers know the other side of the story, I think it would be fair to say that you are going to find yourself in very serious trouble following the next price crash.
I have spoken to university professors who want to tell the truth re stock investing and who are afraid to do so today. It’s the same with personal finance bloggers. It’s the same with economists. It’s the same with policymakers. It’s the same with investing advisors. And on and on and on.
We are caught in a trap. We didn’t always have Shiller’s research available to us. So we made some mistakes. Those mistakes hurt people. We didn’t correct them when we first leaned about them because we thought they wouldn’t cause too much harm. But then the wrong ideas that we put in people’s heads caused the bull market to go completely out of control and we caused more harm than anyone once imagined possible. Now we are trying to dig ourselves out.
I’m trying to do my part, that’s all. I cannot take you back in time to a place where you could make different decisions and feel better about yourself. I can make the case for how lots of good and smart people once really thought the market was efficient. At some point, we need to move on. At the very bare minimum, we need to make it a practice to tell both sides of the story. Reasonable people need to absolutely insist on that much.
I wish you the best of luck in all your future life endeavors.