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 what you are doing is not working, perhaps you should try a different path.
I am not capable of posting dishonestly re the numbers that my friends are using to plan their retirements, Anonymous. It’s just not in me.
For good or for ill, I think it would be fair to say that I am stuck for life on the path that I walked onto on the morning of May 13, 2002.
Please don’t think that I am complaining. I believe that the opportunities that have become available to me by walking this path are enormous, just breath-taking. I believe that I have opportunities that I will be cashing in on in days to come that will make me one of the richest people in the world. I obviously don’t want to appear to be whining about that.
My point is that I would be stuck on this path even if I knew with certainty that it would never put a dollar in my wallet. I cannot post dishonestly re this stuff. When I was planning my early retirement, I worked it hard. I wanted to get the numbers right. That was very important to me. So it is just impossible for me to imagine how I could ever deliberately post dishonestly re the numbers being used by others. I could make mistakes. We all are capable of making mistakes. Even that scares me. But the thought of DELIBERATELY putting forward retirement-planning numbers that I know with certainty are wrong just doesn’t compute for me. It is not even possible for me to imagine circumstances where that could ever change.
I once told a friend of mine that I would die for Valuation-Informed Indexing if it came to that. He laughed. He said “That’s the kind of investing strategy that I need to learn more about — the kind that the guy who came up with it is willing to die for.” I thought that was funny. I got the joke. And I don’t mean to be morbid by talking about dying. I certainly don’t believe that I am going to have to die over this stuff. The point is just that there is no circumstance in which I could ever post dishonestly re safe withdrawal rates. If it came to it, I would prefer death to doing that. So obviously I am going to accept any other penalty that is imposed on me for my unwillingness to engage in fraud re these matters.
Say that you got hit by a car and were stuck in a wheelchair for the rest of your life. That would be very bad news, right? That’s not something that you are expecting to see happen and it would be a major setback. But life would still be worth living, right? There are people who can only get around in wheelchairs who live very rich lives. They are not happy to be in wheelchairs but they are thrilled to be alive and they make the most of it.
That’s how I look at the situation that I am in. It is my sincere belief that I will be making millions on the other side of the Big Black Mountain. I am just waiting for the first person to come up to me and exclaim “You are so lucky to have been the person to discover this!” I am going to punch that person in the nose, you know? I swear. But I do believe that, when people look back at these days, they will be thinking how lucky I was to get there first and to have so few competitors and all that sort of thing. What good fortune!
But if it doesn’t happen that way, at least I gave it my best shot. At least I never sold out my fellow community members. If I never earn a dime, you could compare that to me being trapped in a wheel-chair for the rest of my life. It’s not something that I want to see happen. But I would still be thrilled to be alive even if I never earned another dime, you know? Worse things have happened to people in this big old goofy world of ours. If people have lived through worse and maintained their good cheer, it seems to me that I should be able to do the same with this smaller bit of bad fortune. And of course if I receive that $500 million settlement check, all the better, right? If I can hold up to never earning another dime, I can surely hold up to having to figure out how to invest $500 million without it causing me to go into too high a tax bracket.
If you come up with any ideas that put me on a different path and that don’t require me to cross to the wrong side of the felony line, please let me know. I am very much in the market for those sorts of ideas! But nothing on the wrong side of the felony line gets two seconds consideration from this boy. That’s just not the way that I am wired, Anonymous. I am a non-felony-committing fool any way you look at it. I am not offering any apologies. I am happy that I am a non-felony-committing fool. I like it that I am that, $500 million settlement payment or no $500 million settlement payment. But that is certainly what I am in any event. I have certainly never sensed even the slightest inclination in me to reverse myself on that particular call.
I hope that helps a small bit. I love all my FinCon friends and I 100 percent believe that we will all be able to form tighter bonds in the days following the next price crash, when all the resistance to talking over the far-reaching implications of the last 36 years of peer-reviewed research will melt away into nothingness. But we are just going to have to wait a bit to see how things play out following the crash to know for absolutely certain.
My best and warmest wishes to you, my long-time Buy-and-Hold friend.
Rob
Anonymous says
“But we are just going to have to wait a bit to see how things play out following the crash to know for absolutely certain.”
We already know how it is going to play out. We have plenty of history to look at. The market will go up and down, to various degrees. Everyone will have varied opinions the cases of the rises and falls (just as you have your opinion and I have mine), yet we know that the market tends to go up in the long run if we ignore the noise. You will likely repeat your same lines for the rest of your time on the internet, and those few that remain (if they decide to sit around and watch), will continue to offer up the same responses. Nothing will change for you or anyone else if it is solely dependent on postings like this. If you want change, it is up to you as an individual. You have to get a job, start a business that creates value, increase savings, etc. Alternatively, if you keep doing what you are doing, you will likely get the same results.
Anonymous says
“And of course if I receive that $500 million settlement check, all the better, right? If I can hold up to never earning another dime, I can surely hold up to having to figure out how to invest $500 million without it causing me to go into too high a tax bracket.”
This is the same mentality as the typical lottery player that convinces himself that all will be great once he wins the lottery…………yet we all know what the odds are of this happening. In your case, the odds are even worse.
Anonymous says
“And of course if I receive that $500 million settlement check, all the better, right? If I can hold up to never earning anothe”
Sound like a get rich quick scheme.
Rob says
Sound like a get rich quick scheme.
We disagree.
I started developing the skills to become a journalist when I was in High School. So the work that I am doing today is the product of 45 years of effort. That ain’t no Get Rich Quick scheme.
And the peer-reviewed research that is the foundation stone for Valuation-Informed Indexing has been around since 1981. As a nation we have been working this for a long time.
And Shiller’s “revolutionary” 1981 research findings themselves capped off many years of effort in which humankind was putting together the pieces of a model that truly explains how stock investing works. We have been building toward the breakthroughs that we have recently achieved for as long as people have been trying to understand stock investing better.
And the principles behind the laws that protect those of us who insist on our right to post honestly have been around since the inception of our nation. We have always been open to new ideas because it is developing new ideas that we achieve the growth that enhances the standard of living of millions.
There’s no Get Rich Quick scheme here. This is the future. This is how those seeking to invest for the long term go about doing so.
Rob
Rob says
This is the same mentality as the typical lottery player that convinces himself that all will be great once he wins the lottery…………yet we all know what the odds are of this happening. In your case, the odds are even worse.
We disagree.
Shiller’s research shows how stock investing has been working since the beginning of time. You have all your chips in on a bet that stocks will from today forward perform in a way in which they never have performed before. That’s the longest of all long-odds bets. You are the one counting on a lottery ticket to pay off. I am counting on peer-reviewed research to prove to be legitimate. There’s no such thing as a 100 percent sure bet. But the odds favor the strategy rooted in the peer-reviewed research.
The desperation you evidence in committing criminal acts reveals your lack of confidence in your position. I have never once done anything abusive. I never will. I don’t feel that I need to. Because I have the confidence that advocating a strategy rooted in peer-reviewed research offers.
Rob
Rob says
We already know how it is going to play out. We have plenty of history to look at. The market will go up and down, to various degrees. Everyone will have varied opinions the cases of the rises and falls (just as you have your opinion and I have mine), yet we know that the market tends to go up in the long run if we ignore the noise. You will likely repeat your same lines for the rest of your time on the internet, and those few that remain (if they decide to sit around and watch), will continue to offer up the same responses. Nothing will change for you or anyone else if it is solely dependent on postings like this. If you want change, it is up to you as an individual. You have to get a job, start a business that creates value, increase savings, etc. Alternatively, if you keep doing what you are doing, you will likely get the same results.
We disagree.
It all comes down to whether that word “noise” that you use is appropriate or not.
If the market is efficient, valuation levels really are noise. If that’s so, Buy-and-Hold is the ideal strategy. If that’s so, stock investing risk is a constant and the safe withdrawal rate is always the same number.
If valuations affect long-term returns, the valuation level that applies at a particular point in time is the price tag for stocks. If that’s so, Buy-and-Hold is the purest Get Rich Quick scheme ever concocted by the human mind. If that’s so, stock investing risk is variable and investors MUST adjust their stock allocations in response to big valuation shifts to have any hope of keeping their risk profiles roughly constant over time. If that’s so, the safe withdrawal rate is a number that can drop as low as 1.6 percent and can rise as high as 9.0 percent, depending on valuations.
It all comes down to whether valuations affect long-term returns or not. I believe that the last 36 years of peer-reviewed research in this field is legitimate research.
We’ll have to wait and see how it all plays out in the days following the next price crash.
Rob
Anonymous says
“We’ll have to wait and see how it all plays out in the days following the next price crash.”
Read the first post again. We already know how it will play out.
Rob says
The vast majority of investors obviously believe that things are going to play out in the way that you are saying, Anonymous. We know that because prices are so high. Prices couldn’t get that high if most investors were exercising price discipline.
So, if we take a vote, you are going to win the vote. We essentially have already taken a vote. The P/E10 level is the product of a vote by the community of investors on what they think of the idea of investing rationally. Today’s P/E10 level is 30. We are as a people not too keen on the idea of investing rationally at this particular point in time.
Peer-reviewed research is a search for truth. It is not determined by vote-taking. The truth is not always popular. But it is constant. That’s the cool thing about truth. The truth has staying power.
The world changed in 1981, when Shiller published his “revolutionary” Nobel-prize-winning research. Those who care to now know the truth about stock investing. I believe that it is the most important public policy issue of our time that we get the message re the truth about stock investing out to every investor on the planet as quickly as is humanly possible. I believe we are going to do it (not anywhere near as quickly as I would like, but eventually, perhaps just in the nick of time).
I am shocked and amazed and surprised and saddened that we didn’t get to work on that important piece of business on the morning of May 13, 2002, when I put forward my famous post pointing out that there is no valuations adjustment in the retirement study posted at John Greaney’s web site. But I sure don’t see the issue as being any less important today than I saw it as being on the morning of May 13, 2002. What I have seen over the past 15 years tells me that it is a far more important project than I believed it to be on the morning of May 13, 2002. I still believe that we should be telling our friends the truth about how stock investing works. I will solider on.
I think it is going to play out just fine for all of us. As John Walter Russell once put it: “I believe that it is going to turn out better than any of us can now imagine.” I believe that even those of us who land in prison cells following the crash may in time come to see how their prison sentences were part of a process that had to play out for us all to protect the country we love from the economic crises that bring on the political frictions that hurt all of us. So we’ll see, you know?
I don’t believe that you are 100 percent confident that things will play out without a prison sentence for you. I believe that, if you were confident, you wouldn’t post here. Every post that you put forward just convinces me all the more than I am right in my beliefs about how things are going to play out.
What I believe determines my behavior. So that part is settled.
What determines your fate is how millions of middle-class investors react to losing 50 percent of their life savings in the next crash. We are all going to have to be a bit patient and then watch together to see how that one goes. No, we don’t know with certainty today. You SAY you know. But if you were confident in what you say, you wouldn’t even post here. Your actions tell a different tale than your words.
My best wishes to you.
Rob
Anonymous says
“What I believe determines my behavior.” Yes, that’s the problem.
“What determines your fate is how millions of middle-class investors react to losing 50 percent of their life savings in the next crash.”
Why is it only 50% now? What happened to the 65% crash that you predicted continuously from 2010-2016? What happened to your assurances that PE10 would drop into the single digits and stay there for years? That would require over a 70% crash. Are you mellowing? Are your calculators, which are based on 36 years of research, spitting out different numbers now? Next year will you warning us about a 40% crash, and a $300 million payday?
Rob says
Yes, that’s the problem.
How is it a problem that what I believe determines my behavior? Isn’t that the natural thing? Isn’t your behavior influenced by what you believe?
What happened to the 65% crash
65 percent is the accurate number. Emotion causes overvaluation. When prices return to reasonable levels, we don’t just see the irrational exuberance disappear. We see it replaced by an irrational depression that takes prices to well BELOW fair-value levels. I just sometimes use the 50 percent number because it is more conservative.
What happened to your assurances that PE10 would drop into the single digits and stay there for years?
I don’t actually think that that is what will happen this time. This goes to your “we already know what will happen” claim. The publication of Shiller’s “revolutionary” (his word) Nobel-prize-winning research changes everything. At the end of every earlier bull/bear cycle, the P/E10 level did indeed drop into single digits and stay there for years. But we didn’t have Shiller’s research available to us at those times! Now that we have it, there is no need for us to punish ourselves in that way. My guess is that we will indeed drop to P/E10 levels in single digits for a time. But my hope and expectation is that we will then act as a society to open every discussion board and blog to honest posting on the last 36 years of peer-reviewed research and that step will bring about enough rationality to pull the P/E10 level back to 15, where it belongs.
Are you mellowing?
Heaven forbid! What fun would there be in that?
Are your calculators, which are based on 36 years of research, spitting out different numbers now?
The calculators spit out the same numbers. But please understand that the calculators report a range of possible outcomes. We can as a people push things in the direction of more positive outcomes through our behavior. That’s why I argue so forcefully that we need to open every site to honest posting. It is though honest posting that we all learn what we need to do to obtain the best possible outcomes available to us.
All of the work that I do is aimed at obtaining the best possible outcome for every single person involved, including you Goons. That’s why I solider on, Anonymous. I want you to enjoy a better future than you will be able to live if we do not open every discussion board and blog to honest posting by the close of business today. And of course I want that for millions of others (including Old Farmer Hocus!) as well.
Take care, man.
Rob
Anonymous says
“I just sometimes use the 50 percent number because it is more conservative.”
“I don’t actually think that that is what will happen this time.”
Countless times, without exception or being “more conservative”, you said 65% crash, with PE10 in single digits for years. Now you are wavering. Next you’ll be telling us goons they we’ll be spending days and days in the county jail.
Anonymous says
“The desperation you evidence in committing criminal acts reveals your lack of confidence in your position”
And you would be wrong. Your desperation has you repeating the same lies over and over again. After all, you are the one with the failed retirement.
Rob says
Countless times, without exception or being “more conservative”, you said 65% crash, with PE10 in single digits for years. Now you are wavering. Next you’ll be telling us goons they we’ll be spending days and days in the county jail.
I’m not wavering. But I obviously don’t want to say anything that might upset anyone. I am at heart a true puppy dog poster, just like that fellow said.
Rob
Rob says
And you would be wrong. Your desperation has you repeating the same lies over and over again. After all, you are the one with the failed retirement.
Yeah, yeah.
Rob the Puppy Dog Poster
Anonymous says
If you can’t use real numbers even here, in your own safe space, you’re no better than all those liars who gloss over the truth just to maintain their popularity.
2018 prediction for Rob Bennett: Same as the last 16 years.
Rob says
Okay, Anonymous.
I do wish you all good things, in any event.
Rob