Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“If you had asked Buy-and-Holders in 2000 what the annualized real return would be for the next 18 years, not 1 in 100 would have said “2.25 percent.” Stocks have not been performing in the manner in which Buy-and-Holders say they should always perform for a long, long time now.”
I don’t know of anyone that only made their investment in 2000 and then immediately withdrew all their money after a crash. Buy and holders invest all the time and then withdraw money over a long period of time. To date, there has NEVER been a 30 year period in which a 4% withdrawal rate failed.
I agree that Buy-and-Holders invest all the time and then withdraw money over a long period of time. The question that has been on the table for 15 years now is — Is it better to take the price at which stocks are selling into consideration when doing that or is it better to ignore price? I believe that it is better to take price into consideration.
I obviously agree that there has never been a 30-year period in which a 4 percent withdrawal rate failed. The question that has been on the table for 15 years now is — What were the odds that retirements calling for a 4 percent withdrawal rate that began in January 2000 would survive 30 years? The historical data shows that those retirements had only a 30 percent chance of surviving 30 years. Those were high-risk retirements, not safe retirements. Why not tell people that?
It all comes down to whether the market is efficient or whether valuations affect long-term returns. A belief that the market is efficient takes you down one road and a belief that valuations affect long-term returns takes you down a very different road. I believe that valuations affect long-term returns. Is that okay by you, Anonymous? Should I have to ask “pretty please” before posting my sincere views on stock investing because you happen to hold different beliefs?
If so, why? Why do you get to dictate what people say about stock investing on the internet? People post their honest views on hundreds of different subjects on the internet every day and there is no big fuss made about it. Why is stock investing the one big exception? Why do you feel so strongly that everybody has to either believe in Buy-and-Hold or at least pretend to believe or at least keep his or her mouth shut? It is my belief that Buy-and-Hold is DANGEROUS. Is there some reason why I shouldn’t tell my friends that given that that is my sincere belief and given that this is a research-based belief and given that the consequences of getting this stuff wrong can be pretty darn dire (especially for those opting for early retirement)?
Rob
“Why do you get to dictate what people say about stock investing on the internet?”
The question is why do you think you should have this right? Why do you think you should be able to post what you want, where you want and when you want? Just as you decide what you will allow on your website, others have the same right to allow what they want. Every website owner controls their own content.
You are stating the general rule. But there are limits to the general rule. When you cross the line into committing financial fraud, you have gone too far.
Bernie Madoff went to prison because he created phony transaction statements that led the owners of shares in his fund to believing that the fund had purchased certain companies at certain prices and then sold those companies at better prices. Madoff could not say: “Oh, there’s no law against writing the names of companies and then dollar signs and numbers on pieces of paper and then mailing those pieces of paper to thousands of people.” No, there’s no law against doing that. But there is a law against financial fraud and Madoff’s clear purpose was to trick the owners of his fund into thinking that the transactions described on these pieces of paper had really taken place. Madoff is in prison today. Properly so.
So it is with John Greaney and with those who have posted in “defense” of him. Website owners control their own content. But to cover up an error that one has made in a retirement study is an act of financial fraud. If a site owner bans people from his site solely because those people have posted honestly on safe withdrawal rate, that is fraud. That gets you put into prison.
It is ultimately juries who have to decide which people who committed the crime in an objective sense go to prison and which do not. Wade Pfau presents a sympathetic case because he put his career on the line trying to get the authors of the Trinity study to correct their study. Wade ULTIMATELY committed financial fraud. But he obviously did so with his feet dragging. Wade obviously WANTED to do honest work. So, if I were sitting on his jury, I would let him off. I think that the men and women who are appointed to sit on his jury will also let him off. But I cannot decide the matter for them. The jury members get to make that decision. I trust our system to produce good results. So I just have to leave it to the jury to do good work.
Under no circumstances do I want to commit financial fraud myself. First of all, I do not want to leave it to a jury to decide whether I go to prison or not. I believe that a jury would be sympathetic to my case if I agreed to say that Greaney’s study contains a valuation adjustment. But why should I have my life riding on what a jury decides? It seems better to me for me just to not commit the crime in the first place. That’s why I told Wade that I thought that he was “insane” to flip to the Goon/Criminal side of this matter.
Second, I don’t want there to be more Wade Pfau’s in the future. Or more Mel Linduaer’s. Or more John Greaney’s. Or more Jack Bogle’s. I want us all to feel free to post honestly re these critically important matters at every discussion board and blog on the internet. Why even train people to become academic researchers in this field if we are not going to permit them to post honestly? We need the Wade Pfau’s of this world doing honest work. Every last one of us needs that. It’s a win/win/win/win/win.
If I commit financial fraud myself, I am making the situation worse rather than better. Each time another person with a desire to do honest work flips to the Goon side out of a fear of the intimidation tactics being used against them, it scares others who are on the edge and trying to work up the courage to post honestly. It takes us down, down, down. It’s because people were afraid to speak back to Bogle back in 1981 that Greaney ended up in the place where he is today. Greaney is a friend of mine. So I very much wish that someone had had the courage to stand up to Bogle back in 1981, So I sure don’t want to make the same mistake by failing to stand up to Greaney in 2017. Selling out my fellow community members would just create more Greaney’s down the line. I want there to be fewer prison sentences and shorter prison sentences, not more, longer prison sentences.
Does all of that not sound at least roughly right to your ears, Anonymous? Do you not think it is better to have shorter prison sentences and fewer of them? In my mind, this is not even a close call. In my mind, there should be no controversy over this one. I only wish that Bogle had come clean back in 1981, and that, if he failed to do so because he was suffering from cognitive dissonance (which is a real phenomenon), that his friends had all encouraged him to come at least partially clean by saying that there was at least a chance that he had made a mistake and that he thus encouraged everyone to post honestly re these matters.
Rob
“If a site owner bans people from his site solely because those people have posted honestly on safe withdrawal rate, that is fraud. That gets you put into prison.”
A site owner can ban anyone, for any reason. Except for you, no one has ever suggested otherwise. You cannot link to a single example of anyone who was ever subjected to the slightest punishment (let alone prison) for banning someone. And yet for your scenario to make any sense, you have to make this wild leap from the zero punishment reality to a mass imprisonment fantasy.
Kind of a tough sell, isn’t it?
funny to how you see it as fraud when you are blocked, but not the other way around.
funny to how you see it as fraud when you are blocked, but not the other way around.
I didn’t get an important number wrong in a retirement study posted at my web site, Anonymous.
That was the other fellow.
I mean, come on.
Rob
You cannot link to a single example of anyone who was ever subjected to the slightest punishment (let alone prison) for banning someone.
If you spend a few minutes searching on Google, you will find lots of cases in which someone was held liable for internet harassment. The law is not as developed in this area as it is in many other areas because the internet is a relatively new thing. But the caselaw relating to the internet is certainly in the process of being developed and generally not in a good way for you Goons.
this wild leap from the zero punishment reality to a mass imprisonment fantasy.
This is the BIGGEST case of internet harassment yet seen in history, that much is certainly so. This is the first case in which MILLIONS of lives were destroyed as a result of the harassment campaign. That’s all the more reason to be certain it is prosecuted, no? As a people we do not want to see millions of lives destroyed because some internet Goon is embarrassed for people to learn that he got an important number wrong in a retirement study posted to his web site.
If we want this internet thing to do some good in the world, we need to be sure to see cases like this prosecuted. That is how we change the world for the better. Or at least so it seems to Old Farmer Hocus. I would like to see some good come of this, Anonymous. Call me madcap. We have seen thousands of good people express a desire that we all be permitted to use the internet for the purposes for which it was created. Let’s do it, you know? We are not going to get there by worrying what you Goons might say about us if we post our sincere views. We are all going to have to work up a little backbone to get from the horrible place where we reside today to the wonderful place where deep in our hearts we all (including you Goons!) want to be tomorrow.
Everything good that ever happened in the world was achieved through the playing out of a process. THIS IS THE PROCESS. I wish it was a prettier picture, you know? It is what it is. This is the process that we are stuck with in this particular case. We can move forward and help millions learn what it takes to retire early or we can let the poison that you Goons have injected into the bloodstreams of our communities kill us all. I vote for moving forward. No apologies.
I don’t know about the mass imprisonment thing. My guess as to how this will go down is that there will be proposals for enactment of an amnesty following the next price crash. I don’t believe that everyone will be covered by the amnesty. But I believe that most of those who are at risk will be. That’s something that we will need to work out together as a community of people. I personally do not envision mass imprisonments. But I do expect to see imprisonment of the worst cases. We will have to wait to see how it all plays out to find out for sure.
My best wishes, Goon friend.
Rob
Do I really need to tell you that banning is not the same as harassment? Good Lord.
You’re basically arguing that turning your back on someone is the same as punching them in the nose. Your mind is in an alternate reality, which makes the real world all the more disappointing for you.
It will be interesting to see how it all plays out, Anonymous.
Is there anything that I can do for you in the interim?
Rob
Yes, actually there is.
Stop posting insane bullshit.
Thanks for asking.
Okay — it turns out that Greaney DID include a valuation adjustment in the retirement study posted at his web site.
Take good care, man.
Rob
“I didn’t get an important number wrong in a retirement study posted at my web site, Anonymous.”
You have an opinion on this topic and others have a different opinion. Having a differing opinion does not constitute a felony. Further, you were banned because of your poor behavior. People grew tired on your long winded ranting filling up every thread as well as your hijacking of topics.
I guess we will have to wait and see what your jury says re the matter.
I wish you the best of luck with it in any event.
Rob
“I guess we will have to wait and see what your jury says re the matter.”
What jury? It is just something you invented.
There isn’t a jury sitting on the case today, Anonymous.
Do I believe that there will be a jury sitting on the case in days to come? I sure do. Do I believe that that’s a good thing? I sure don’t.
If Bogle had owned up to what Shiller showed back in 1981, when Shiller’s “revolutionary” research was published, you wouldn’t be on your way to a prison cell. No one else would be either.
So Bogle hurt lots of people by not coming clean immediately. And lots of other people hurt lots of people by not encouraging Bogle to come clean.
There’s an old saying that the definition of insanity is doing the same thing over and over again expecting different results. Bogle’s approach of putting his head in the sand re Shiller’s findings has been an unmitigated disaster for 36 years now. I love my country. So I don’t intend to follow that approach.
I believe that you are going to prison. That makes me sad. Shiller’s findings are an amazing advance. They help each and every one of us. No one should be going to prison. So why is it that a good number of us are likely to land in prison cells in the days following the next crash?
It’s because of this stupid idea of pretending that Shiller did not discredit the Buy-and-Hold strategy with publication of his 1981 research.
I am not playing the stupid game. I am happy to help reduce your prison sentence if I am able to do so. But I am not interested in doing anything to lengthen your prison sentence or to add to the number of people who will be going to prison following the crash. So I am not playing the stupid game.
I didn’t “invent” anything. Shiller published peer-reviewed research discrediting the Buy-and-Hold strategy. Bogle ignored it. So Greaney went ahead and posted a retirement study that included no valuation adjustment, having noticed that the Wall Street Con Men had been doing this sort of thing for years and getting away with it. I want no part of it.
I have no power to send you to prison. I won’t be sitting on your jury. You have nothing to worry about from me. I will testify honestly. That’s as far as it goes for me.
Financial fraud is a felony under the laws of the United States. I didn’t “invent” that reality. Bernie Madoff is sitting in prison today for the crime of financial fraud.
No one talked about Bernie Mafoff going to prison until his fund collapsed. Madoff would have been better off if they had. If his friends had warned him that his financial fraud would be exposed in time, he might have come clean and ended up with a shorter prison sentence.
I think you are going to end up in prison after the U.S. economy collapses as a result of your massive act of financial fraud. I am happy to do anything in my power to get your prison sentence reduced a bit. But I will not say that the retirement study posted at John Greaney’s web site contains a valuation adjustment. Thousands of people have looked at it and not one has been able to find a valuations adjustment. I have a funny feeling that I know why.
We’ll see how it goes. Your jury will look at what you have done and decide on the length of your prison sentence. That’s how our system works.
I wish you the best of luck with it in any event. I’ll have a beer with you when you get out and we can laugh at old times, okay?
Rob
“Do I believe that there will be a jury sitting on the case in days to come? I sure do.”
You can believe in pots of gold at the end of rainbows, pink unicorns dancing in the meadows and green men from mars. It doesn’t mean that any of it is true.
That’s so.
I am telling you what I believe. I believed on the morning of May 13, 2002, that Greaney’s attacks on me would be tolerated by the Retire Early community for perhaps two days, three days tops. I was wrong, you know? It happens.
I believe that you will be going to prison following the next price crash, Anonymous. But, yes, I acknowledge that me saying it does not make it so. We will just have to wait to see how things play out.
I hope that works for you.
Rob
“I am telling you what I believe. ”
The problem is that your comments on prison, and many other topics, are so far off from being the least bit plausible. It just provides further justification in discrediting what you say and provides support to those that decided to ban you.
Okay, Anonymous.
Perhaps there will be some who will find the entire story more plausible in the days following the next price crash. People might at that time find it hard to believe that 50 percent of the money that they were expecting to use to finance their retirement has gone “poof!” and thus be more open to explanations that in other circumstances would not seem plausible. I certainly agree that it is an amazing story. If you had asked me on the morning of May 13, 2002, to put odds on the story that we have seen play out before our eyes playing out, I would have put them at one million to one. So I guess I can understand a measure of skepticism.
I still want to play it straight, though, no matter how hard it is to persuade people of the truth of the story. I am not even able to consider any other possibilities. This stuff is just too darn important. We will have to see what happens.
Don’t let the bad guys get you down, my good friend.
Rob
Here is some “research” for you. It looks like a drop of 50% or more is not that common after large market increases:
https://www.bogleheads.org/forum/viewtopic.php?f=10&t=231374
Maybe you should go post over there and tell them how their research is all wrong.
I wish that I could post over there, Anonymous.
That’s how it is supposed to work. People who hold one belief post in support of that belief. And then people of another belief post in support of their belief. The people holding Belief A learn from the people holding Belief B. Everybody is better off as a result. Some people change their minds over time. Most do not. But people from both sides maintain friendships with people from the other side because they are grateful to have their ideas challenged in civil and reasoned discussions.
That’s what the published rules of all our boards calls for. That’s what works.
My sincere take.
Rob
There are thousands of people on the various financial boards that are not buy and holders, yet they aren’t banned like you are. Why is that?
They self-censor themselves, Anonymous. They put forward posts indicating that they hold some doubts re Buy-and-Hold. Yes, I acknowledge that that is tolerated by the Buy-and-Holders. But they pull their punches. They don’t share with their fellow community members the full extent of their concerns re Buy-and-Hold. They walk on their tip-toes. They let things slide that they shouldn’t let slide. They keep it zipped re the most sensitive issues. They don’t argue their points as forcefully as they are capable of arguing them.
I don’t play that game. I post with FULL honesty. I believe that this stuff is too important for me to do otherwise. I play to win. I love my Buy-and-Hold friends. I show them respect and affection and gratitude for the many things I have learned from them. But I do not hesitate to go into intellectual battle with them when they say something that I think could be dangerous to my fellow community members in the event that the point were to remain unchallenged.
It is my job to argue my points as forcefully as I possibly can argue them. I certainly do not want my Buy-and-Hold friends to do anything less. They believe in Buy-and-Hold and so they have a responsibility to argue forcefully for it, just as I have a responsibility to argue for Valuation-Informed Indexing. There is not one case that I can recall where a Buy-and-Holder pulled his or her punches. The Buy-and-Holders fight (intellectually) all out all the time. They are right to do so. They need to do that for the boards to work.
But it is a very, very, very small number of the Valuation-Informed Indexers who do the same. I try hard to argue my points as forcefully as I see the Buy-and-Holders arguing theirs because I don’t think that the boards can achieve their purpose unless we ALL feel free to say exactly what we believe. I want to set an example for other Valuation-Informed Indexers. I want them to look at me and say “that fellow is saying what he truly believes, maybe I can get away with doing the same” and then follow suit. I want to make all the posters who believe that Buy-and-Hold is dangerous to feel as welcome in our board and blog communities as do the Buy-and-Holders.
The root problem is that 90 percent of the population believes in some form of Buy-and-Hold today while only 10 percent believes in some form of Valuation-Informed Indexing. Believing in Valuation-Informed Indexing at our boards and blogs is like being the first black or the first woman ever hired at a big corporation. You have this feeling that, if you make one mistake, you will be crushed for it. So you become highly reluctant to say anything even the tiniest bit controversial. You avoid not only actual mistakes but even statements that are 100 percent accurate but that will be perceived as mistakes by the 90 percent on the other side of the table.
Anyone who compares what I said on the morning of May 13, 2002, with what Wade Pfau said in his Ask Me Anything session on Reddit this week will gain a good sense of the nature and extent of the problem. I didn’t say that the Buy-and-Hold retirement studies were in error in my famous post. All that I did was ask a question. I asked “Should we be giving consideration to valuations when calculating the safe withdrawal rate?” That post was like a nuclear bomb. We are still feeling the reverberations from that one today. But Wade’s life was not threatened when he made a much stronger statement in his Reddit session. He said flatly that he does not believe that the safe withdrawal rate is always 4 percent. I implied that, Wade said it plainly. But my post generated 50 times more flak.
Why? Because no one had ever said such a thing before when I said it. It came as a shock when I said it 15 years ago. Enough people have said it by now that there were no expressions of shock when Wade said it. I am highly confident that there were lots of people listening in when Wade spoke who did not agree with what he said. But things have reached a point where saying something that was a complete and total heresy in 2002 has become sort of ho-hum today. So Wade “got away” with it.
I am happy that Wade got away with saying that the Buy-and-Hold studies are in error (that’s my word, not his, but that is what he is saying, he is saying that 4 percent is not always safe). But I want Wade and lots and lots of other people to feel free to give expression to lots and lots of other implications of the last 36 years of peer-reviewed research in this field. I want to see people saying things that have never been said before at every investing discussion board and blog on the internet on a daily basis. I want to see more and more and more and more of it.
If we all feel free to post honestly, there will be some things said that will ultimately be revealed to be wrong. You know what? That’s a good thing. We should all want false claims to be revealed to be false. By permitting honest posting, we will encourage the posting of both more true statements and more false statements. Both types help us all. The true statements teach us things we would never have learned had we not permitted the posting of those statements. And the false statements confirm our confidence in our current beliefs when they are exposed as false. It’s all good so long as posters from both “sides” follow the published rules of the various boards and blogs.
My post of May 13, 2002, asking whether we should be giving consideration to valuations when calculating the safe withdrawal rate should not have come as a shock to anyone. It came as a shock to lots of smart people because as a community we had fallen into the bad practice of thinking that we knew it all and had nothing new to learn about the subject of stock investing. My question was a good one and I did a good thing by posting it. Wade Pfau ,might well not be questioning the accuracy of the Buy-and-Hold retirement studies today had I not worked up the courage to advance that post. Wade learned much of what he knows about safe withdrawal rates from me and from the hundreds of other brave posters who informed me by posting honestly themselves in the years from May 2002 until the time when Wade saw the first post of mine that he saw at the Bogleheads Forum.
Those who believe that the last 36 years of peer-reviewed research in this field is legitimate research should not have to risk being made to run a gauntlet as punishment for the “crime” of posting their sincere views on stock investing. We should ENCOURAGE all posters to post honestly, both the Buy-and-Holders and the Valuation-Informed Indexers. I was banned because I was not willing to accept the second-class status to which you Goons (not all Buy-and-Holders, but a significant percentage of them, perhaps 10 percent and a highly influential 10 percent) would like to assign any community members who holds views not in accord with your own.
I offer no apologies for posting honestly, I am proud that I do so. I do not respond to acts of intimidation aimed at shutting me up. If anything, acts of intimidation make me more convinced that Buy-and-Hold needs to be effectively challenged at every board and blog on the internet. When we see death threats being posted by a small percentage of the Buy-and-Hold community and the much larger percentage of the Buy-and-Hold community keeping their mouths shut re the violation of U.S. law, we have a serious, serious, serious problem on our hands.
I call that sort of thing out every time I see it. So you Goons see me as a greater threat than any of the other community members who do not share your views on investing. I wear your hatred of me as a badge of honor. I am banned at every board and blog on the internet where a large number of Buy-and-Holders congregate because I won’t tolerate the b.s. of the lowest of the low among us. Good for me, you know?
I am your best friend. Anonymous. I hold you to minimal standards of human decency. Had all the others who disagree with you on investing held you to those same standards all along, you wouldn’t be today on a path that will land you in a prison cell in the days following the next crash. Those people let you down with their cowardice. I tried to lift you up. Your hate has been stronger than my love for 15 years running now. But I believe with my entire heart, mind and soul that my love (and the love of all the community members who adopted the rules that govern posting at all of our boards and blogs — and that’s all of us!) will triumph in the end. We will of course have to wait to see how things play out following the next crash to know for sure.
I wish you all the best that this life has to offer a person in any event, my long-time abusive, Buy-and-Hold-believing friend.
Rob