Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Rob your opinion: https://www.youtube.com/watch?v=KF1RodFhFwc
Rock star stuff, John.
This sort of presentation is the reason why I love Bogle so much. When I was trying to figure this stuff out, he was the only guy I discovered who talked in a real and straight-talk fashion like this. I personally rank Bogle second only to Shiller in terms of the help he provides investors. And I wouldn’t argue too much with someone who put Bogle first. None of the work that I have done over the past 15 years would have been possible without Bogle’s enormous contributions.
Rob
Anonymous says
“I personally rank Bogle second only to Shiller in terms of the help he provides investors. And I wouldn’t argue too much with someone who put Bogle first. ”
And where would you rank compared to Shiller, Bogle and others, like Bernstein, Swedroe, Lindauer and Greaney?
Rob says
I’m playing an essential role, Anonymous.
Bogle’s work is amazing. But Bogle’s work has negative value until you add in Shiller’s work. Bogle got lots of things right. But he got the most important thing — valuations — wrong. Shiller got that one right. So you need to mix in Shiller’s work on valuations to get Bogle’s work to a place where it has positive value. With Shiller work added in, Bogle contibution becomes a huge positive.
Shiller’s work has done little good in the world so far because the implications of it have never been widely discussed. My aim is to open every investing site on the internet to honest posting on the far-reaching implications of Shiller’s work. That’s huge. Shiller’s work was a huge positive in a theoretical sense. But theory by itself has little value in the real world. My work gives Shiller’s work practical value. I couldn’t have done my work without having what Shiller did before me to build on. But Shiller’s work cannot do much good in the world until I am able to open every investing site on the internet to honest posting re the last 36 years of peer-reviewed research.
Greaney’s big contribution in my assessment is that he showed clearly why the safe withdrawal rate is not 7 percent, as Peter Lynch maintained, but 4 percent when valuations are not considered. Greaney got the numbers wrong because he did not consider valuations but he did advance the ball in a big way by showing what the safe withdrawal rate is when valuations are not considered.
I am not able to speak too much about Lindauer. My sense is that he did a lot to build the Bogleheads Forum into the biggest investing board on the internet. That’s a pretty big deal. There are lots of smart people engaging in lots of interesting conversations there. He obviously did a lot to popularize the Buy-and-Hold concept as well.
Chapter 2 of Bernstein’s 4 Pillars book is the best concise statment of the case for Valuation-Informed Indexing that I have seen. On a word-for-word basis I rank Chapter 2 of 4 Pillars ahead of Irrational Exuberance, which I rank as the best investing book of all time.
I am not super familiar with Swedroe’s work. I saw some fine articles by him during my time at Bogleheads. But he always seemed to pull back from pushing the ball too much forward for fear that he would upset his Buy-and-Hold friends. I think he is capable of more than we have seen from him thus far and that we will see more from him in the days following the crash, when he will feel more free to speak his mind freely.
I hope that helps a small bit.
Rob
Anonymous says
So I guess you put yourself at #3 or 4.
Rob says
I’d say that different people play different roles and that each person who plays a positive role is helping us all. So we want every single person who is playing a positive role to participate to the greatest extent possible in all of our discussions of how stock investing works.
I see it as a win/win/win/win/win, with zero possibility of any downside.
Rob
Anonymous says
Just a couple days ago you said “my job is one of the most important jobs in the United States, perhaps the biggest of all.”
So how could you possibly be anything other than #1? And how could those other guys possibly disagree with that assessment? Yet I suspect if you polled them, the results would range from “nutcase” (Greaney) to “Rob who?” (everyone else.)
Rob says
I think my work is the most important work being done in the United States today, Anonymous. I stand by that one 100 percent.
I couldn’t have done any of the work that I have done without Bogle first having done the work that he has done or without Shiller first having done the work that he has done. So who is more important? I don’t see why it matters to identify someone as #1 and someone else as #2 and so on. Who cares?
There are millions of middle-class people who need accurate, research-based investing strategies so that they can retire in a reasonable amount of time. Bogle has made huge contributions. Shiller has made huge contributions. Bennett has made huge contributions. Does that cover it?
There wouldn’t be one person saying “Rob who?” but for you Goons. If you had not engaged in criminal behavior, I would be working today with Bogle and Shiller and Bernstein and Pfau and Swedroe and lots of others to get the word out re what works to millions of middle-class investors. You should be focused on that part of the story — your prison sentence. If you had a Normal brain instead of a Goon brain, 100 percent of your efforts would be aimed at making sure that every site on the internet is opened up to honest posting by the close of business today so that the number of middle-class investors whose lives are destroyed by you is the smallest number it can possibly be given where things stand today and so the length of your prison sentence is the smallest it can be given where things stand today.
That’s my sincere take re these terribly important matters, in any event.
I naturally wish you the best of luck in all your future life endeavors.
Rob
Anonymous says
“If you had a Normal brain instead of a Goon brain, 100 percent of your efforts would be aimed at making sure that every site on the internet is opened up to honest posting by the close of business today so that the number of middle-class investors whose lives are destroyed by you is the smallest number it can possibly be given where things stand today and so the length of your prison sentence is the smallest it can be.”
We are not normal if we don’t spend 100% of our time trying to convince people that you should be able to post what you want, where you want and when you want? Did I get that right? And by not doing so dooms us to prison?
Anonymous says
“But he got the most important thing — valuations — wrong.”
How so? The video there shows he believes in periods of high and low valuations, and those affect expected returns.
Rob says
We are not normal if we don’t spend 100% of our time trying to convince people that you should be able to post what you want, where you want and when you want? Did I get that right? And by not doing so dooms us to prison?
You didn’t word it in precisely the way that I would word it. But, yes, what you say here is essentially correct.
We live in a world of flawed humans. Flawed humans make mistakes. The people who developed the Buy-and-Hold strategy made hugely important contributions. But they also made a mistake. They concluded that the market is efficient rather than that valuations affect long-term returns. The mistake was discovered 36 years ago but the Buy-and-Holders did not correct it. They were embarrassed, they were confused, they were uncertain. The mistake that they failed to promptly acknowledge was a big mistake and over the years it has caused great human misery. It threatens to cause much more human misery in the days ahead. The decision as to whether to finally face up to this mistake is the most important public policy question before us today as a nation.
You either don’t believe that there was a mistake or else that any mistake made was not that big a deal. So long as you are sincere in that belief (all evidence that I have seen indicates that you are sincere in that particular belief), you should continue to express that sincere belief. But it is certainly possible to do that while staying on the right side of the law and you certainly should endeavor to do so.
So, yes, your top priority in life today should be to set right what you have set wrong. It is of course not just Rob Bennett who should be posting honestly. You should want to see Jack Bogle post honestly and you should want to see Wade Pfau post honestly and you should want to see Robert Shiller post honestly and you should want to see Bill Bernstein post honestly and so on and so on and so on.
All of your efforts should be directed to achieving that goal until it is achieved. In part because the speed with which you achieve that goal will determine the length of your prison sentence. But also in part because you care about the millions of middle-class people who need access to honest discussions of stock investing to be able to plan their financial futures. And in part because you yourself need access to honest discussions to plan your own financial future effectively.
There are not two sides here, Anonymous. There are two models for understanding how stock investing works that proceed from different starting-point beliefs (one that the market is efficient, one that valuations affect long-term returns). But the goal of all the people who believe in the two models is identical — to invest their retirement money as effectively as possible.
That goal is achieved by permitting (and encouraging!) all on both sides to express their sincere views on every possible subject just as they believe them. We differ on the substantive matters. But we are 100 percent united (at least when we are thinking clearly) on the process issues. We all believe in the goodness of our country and of our country’s laws. Or at least we all certainly should believe in the goodness of our country and of our country’s laws.
These are my sincere thoughts re these terribly important matters, in any event.
I naturally wish you all the best that this life has to offer a person.
Rob
Rob says
How so? The video there shows he believes in periods of high and low valuations, and those affect expected returns.
What does he say about safe withdrawal rates? Does he believe that they are affected by periods of high and low valuations too? If so, why does he permit his name to be used at a site at which posting by the sorts of individuals who have put up posts in “defense” of Mel Lindauer and John Greaney are permitted?
Rob
Anonymous says
“There wouldn’t be one person saying “Rob who?” but for you Goons. If you had not engaged in criminal behavior, I would be working today with Bogle and Shiller and Bernstein and Pfau and Swedroe and lots of others to get the word out re what works to millions of middle-class investors. You should be focused on that part of the story — your prison sentence.”
Word of the day: Anosognosia.
Rob says
The other option is that we can wait until millions of middle-class people suffer a loss of 50 percent of their life savings and see how they react to that.
I have been pretty darn clear re which option I prefer.
But I don’t decide this matter by myself. I need cooperation from others to advance the ball.
So we’ll see.
Rob
Anonymous says
“There wouldn’t be one person saying “Rob who?”
So you think your name would be just as well known as Bogle and Shiller? Do you think you would have media coverage like they have?
Rob says
Certainly.
The transition from Buy-and-Hold to Valuation-Informed Indexing is the biggest advance in the history of personal finance.
It was the continued promotion of Buy-and-Hold for 27 years after Shiller published his “revolutionary” (Shiller’s word) research findings that caused the economic crisis of 2008. Millions of people lost their jobs in that economic crisis. Hundreds of thousands of businesses failed in that economic crisis. We are still suffering the effects of that economic crisis today — it was the losses suffered in that economic crisis and the failure of the elites to take effective action in response to them that brought on the political frictions that we have seen on both the left and the right in recent years.
Had Motley Fool banned Greaney when he put forward his first death threat, we would not have suffered an economic crisis in 2008. We would have suffered a recession at an earlier time — the level of overvaluation was too big when I put forward my famous post of the morning of May 13, 2002, for us to have gotten off without any sort of negative consequences. But the losses would have been less had we launched the national debate in May 2002 and the losses would have been countered by the positives that would have followed from us all learning for the first time in history how stock investing really works.
There is no story more important than this one. On the one side, we have horrible consequences to face if we do not spread the word re the message of the last 36 years of peer-reviewed research and on the other side we have our best years to look forward to if we stay true to our foundational principles and use this powerful new communications medium to spread the word quickly and effectively, as has been my intent going back to May 2002.
There’s a reason why we made financial fraud a felony, Anonymous. It’s bad stuff. It hurts us all in a big way. The other side of the story is that the good news here is 50 times more good than the bad news here is bad. Take the financial fraud out of the equation and you have an amazing story of life getting better and better and better for millions of people as a result of a huge learning experience that we all enjoy together.
I am a journalist. It is my job to bring about learning experiences. I have trained my entire life to become skilled at doing that job effectively. I am both proud and humbled to have been placed in circumstances in which I was called to lead the way to the future of investing analysis in our nation. I offer zero apologies for the important work that I have done.
I have never tried to hog the limelight. I even invited John Greaney himself to play a positive role in this. But the unfortunate reality here is that the cover-up has been going on for 36 years now. This cover-up is the biggest act of financial fraud in U.S. history. There are lots of powerful forces that very, very, very much want to keep the cover up in place. It is a journalist’s job to stand up to those forces. I have done that for 15 years now. Yes, my efforts are of equal importance to those of Bogle and Shiller, as critically important as the efforts of those two giants have been.
Bogle’s Indexing Revolution doesn’t produce good fruit without an update to Buy-and-Hold to reflect the research-proven reality that valuations affect long-term returns. Shiller’s Valuations/Emotions Revolution doesn’t provide much in the way of practical effects until we open every investing site on the internet to honest posting on safe withdrawal rates and scores of other critically important investment-related topics.
These are my sincere thoughts re these terribly important matters, in any event.
I naturally wish you all the best that this life has to offer a person.
Rob
Anonymous says
If your message was that powerful, goons wouldn’t be able to suppress it. You don’t even know if Greaney is still posting, anything, anywhere on the web. You just use him as an excuse for your utter failure. Like all cranks, it’s always someone else’s fault.
When did facts stop mattering to you? Or did they ever matter?
Rob says
The message was powerful enough to be awarded a Nobel prize. That’s as powerful as it gets.
People do not expect to see their loves ones threatened and their careers destroyed because they elect to post honestly re the last 36 years of peer-reviewed research. We enacted the laws against financial fraud because we know that we need those laws. We made a terrible mistake as a society when we first failed to enforce those laws. You Goons would today be 100 percent happy to permit honest posting at every site on the internet if you could agree to do that in exchange for a Get Out of Jail Free card. Unfortunately, there are no Get Out of Jail Free Cards. Once we permitted criminal behavior, we put ourselves in circumstances where the criminal behavior had to be intensified just to keep the cover-up of the earlier criminal behavior covered up.
The facts matter to me. There is no valuation adjustment in the retirement study posted at John Greaney’s web site. Thousands of people have looked at his study and not one has ever been able to identify a valuations adjustments. I am beginning to develop a funny feeling that that might be because there really is none there — just as I reported in my famous post of the morning of May 13, 2002. I have refused for 15 years now to lie about this well-established fact and I will continue for 15 billion years to refuse to lie about this well-established fact if I am around that long.
And I naturally wish all my Goon friends all the best that this life has to offer.
Rob
Anonymous says
If anyone else had typed that response, you would say that person is completely unhinged. But because YOU wrote it, it makes perfect sense. Cranks are cranks. You’re not a crank. You display every single classic characteristic of being a crank. But still, you’re not a crank. Why? Just because.
Rob says
Okay, Anonymous.
I do wish you all good things, in any event.
Rob
Anonymous says
In short, we goons have kept you from being wealthy and famous and we should be spending all our time to help you out, in return for shorter prison sentences. Did I state that correctly?
Rob says
The laws against financial fraud were not written to protect me personally, Anonymous. They were written to protect the people of the United States.
The people who use our boards and blogs to learn about stock investing are working under an entirely reasonable presumption that the published rules of the sites are administered in a reasonable way. That’s not the reality. Discussions of the pre-1981 research that appeared for a time to support Buy-and-Hold are permitted. But discussions of the “revolutionary” (Shiller’s word) post-1981 research is not permitted. The reason why it is not permitted is that you Goons were so insanely abusive in your behavior that the site owners ultimately agreed to ban honest posting to get your abusive behavior to stop.
I have every right in the world to post honestly at every board and blog on the internet. I didn’t get any numbers wrong in any retirement studies . That was the other fellow. Once you Goons crossed the line into felony fraud, you obviously put yourself into circumstances in which you will be going to prison in the days following the next price crash. I didn’t do that to you. You did that to you. And all the people who tolerated your behavior because of their fear of you made your situations worse. I didn’t tolerate your bad behavior. I called you out on it. Many, many times. There are Post Archives.
It’s true that I will become wealthy and famous once we open every site on the internet to honest posting. I will be the one who overcame you Goons and opened up access to honest discussions of what works in stock investing to millions of middle-class people. Is there any reason why I shouldn’t become wealthy and famous for doing that? If there is, I sure cannot think of it.
I love my country. So I followed its laws. Our nation’s laws are good laws. So I did a good thing. If you have a problem with that, the problem is with you. I am going to move forward in the days ahead. And the people of the United States are going to move forward in the days ahead.
I am going to put forward some words aimed at getting your prison sentence reduced a bit because I think of you Goons as friends. But that’s as far as it goes for me. I am never going to say that I believe that Greaney included a valuations adjustment in the retirement study posted at his site. I don’t believe that he did. I am not going to cross the felony line. Not in 15 years. Not in 15 million years.
I want your prison sentence to be as short as possible. So,yes, I would like to see you do anything in your power to help us all out. But I obviously understand that I possess no power to control what you do. I urge you to do what it would take to get a shorter prison sentence. But I wish you the best of luck with whatever choices you make.
It will be interesting to see how it all plays out in the days following the next crash.
I wish you all the best that this life has to offer a person. I hope that helps a small bit.
Rob
Anonymous says
“What does he say about safe withdrawal rates? Does he believe that they are affected by periods of high and low valuations too? If so, why does he permit his name to be used at a site at which posting by the sorts of individuals who have put up posts in “defense” of Mel Lindauer and John Greaney are permitted?”
You said very specifically he got “valuations” wrong. Nothing about SWRs. How did he get valuations wrong?
Rob says
If he doesn’t believe that valuations affect safe withdrawal rates, then he got valuations wrong.
If he does believe that valuations affect safe withdrawal rates, then he should not permit his name to be used at a board that permits posting by the sorts of individuals who have put up posts in “defense” of Mel Lindauer and John Greaney.
Rob